LIC’s first-half results show how an insurer can generate more expected value from new business without selling more individual policies.
The company reported ₹6,846 crore in value of new business, or VNB, for the six months ended September 30, 2026, up 33.95% from a year earlier. Its net VNB margin increased to 22.3% from 17.6%. Over the same period, the number of individual policies sold fell 2.25% to about 70.97 lakh.
The figures measure different parts of the business. Together, they make the composition and expected profitability of new policies central to reading the result.
What lifted the margin
LIC’s investor presentation breaks the 4.7-percentage-point margin increase into three contributions. Business mix added 3.3 percentage points and changes in assumptions added 2.8 points. Expenses reduced the margin by 1.4 points.
That breakdown matters because VNB estimates the present value of future earnings from policies written during the period. Its margin expresses that value relative to annualised premium equivalent, or APE. It is a measure of expected new-business profitability rather than the profit already earned during the half-year.
The assumptions contribution should therefore remain visible alongside the sales mix. LIC’s bridge identifies its size but does not, on that slide, separate the underlying assumption changes.
Retail growth depends on the measure
Individual new-business premium income increased 14.86% to ₹32,725 crore. Individual APE, however, rose just 0.31% to ₹17,224 crore.
APE standardises different payment structures by combining annualised first-year regular premiums with 10% of single premiums. Consequently, premium income and APE cannot be read as interchangeable measures of growth. Their different rates alone do not establish how much each product or payment pattern contributed.
Group business provided more of the expansion in total APE. Group APE increased 13.55% to ₹13,472 crore, helping overall APE rise 5.72%.
The individual product numbers were uneven. APE from unit-linked insurance plans fell 40.07% to ₹1,880 crore. Within the individual non-participating category, savings APE grew 35.02%, protection grew 58.59% and annuity APE grew 5.33%. Those increases did not fully offset the ULIP decline: total individual non-participating APE fell 5.98%.
Keeping policies in force remains part of the test
Persistency adds another dimension. On a premium basis, LIC’s 13th-month persistency ratio declined to 74.69% from 75.29%; its 61st-month ratio fell to 61.03% from 63.81%.
The policy-count measure gave a different near-term signal: 13th-month persistency improved to 67.58% from 63.36%. Stating the basis is essential when describing whether retention improved.
For readers following India’s insurance market, the next useful comparison is whether stronger new-business profitability is accompanied by broader individual sales and sustained renewals. LIC’s latest half-year already shows improved expected value from new business. Policy counts, premiums and retention need to be assessed separately.
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