India’s largest life insurer, Life Insurance Corporation of India (LIC), is expected to report flat Annualised Premium Equivalent (APE) for Q1FY26, while Value of New Business (VNB) margin may expand on a YoY basis due to a greater share of high-margin non-par policies. However, sequential performance is expected to be weak.
As Life Insurance Corporation of India (LIC) prepares to report its Q1FY26 earnings on August 7, expectations indicate a mixed performance driven by a subdued top-line and improved margin metrics. Market participants will closely evaluate APE trends, VNB margins, and management commentary on growth strategies and acquisitions, particularly in the health insurance space.
APE Likely to Remain Flat YoY, Sharp Decline QoQ
According to analysts, LIC’s Annualised Premium Equivalent (APE) is expected to remain flat year-on-year in Q1FY26. Preliminary business data from April and May 2025 supports this view, showing limited momentum in new premium inflows. On a sequential basis, however, APE is projected to contract by approximately 38.1%, reflecting a seasonally weak quarter and normalization post-year-end highs.
VNB Growth YoY, Margin to Expand Despite QoQ Dip
Value of New Business (VNB), a key profitability metric, is expected to increase by 8.3% YoY. However, on a quarter-over-quarter basis, VNB may drop by over 50%, in line with the expected premium slowdown. The silver lining lies in margin expansion.
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LIC’s VNB margin is forecasted to rise by 100 basis points (bps) YoY to 14.9%, largely due to an increased contribution from high-margin non-participating (non-par) policies. Non-par products, known for delivering better profitability, are gradually reshaping LIC’s product portfolio.
Focus on Product Mix and Non-Par Dominance
The emphasis on non-par policies is expected to benefit overall margins. The full impact of newly launched non-par offerings in H1FY25 will likely support LIC’s product diversification strategy. Analysts estimate that non-par business will continue gaining share in the coming quarters, reflecting a strategic pivot towards sustainable margin improvement.
| Metric | Q1FY25 (YoY) | Q1FY26E | QoQ Change |
| APE Growth | Flat | 1% | -38.1% |
| VNB Growth | – | 8.3% | -50.7% |
| VNB Margin | 13.9% | 14.9% | -3.82% QoQ |
Accounting Impact & Outlook
LIC’s accounting practices based on actual cost recognition may also influence the quarterly margin volatility. Additionally, investor focus will remain on management’s outlook, particularly on the acquisition strategy in the health insurance space and efforts to digitize distribution channels.
Despite a weak sequential quarter, LIC’s consistent shift toward high-margin segments signals structural improvement in its profitability profile. The insurer’s scale, brand strength, and evolving product mix position it well for medium-term growth, especially as non-par products take center stage.
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