Life Insurance Corporation of India reports record quarterly profits amid signs of industry stress, as rising economic and geopolitical tensions influence policyholder behaviour and market dynamics.
Life Insurance Corporation of India is seeing the strain of global economic and geopolitical uncertainty filter through to household behaviour, even as the state-backed insurer reported a sharp rise in quarterly profit and new business value. R Doraiswamy, LIC’s managing director and chief executive, said after the company announced results on Thursday that a less stable macroeconomic backdrop could make it harder for policyholders to keep up with renewal payments on time.
That warning sits alongside a broader industry picture in which insurers are navigating slower premium growth and more selective underwriting. Swiss Re has forecast that real premium growth globally will ease to 1.3% in 2026 from 3.9% in 2025, with life business expected to be more insulated than non-life lines because of higher yields. Fitch has also kept a neutral outlook for the sector, saying stronger investment returns may support life insurers even as lapses rise modestly and new business conditions weaken.
LIC’s own persistency data suggest the pressure is already visible in long-term policy renewals. For the quarter ended June 30, the insurer’s 13th-month persistency ratio, measured by number of policies, improved to 66.5% from 64.4% a year earlier, but its 61st-month persistency ratio slipped to 48.7% from 51.1%. Persistency is a key measure of how many policies remain in force, and weaker readings can point to stress on customer finances or lower loyalty over time. Aon has said geopolitical shocks and broader market volatility are forcing insurers to recalibrate quickly across several lines of business.
The underlying sales backdrop is also becoming more competitive. CareEdge Ratings said private insurers drove most of the life insurance new business premium growth in the first quarter of FY27, with annualised premium equivalent growth of 27.6% year on year, compared with 16.8% for LIC. In June, private insurers’ premiums rose 36.8% from a year earlier, while LIC’s increased only 1.2%, lifting the private sector’s market share to nearly 40%. Deloitte has separately warned that policy uncertainty can cause consumers to delay or reduce coverage, even as savings-linked products and annuities remain relatively resilient in some markets.
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