Will LIC grow in the future?


Editorial team Published on

Yes, the Life Insurance Corporation of India (LIC) is projected to experience steady growth supported by expanding profitability, a strategic pivot toward non-participating products, and massive assets under management, though overall growth is expected to remain more stable than aggressive.

Key Growth Drivers

  • Value of New Business (VNB) Surge: LIC's VNB grew significantly by 61% year-on-year to reach ₹3,136 crore, with net VNB margins expanding to 22.9% as the company shifts from traditional participating plans to more profitable non-participating and protection policies.
  • Strong Financial Performance: For FY26, LIC reported a net profit of ₹57,419 crore (up over 19% YoY) and total assets under management (AUM) exceeding ₹57.29 to ₹59.39 lakh crore.
  • Bonus Issue & Liquidity: LIC announced a 1:1 bonus share issue, increasing share accessibility and trading liquidity for retail investors.
  • Strategic Catalysts: Upcoming strategic moves—such as the planned IDBI stake reduction/sale and exploration of digital/fintech channels—provide mid-to-long-term value unlocks.
  • Macro tailwinds: India's low insurance penetration and rising household incomes continue to offer a massive structural runway for the broader insurance sector.

Growth Challenges & Risks

  • Market Share Erosion: LIC has faced a gradual decline in overall market and new business premium share against agile private insurers (such as SBI Life and HDFC Life), dropping from roughly 72% in FY17 down to around 60%–62%.
  • Conservative Profile: Analysts note that LIC functions more as a vehicle for financial stability, capital protection, and steady dividends rather than high-octane growth.