Life Insurance Corporation of India (LIC), the nation’s largest life insurer, continues to dominate the insurance ecosystem with remarkable consistency. With a commanding market share of 63.44% in policies and 59.41% in premiums as of the first half of FY26, LIC stands as a cornerstone of India’s financial services sector. Its Assets Under Management (AUM) reached an extraordinary INR 57.23 lakh crore, underscoring its unrivaled scale and influence.
AUM Capital projects the LIC target price to INR 1,266, implying an upside potential of nearly 40.35% from the market price of INR 902 (as of 21 November 2025). The brokerage lauded the company’s strategic pivot toward high-margin non-participating products, operational efficiency, and strong financial performance in H1FY26.
LIC H1 FY26: Financial Strength and Operational Excellence
LIC’s financial performance for the six months ended 30 September 2025 was marked by robust growth and profitability.
- Operating income stood at INR 2,46,548 crore, up 5.11% YoY, while operating profit rose 19.76% YoY to INR 21,798.52 crore.
- Consolidated net profit surged 15.23% YoY to INR 21,055.53 crore, reflecting strong underwriting discipline and investment returns.
- The solvency ratio improved to 2.13, indicating a healthy capital position and the insurer’s capacity to meet long-term obligations.
- Gross NPA ratio declined to 1.34% from 1.72% a year earlier, highlighting a steady improvement in asset quality.
- The persistency ratio—a measure of customer retention—rose to 63.81% (premium basis), signaling growing policyholder trust.
AUM Capital also noted that the company’s Value of New Business (VNB) increased 12.30% YoY to INR 5,111 crore, with margins expanding 140 bps to 17.6%, driven by a strategic focus on cost optimization and a higher share of non-par products.
Strategic Transformation: The Non-Par Push
A defining feature of the company’s transformation has been its focus on non-participating (non-par) policies—products that deliver higher profitability and margin expansion. The non-par segment’s share of its Individual Annual Premium Equivalent (APE) rose sharply to 36.31% in LIC H1 FY26, up from 26.31% in H1 FY25.
This strategic shift, according to AUM Capital, has been the cornerstone of the company’s profitability improvement. The non-par APE grew 30.47% YoY, reflecting strong customer uptake of new product offerings like Jeevan Kiran, Jeevan Utsav, and LIC Yuva Term. The company aims to eventually achieve a balanced 40-60 mix between non-par and participating products.
Distribution Diversification and Digital Drive
While LIC’s agency network of 14.85 lakh agents remains its backbone, the company is making rapid strides in expanding its bancassurance and alternate channels. The share of these channels in new business premium has grown to 7.87% in H1FY26, from 4.67% a year ago, with new partnerships forged with RBL Bank, IDFC FIRST Bank, J&K Bank, and Saraswat Urban Cooperative Bank.
The integration of technology is another key pillar of the company’s transformation. Initiatives such as the ANANDA (Atma Nirbhar Agent) app, DIVE (Digital Innovation & Value Enhancement), and Jeevan Samarth projects aim to enhance agent productivity and provide a seamless, omnichannel experience for customers.
Financial Health and Shareholding Structure
As of FY25, the company maintained a market capitalization of INR 5.71 lakh crore and a book value of INR 224.40 per share, translating to a P/BV ratio of 4.02. The promoter shareholding—comprising the Government of India—stood at 96.50%, with institutions and retail investors holding 1.48% and 2.02%, respectively.
On the balance sheet, the company’s reserves rose 47.89% YoY to INR 1,34,730 crore, and total policyholder funds exceeded INR 47.5 lakh crore, underscoring its immense financial capacity. The insurer also proposed a dividend of INR 12 per share for FY25.
Investment Strategy and Outlook
AUM Capital highlighted the company’s conservative yet efficient investment philosophy, emphasizing safety, stability, and long-term returns. Nearly 75% of policyholder funds remain invested in government securities, ensuring stability while balancing exposure to equities and infrastructure assets for higher yields.
The company’s prudent asset allocation, coupled with improving profitability, places it in a strong position to capitalize on India’s rising insurance penetration, evolving consumer preferences, and expanding middle class.
LIC Target Price: AUM Capital’s Verdict
In its comprehensive report, AUM Capital underscored that the company remains the undisputed leader in India’s life insurance sector, with “robust growth prospects, a diversified product suite, expanding distribution footprint, and improving efficiency metrics.” The brokerage reaffirmed its BUY recommendation with a 12-month LIC target price of INR 1,266, projecting ~40% upside potential from current levels.
The note concluded,
“LIC’s strategic realignment toward high-margin non-par products, strong agency productivity, and bancassurance expansion continue to drive sustainable value creation. We believe LIC’s growth trajectory remains firmly intact.”
Conclusion
LIC H1 FY26 performance underscores a legacy institution that is evolving with the times—modernizing its product portfolio, digitizing its distribution network, and sharpening its profitability levers. With its dominant market position and the backing of a conservative yet growth-oriented investment strategy, LIC stands poised for a strong rerating in the coming year.
AUM Capital’s bullish stance, backed by detailed financial metrics and strategic clarity, reflects a growing consensus: India’s largest insurer is entering a phase of profitable growth, and investors may well find significant long-term value in LIC’s continued evolution.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription, stay tuned to IPO Central.