LIC chief flags pressure of global turmoil on industry
MUMBAI: Economic and geopolitical uncertainty is beginning to weigh on household savings and insurance demand, with LIC reporting pressure on long-term policy persistency and caution in premium growth even as its first-quarter profit and value of new business rose quite sharply.On Thursday, after announcement of the company’s results, LIC MD & CEO R Doraiswamy said uncertainty in the macro environment could affect policyholders’ ability to pay renewal premiums on time.For Q1FY27, the persistency ratios on number of policies basis for the 13th month and 61st month were 66.5% and 48.7%, respectively. The comparable persistency ratios for the corresponding period ended June 30th, 2025 were 64.4% and 51.1%, respectively.On premium basis, the persistency was 75.3% and 61.1%, respectively and 75.6% and 63.9%, for the comparable period last year. This indicates that the lapsation was among the low value policies.“When macro environments present uncertainty, short-term pressure can affect policyholders’ ability to pay renewal premiums on time,” Doraiswamy said.He attributed the decline in long-term persistency to seasonal economic factors and tighter household savings, adding that LIC was following up with customers to revive policies.The caution is also visible in the flow of new business. LIC’s total premium income rose 6.8% to Rs 1,27,250 crore in the first quarter, while annualised premium equivalent stood at Rs 13,692 crore. Doraiswamy said premium and APE growth reflected a “somewhat cautious environment” despite the company’s strong quarterly performance.
