Life Insurance Corporation of India (LIC) is holding talks with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) over the need for more long-term investment instruments, as the volume of funds flowing into its annuity business puts pressure on the corporation to find matching assets.
R. Doraiswamy, LIC’s chief executive officer and managing director, confirmed the outreach in remarks reported by The Times of India on June 8, 2026. “When the annuity markets are becoming more favoured by the policyholders, and more investments flow into annuities, we need to necessarily have long-term investments matching those long-term liabilities. So we have been in touch with the regulator as well as the regulators like SEBI, as well as RBI and the requirements of LIC, particularly, are being duly communicated to them,” Doraiswamy said. At its core, the issue is one of duration. LIC’s annuity book carries liabilities running into 30, 40, and 50 years, according to The Times of India. It is this long-tailed nature of the business that is driving the corporation’s outreach to the RBI and SEBI to expand the availability of matching investment instruments.
Beyond the RBI and SEBI engagements, Doraiswamy noted that the Insurance Regulatory and Development Authority of India (IRDAI) has been working to keep pace with shifts in the market. He framed the multi-regulator coordination as a shared interest rather than a compliance exercise. “Given the fact that insurance companies generate long-term funds, they go on to meet the long-term financing requirements in terms of infrastructure needs and nation-building. The regulations are also getting aligned with the requirements. So, it is a win-win situation for both of us. We keep working together,” Doraiswamy said. The convergence of insurer demand and infrastructure financing need is not incidental. Doraiswamy himself drew the connection, noting that insurance companies, by generating long-term funds, go on to meet the long-term financing requirements of infrastructure and nation-building.
The investment strategy discussion is unfolding against a backdrop of investor attention on LIC’s profitability metrics. Doraiswamy was asked whether the corporation could push its net Value of New Business (VNB) margin past 20% in fiscal year 2027. His response stopped short of a firm commitment. “The effort that the corporation is taking is to see VNB margin, or the gross VNB, as well as performance in almost all parameters, keep improving,” he told The Times of India.
The nine-month results through December 2025 show the margin moving in that direction. Net VNB margin reached 18.8% for the period, up 170 basis points from 17.1% in the same stretch of the prior year, according to LIC’s performance update published February 5, 2026. Gross VNB came in at Rs. 8,288 crore, a 27.96% increase from Rs. 6,477 crore a year earlier. Part of that improvement stems from a product mix change. Non-participating products – which carry higher margins than participating ones – accounted for 36.46% of individual business on an annualized premium equivalent basis for the nine months ended December 2025, up from 27.68% in the comparable prior-year period. Individual non-par APE grew 47.44% year-on-year to Rs. 10,045 crore.
The financial results for the nine months ended December 2025 illustrate the sheer weight of liabilities that sits behind LIC’s regulatory push. Assets under management stood at Rs. 59,16,680 crore as of Dec. 31, 2025, an 8.01% increase from Rs. 54,77,651 crore a year prior, per the February 2026 performance update. Profit after tax for the nine-month period came to Rs. 33,998 crore, up 16.68% from Rs. 29,138 crore in the year-earlier period.
Total premium income for the period was Rs. 3,71,293 crore, a 9.02% rise year-on-year. Group business grew at a faster rate – 13.56% – compared with individual business at 6.58%. LIC held an overall market share of 57.07% by first-year premium income for the nine months ended December 2025, per IRDAI data, with a 71.36% share in group business and 35.84% in individual business. The solvency ratio as of Dec. 31, 2025, was 2.19, compared with 2.02 a year earlier – a figure that underscores the scale of the long-term obligations the corporation carries, and, in turn, the urgency of finding assets capable of matching them.
