R Doraiswamy,CEO and Managing Director
On LIC’s growth priorities for FY2027, he said the insurer would focus on expanding individual term insurance, savings, annuity and unit-linked insurance products (ULIPs), alongside strengthening its health-related offerings.
Mumbai: Life Insurance Corporation of India (LIC) expects a limited impact from the Insurance Regulatory and Development Authority of India’s (IRDAI) proposed commission caps and distribution reforms, as the insurer already operates within several of the proposed limits, CEO and Managing Director R Doraiswamy told ANI in an exclusive interview.
He indicated that insurers with higher distribution expenses could face greater pressure once the regulations are finalised, while LIC may need to modify or refile certain products to comply with the revised framework.
“Coming particularly to LIC, LIC has not been spending too much on distribution and has been having its own internal caps on commission as well as other distribution costs,” Doraiswamy said.
He added, “Whatever is being proposed by the regulator as part of the consultation paper, LIC is more or less compliant in many areas, except for some product lines and some premium-paying terms under regular premium plans.”
Explaining the proposed reforms, Doraiswamy said the regulator aims to reduce distribution expenses, which have increased substantially following the removal of commission caps and the shift towards overall expenses of management regulations.
“Any step that goes towards improving the economics of life insurance for the betterment of the customer is going to help the industry grow,” he said.
Doraiswamy confirmed that LIC has submitted its feedback to the regulator and expressed confidence that the concerns of insurers and distribution partners would be considered before the regulations are finalised.
He emphasised the importance of protecting the long-term interests of LIC’s agents, describing them as the insurer’s partners in progress.
“Only in case, because of the changed regulations, we need to withdraw the products or refile the products or modify the products, there can be an immediate impact of that,” he said.
However, he maintained that the overall impact on LIC would be much lower than on insurers with higher distribution expenses.
“But that will have the least impact on LIC. We are well within many of the limits that the regulator is talking about,” he added.
Speaking about LIC’s financial performance, Doraiswamy attributed the expansion in its Value of New Business (VNB) margin to 22.3 per cent to an improved product mix, higher ticket sizes in non-participating products and increased focus on protection and savings.
“We have been continuously working on improving the various factors that go into the VNB margin. The first and foremost is the product mix. We have been making very good progress towards having an ideal product mix, which is around a one-third, two-thirds proportion in terms of non-par and par,” he said.
“We have also been increasing the ticket size in the non-par segment, and our focus on non-par savings and protection in the last few quarters has been giving us good results,” Doraiswamy added.
On LIC’s growth priorities for FY2027, he said the insurer would focus on expanding individual term insurance, savings, annuity and unit-linked insurance products (ULIPs), alongside strengthening its health-related offerings.
He highlighted the launch of LIC’s Health Shield, New Cancer Cover and Jeevan Raksha, a pure term insurance product aimed at addressing the protection needs of the missing middle.
“We will be getting a good volume of business through ULIPs also, now that the markets are looking up. So all-round growth is what we are looking for in the current fiscal,” he said.
On increasing competition from private life insurers, Doraiswamy said LIC would strengthen its distribution network, improve agent productivity and expand its product portfolio to maintain its market leadership.
He said LIC aims to establish a Bima Sakhi presence in every panchayat across the country, with the initiative already covering approximately 66 per cent of panchayats.
“We are looking at having one Bima Sakhi in every panchayat, and we have so far achieved coverage in some 66% of the panchayats in the country,” he said.
Addressing equity market volatility, Doraiswamy said LIC remains a long-term investor, focusing on companies offering sustainable value creation opportunities while managing investments in line with policyholder liabilities.
“We look at sectors, we look at companies that provide us with long-term value creation opportunities, and we invest in dips,” he said.
He added that LIC also realises gains when markets rise to ensure timely disbursement of policyholder benefits.
On the broader insurance industry, Doraiswamy said India’s relatively low insurance penetration compared with developed markets presents significant growth opportunities.
“Our penetration levels are low compared to developed markets. So we have very high potential for increasing insurance penetration and increasing volumes in the market,” he said.
Reiterating LIC’s commitment to the Insurance for All by 2047 mission, Doraiswamy said the insurer would focus on underserved rural and semi-urban areas while expanding its reach across all sections of society.
“We will be focusing on urban as well as rural areas, the entire country and all segments of society for inclusive growth,” he said, expressing confidence that LIC would be a major contributor to achieving universal insurance coverage by 2047.