LIC to step up focus on non-par savings, protection products

Mumbai: Life Insurance Corporation of India is stepping up its focus on non-participating savings and protection products to sustain profitability gains, as weak equity market sentiment weighs on unit-linked insurance plan (ULIP) sales and individual business growth remains muted.

The insurer has seen a sharp improvement in product-level margins, with share of non-par growing to 13% in the first half of FY27 from 10.7% a year earlier. Margins on non-participating savings products, which offer guaranteed, pre-determined payouts, increased to 9.9% from 7.7% during this period.

These gains helped LIC expand its overall value of new business (VNB) margin by 470 basis points to 22.3% in the first half from 17.6% a year earlier.


The insurer is looking to sustain momentum in non-par savings and protection products over the next two quarters, while also increasing its focus on annuity products. ULIPs will remain part of its strategy, but sales have been affected by weak market sentiment.

"Market situation is not very conducive as sales of ULIPs take a beating," said R Doraiswamy, chief executive and managing director of LIC. While logic might say this is a good time to invest in stocks, "normally the market sentiment goes against it," he added.

The improvement in non-par savings margins was supported by 35% growth in the segment, while the protection business recorded a healthy increase, management said.