Life Insurance Corporation of India (NSE: LICI) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Unidentified Speaker
R Doraiswamy — Chief Executive Officer and Managing Director
Govind Agarwal — Executive Director, Marketing, Product Development
Sunil Agrawal — Chief Financial Officer
Ajay Kumar Srivastava — Appointed Actuary & Executive Director (Actuarial)
Analysts:
Unidentified Participant
Madhukar — Analyst
Sucrit Patil — Analyst
Gaurav Jain — Analyst
Dipanjan Ghosh — Analyst
Aishwarya Mittal — Analyst
Nischint Chawathe — Analyst
Shobhit Sharma — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the LIC’s nine month FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
We have with us the Senior Management of LIC led by Mr. R. Doraswamy, CEO and MD. On this call I now hand the conference over to Mr. R. Doraswamy. Thank you. And over to you sir.
R Doraiswamy — Chief Executive Officer and Managing Director
Thank you. Good evening everyone. I am Doraiswamy, Chief Executive Officer and Managing Director lic. I would like to welcome all of you to the results and performance update call for the nine month period ended 31st December 2025. Our results declared today have been uploaded along with press release and the investor presentation on our website as well as the websites of both the exchanges BSE and nse.
Along with me on this call I have three Managing Directors Sri Dinesh Panth, Sri Ratnakar Patnaik and Sri Aur Chandar, Senior Officials of the Corporation. Present in this call are Sri AK Srivastava, Appointed Actuarial and Executive Director Actuarial from the Actuarial team, Sri Sunil Agarwal, CFO from The finance team, Mr.
Arindam Das Gupta, Executive Director, Investment Front Office and Chief Investment Officer from the Investment team. From the Marketing team we have Sri G.P. agarwal, Executive Director, Marketing Product Development Sri Heman Buch, Executive Director, Marketing Bank Assurance and Alternate channels Sesha Giridhar, Executive Director, Pension and Group Schemes. Also we have Ms. Sobha Solochana, executive Director, CRM Policy Servicing and Grievance International Officer Ms. Bandana Sinha, Executive Director, CRM Claims and Mr. Sanjay Bajaj, Head Investor Relations. On this call let me now mention the key business operational and financial highlights for the nine months ended December 31st, 2025.
Our market share by first year premium income for nine months ending December 31st, 2025 is 57.07% as per IRDI as compared to 57.42% for a similar period ended December 31st, 2024. We continue to maintain our leadership in the Indian life insurance market across both individual and group business segments. Now if you bifurcate this overall market share of 57.07% into segment wise share of individual and group business we would have a market share of 35.84% in individual business and 71.36% in the group business for the period of nine months ending December 31, 2025. On a comparable basis for the nine months ending December 31, 2024, the respective market share for individual and group business were 37.21% and 71.70% respectively.
Premium Income for the nine months ended December 31, 2025, we have reported a total premium income of 3.71,293 crore rupees as compared to a total premium income of 3, 3.40,563 crore rupees for the nine month period ending December 31, 2024, registering a growth of 9.02% on a year. On year basis, the individual new business Premium income for nine months ended December 31, 2025 was 44,941 crore rupees as compared to 42,441 crore rupees for a similar period of last year, thereby registering an increase of 5.89% on a year. On year basis, renewal premium income of Individual business for nine months ended December 31, 2025 was 1.91,050 crore rupees as compared to 1.78,975 crore rupees for the period ended 31st December 2024, registering a growth of 6.75% on year.
On year basis, therefore, for the nine months ended December 31, 2025, our total individual premium income including renewals was at 2.35,991 crore rupees as compared to 2.21,416 crore rupees for the nine months ended December 31st, 2024, registering a growth of 6Point58% on year. On year basis, the group business total Premium income for nine months ended December 31, 2025 was 1.35,302 crore rupees comprising new business premium of 1.32,611 crore rupees. In comparison, for nine months ended 31st December 2024 last year the group business total premium income was 1 19,147 crore rupees comprised new business premium of 1.15,576 crore rupees.
Therefore, for the nine months ending December 31, the total group premium has increased by 13.56% as compared to similar period of previous year. Breakup of Business On APE basis, the total annualized Premium equivalent for nine months ended December 31, 2025 is 44,007 crore rupees which comprise individual APE of 27,552 crore rupees and group APE of 16,455 crore rupees. Therefore, on APE basis the individual business accounts for 62.61% and the group business accounts for 37.39%. Further, of the individual APE, the PAR business accounts for 17,507 crore rupees and non PAR amounts to 10,045 crore rupees. Therefore, our non PAR share of individual APES 66.46% and PAR is 63.54% for the nine months period ended December 31, 2025.
As you may recall, for the nine months ended December 31, 2024, our nonPAR share of total individual business based on ape stood at 27.68%. Since then our non par ape has increased from 6,813 crore rupees to 10,045 crore rupees reflecting an increase of 47.44% on year on year basis we are consolidating our rapid gains in non per share of individual APE. Sequentially, we are consolidating this year at approximately 36% plus levels. The profit after tax for the nine months ended December 31, 2025 was 33,998 crore rupees as compared to 29,138 crore rupees for the nine months ended December 31st, 2024, registering a growth of 16.68% on year on year basis.
The net VNB has registered a growth of 27.96% on year on year basis to 8,288 crore rupees for the nine months ended December 31, 2025 from 6,477 crore rupees for the 9 months ended December 31, 2024. Further, the net VNB margin has improved by 170 basis points on a year on year basis to 18.8% for the 9 months ended December 31st, 2025 from 17.1% for the period ended December 31, 2024. Our solvency ratio as on December 31, 2025 improved to 2.19 as against 2.02 on December 31, 2024. Assets under management as on December 31, 2025 was 59.16,680 crore rupees as compared to 54.77,651 crore rupees as on December 31, 2024.
Therefore, our AUM has registered a growth of 8.01% on year on year basis the product mix and new product launches as on 12-31-2025 we had a comprehensive suite of 59 products excluding Pradhan Mantri, Jeevan, Jyoti, Bima Yojana available for new business including 39 individual products, 12 group products, seven individual riders and one group rider. Here I would like to add that Currently we have 57 products since in January 2026 one new product has been launched namely Alic’s Jeevan Utsav single premium and three products have been withdrawn namely LIC’s new endowment plus LIC’s Bima Ratna and LIC’s JeevanAzad.
Hence we are dynamically managing our product portfolio. Therefore, as of date we offer a total of 57 products which comprise 37 individual products, 12 group products, seven individual riders and one group rider excluding the Pradhan Mantri, Jeevan, Jyoti Bimayojana. During the nine months ended December 31st, 2025 we sold 1 crore 1663,856 new policies as compared to 1 crore 17 lakhs 10,505 new policies in the nine month period ended December 31st, 2024. As on December 31st, 2025, the total number of agents was 1472,370 as compared to 1419,480 as on December 31st, 2024. The market share by number of agents as of December 31st, 2025 stands at 45.32% as against 47.40% for the December 31st, 2024.
On number of policies sold basis, the agency foresold 1 crore 1434,396 policies during the nine months ended December 31st, 2025 as compared to 1,13,056,466 policies during the corresponding period last year. Further, 98.20% of our policies in the nine months ended December 31, 2025 were sold by our agency force when seen on premium basis, 91.72% of new business premium came from our agency channel in the first nine months of the current financial year. There is a significant upward trend in the new business premium income from our bank assurance and alternate channels. Bank assurance and alternate channels collected a new business premium income of 3,341.37 crore rupees for the nine months ended December 31, 2025 as compared to 2,003.95 crore rupees for the 9 months ended December 31, 2024.
Registering a growth of 66.74% on a year. On year basis, the new business premium income collected through banks was 2035.62 crore rupees for the nine months ended December 31, 2025 and for the corresponding period of last year it was 1,451.64 crore rupees thereby registering a growth of 40.23% on year on year basis. Further, the alternate channels collected new business premium of 1305.75 crores crore for the nine months ended December 31, 2025 as compared to 552.31 crore rupees for the nine months ended December 31st, 2024 registering a growth of 136.42% on year. On year basis, our bank assurance and alternate channel account for 7.45% of the individual new business premium for the nine months ended December 31, 2025, which is significantly higher than the 4.73% for nine months ended December 31, 2024.
For the nine months ended December 31, 2022, the overall expense ratio was 11.65% compared to 12.97% for the same period of last year. Therefore, there is a decrease of 132 basis points in our overall expense ratio on year on year basis. Persistency on premium basis, the persistency for 13th, 25th, 37th, 49th and 61st month up to the nine months ended December 31st, 2025 stands at 75.75%, 70.76%, 67.37%, 63.77% and 61.09% respectively as compared to 76.66%, 71.67%, 67.10%, 63.39% and 61.84% respectively up to the period of nine months ended December 31st, 2024. On number of policies basis, the persistency for 13th,25th,37th, 49th and 60 first month up to nine months ended December 31st, 2022 stands at 64.28%, 58.92%, sorry, 59.82%, 55.70%, 50.63% and 49.06% respectively as compared to 66.47%, 60.10%, 53.84%, 51.17% and 49.22% respectively up to the nine months ended December 31st, 2024.
While acknowledging that certain cohorts have not shown any significant improvement we assure you that we are taking multiple steps to achieve better persistency ratios, operational efficiency and digital process in our Digital initiative through the Agent Assisted Ananda application We have completed 1453,124 policies during the nine months period ended December 30, 2025 as compared to 9.72,504 policies for the nine months ended 12-31-2024 thereby reaching a growth of 49.42% on year. On year basis there is a growth of 41.5 in the number of agents who are active in Ananda app. For the period ended 12-31-2025, the Digital Innovation Value Enhancement project which is being rolled out in phases both for the distributors and customers.
Many features and facilities have been activated and many more will be launched this calendar year. I am sure that all of you will experience a much more digital savvy interface in how LIC connects with you on the individual claims front. During the nine months ended 12-31-2025 we have processed 1 crore 54 lakhs 11,320 number of claims which includes 1 crore 47 lakh 99,971 maturity and survival benefit claims on an amount basis. During the first nine months in the December 31st, 2025 the total maturity claims were 1.68,613 crore rupees and the total death claims were 18,156 crore rupees.
On a comparable basis for the nine months of 2024 to the ended 31st December 2024 the maturity claims were 1.47,739 crore rupees and death claims were 17,588 crore rupees. Therefore the maturity claims are higher by 14.13% and the death claims are higher by 3.23% on a year on year basis. The Marketing Initiative Update on Bima Saki Yojana as of 12-31-2025, a total of 2.97 lakh women have been designated as Bima Sakes, successfully selling 14.3 lakh insurance policies and generating a new business premium income of 1873 crore rupees in nine month period ended 12-31-2025. Our objective is to appoint at least one Vimasakhi in every Gram Panchayat and we would like to inform that out of 2,44,876 gram panchayats we have covered 52% gram panchayats by recruiting Bima Saqis in 1,27,417 gram panchayat up to December 31, 2025.
Before concluding, I would like to reiterate significant highlights of our performance. During the first nine months of FY2025 26. Our non par share of individual AP business has further grown to 36.46% or the nine months period of FY26 as compared to 27.68% for the same period of the previous year. The profit after tax has grown by 16.68% to 33,998 crore rupees on a year on year basis. Bank assurance and alternate channels registered a growth of 66.74% on a year on year basis to 3341.37 crore rupees. VNB has increased by 27.96% on a year on year basis.
For the first nine months of FY26, VNB margin has increased by 170 basis points to 18.8%. For the nine month period of FY26, AUM has increased to 59.17 lakh crore reducing a growth of 8.01% on a year on year basis. While maintaining growth in multiple parameters, we have kept a focus on costs and as you can see the overall expense ratio is down by 132 basis points to 11.65% in the nine month period of FY26. Now I would like to conclude by saying that LIC is well on its way to deliver all our commitments whether on product mix, channel mix, profitability, cost effectiveness and newer products.
We are doing all this while ensuring that we continue to maintain our image of trust and credibility in the minds of the buyers of life insurance in India. We think that ongoing use of digital marketing and a mobile first approach will help achieve the national aim of insurance for all by 2047. We are thankful to all our stakeholders in their faith in our strategy and its rollout. I now hand over the call to the moderator to start the question and answer session. Thank you very much.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press Star and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from. The first question is from Alka jr who is an individual investor. Please go ahead.
Unidentified Participant
Does the company currently have any plans to or ongoing Discussions regarding acquisition or. Entry into health insurance segment.
R Doraiswamy
We are a strategic investor and we are a major investor in many companies and sectors. We have been evaluating, we have been looking at opportunities for enhancing our investment opportunities and as a part of it, we are looking for enhancing our stake in a health insurance company. We are evaluating various options available in the market, but we don’t have any particular deadline or any such immediate date by which we are looking at doing that. We will be open to having a stake if a very good opportunity makes itself viable. Thank you.
operator
Thank you. The next question is from Madhukar, from JP Morgan. Please go ahead.
Madhukar
Sorry. Hi. Thank you for taking my question. So you know when I look at your VNB walk, there is there’s a pretty significant change between 9m and first half of FY26, the VNB Walk that you’ve explained of that. So the economic assumptions have sort of significantly improved from the first half. And so can you explain that? And I’m guessing this impact of operating assumption is mainly related to the GST related issue. So can you help sort of simplify both the numbers? What is, what are the economic assumptions which are resulting in such a sharp increase in the margin? Also when we look at the product mix, there is a very big jump in nonpar but nonpar savings products.
So can you sort of give some sort of indication of what the underlying margins are in nonpar savings for you and also for the group segment? Yeah, earlier you used to give gross sort of VND margins but you stopped disclosing that. So that would be helpful.
R Doraiswamy
I would like my appointed actually to explain.
Ajay Kumar Srivastava
So good evening. I am Ajay Kumar Shivastav, appointed Actuary and Executive Director Actuarial. Your first question is about the yield curve. Why that economic assumptions and the results have gone up. So the favorable Yield curve of Q3. Of around 83 basis points or 80 basis points, particularly of at higher durations, that has impacted and contributed to an increase of 1.9%. So it’s because of the higher favorable yield curve. And your second question was that you know the operating impact on the BNB margin. So that has impacted 2.8% but this includes the GST impact, the impact of persistency and alignment of expenses in group business to reflect the current experience. All these things put together have actually contributed to this decrease in VNB margin by 2.8%. As regards the business mix. As regards business mix, the business mix, if you look at in entirety, it has increased from 18% to 23%.
If we consider the entire business including group. And the impact of this is, you know, the 48% contribution to the VNB margin which indicates, you know, the contribution of non par business and the increase of it on the VNB margin and the group. You asked the impact of that. So for the group marginally the proportion has gone up from 35 to 37% and 37% of this proportion contributes to about 24% of the BNB margin. So I think this while we have given the consolidated numbers on BNB margin for the corporation as a whole, this proportion of the business and the contribution to the VNB margin may give you a good indication of why the VNB margin has increased from increased from 17.1% to 18.8% y on y basis.
Madhukar
Got it. So and just a follow up question, do you hedge, do you run a hedge non par product portfolio or is it just that this quarter you did not revise the IRRs upwards which has sort of resulted in a higher margin in nonpar?
Ajay Kumar Srivastava
Yeah, I’m just responding to it. I’m the CRO here to speak. We are very active in the interested. Derivative space currently and we are regularly doing software forwarded agreements at regular interval and we try to hedge our position to the maximum.
Madhukar
Got it? Got it sir. Congratulations on a very good set of numbers and all the best.
R Doraiswamy
Thank you very much.
operator
Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Sukrit Patil from Eyesight Fin Trade Private Limited. Please go ahead.
Sucrit Patil
Good evening to the team. My first question to Mr. Doray Swami is as LIC moves through this stage, how do you balance between growing the business, keeping operations efficient and protecting the profits? And when the situation changes like competition, cost or customer trends, what helps you decide which of these should be the main focus? That’s my first question. I’ll ask my second question after this. Thank you.
R Doraiswamy
Thank you. The focus is on managing a continuous, sustained, profitable growth. Our focus will be to continue continuously to improve the new business performance and top line growth so that the impact of expenses that happen like the input tax credit of GST or whatever it is gets subsumed into the overall efficiency of the corporation. On the expenses part, yes. We are continuously focusing on the rationalization by of course partly because our senior working team is also facing a lot of retirements and we are replacing them by younger people by recruiting at various levels.
So we are able to attain a cost rationalization in this also as well as the Other expenses by going digital. By saving our operational expenses at various levels. So there is a continuous activity of improving our operational efficiency at the ground level. While also focusing on increasing the contribution from the various channels. We are also focusing on improving the contribution of banker share on alternate channels which in our case also comes up with a bit more cost efficiency as well as we are also looking at enhancing our digital footprint. So all these will continue to be focused.
And we like to take on the competition or whatever it is based on our continued focus on keeping our agency productivity increased as well as contribution for other channels by improving the top line growth and continuously working on the rationalized extension.
Sucrit Patil
My second question to Mr. Agarwal is again along the similar lines. When early signs such as receivables, investment flows or costs begin to change what. Guides your response towards this? How do you decide the next step. So that you stay ahead of pressure. Or capture the upside before it shows. Up on the balance sheet. I want to understand how you approach this particular thing. Thank you. It all depends on the cash flows that are available from time to time.
Sunil Agrawal
And depending on our ALM position. Because we know the maturities and the outgoings that are planned and more or less the expense trend is also known in advance. So accordingly we plan our investment strategy and deploy the funds in the market.
Sucrit Patil
Thank you and best of luck.
R Doraiswamy
Thank you.
operator
Thank you. Next question is from Gaurav Jain from ICICI Prudential Mutual Fund. Please go ahead.
Gaurav Jain
First of all, congratulatGAions.
Unidentified Speaker
Gaurav. I’m sorry to interrupt but we can barely hear you. Could you please speak a little louder?
Gaurav Jain
Any better now?
R Doraiswamy
Okay, go ahead. I’m able to hear you.
Gaurav Jain
Yeah, yeah, yeah. Thank you sir. So first of all sir, congratulations on a great set of numbers. Sir, if we can see that for the nine months we have reported a PAT growth of 17% which is now at 34,000 crore around. And sir, in spite of reporting such strong growth our solvency is sir, continuously improving. So quarter on quarter it has also improved. And now we are at 219 solvency which should be comfortable. Again sir, my question is on dividend payout that what we are seeing is the payout ratio is on the lower side. So if you can help us understand how is the board and corporation really thinking on dividend payout that will be very helpful. Sir.
R Doraiswamy
Thank you for your question. Actually this is a call that board will have to take from time to time. And if you see for the last three years we have been improving or increasing our dividend paid we started at four rupees, then we moved to ten and then we have moved to twelve. We are expecting it to be better in the current year also. But it’s not a call that I can take individually. So when we declare the results of the full financial year, we may be our board will be taking a call so that our growth in the dividend payout is also sustainable.
As of now we have built up quite a good amount of reserves. So we can, we are comfortable in that area. So after the final results are declared, perhaps we’ll be able to take a call.
Gaurav Jain
That was very helpful and all the best, sir.
R Doraiswamy
Thank you very much.
Gaurav Jain
Thank you.
R Doraiswamy
Thank you sir.
operator
Thank you. Participants who wish to ask Questions may press star and 1. The next question is from Deepanjan Ghosh from City. Please go ahead.
Dipanjan Ghosh
Hi, good evening sir. Just few questions from my side. First if I look at the ticket size of your nonpar savings business and par business there seems to be a little bit of trajectory change compared to what we were seeing for the past few quarters in both the segments. So just wanted to get some color on the sub products within this segment and has there been any shift, you know, across the quarter out there? My second question is on the banker and alternate channel. Would it be possible for you to kind of segregate it between core bank assurance and other channels and also the sort of product mix across some of these channels? How are you seeing that evolving? And the third question is taking cues from the previous participants question in terms of your dividend payout policy.
You know, I just wanted to understand, you know, now you’re sitting with almost a net worth of 1.5 trillion plus. Your solvency is also quite comfortable. It seems that you might have done some rounds of exercise on IFRS calculations also. So is there some visibility on let’s say even two, three years out, what can be a steady state dividend payout ratio for a company of your vintage? Those are my three questions.
R Doraiswamy
The GP Agarwal on the ticket size of.
Govind Agarwal
Yeah, our ticket size of Indian Lowe’s is improving because of this annuity plants we are having a growth similarly in.
Unidentified Speaker
If we look at on the basis of individual then in that case you will find that because you know that that takes care of the mode of payments. So therefore average individual ape. If you look at as compared to December 2024 it has gone up from 28,034 to 31,882 in case of single one single premium and in case of non single it has gone up from 20,542 to 23,050. So it has increased significantly. And with this interventions which we had done last time last year while reviewing the products based after this product regulations had come up, you would be aware that in some products not on all we had increased the minimum sum assured. So we expect that going forward we’ll be having a higher ticket size. On the basis of APE going forward.
Sunil Agrawal
Coming to Banka per se, we I think it’s CEO sir detailed it out during his address that both Bangka core as well as the alternate they have been in fact contributing significantly in terms of overall volumes. Banks continue to grow at almost around 40% for period ending 31st of December. And alternate of course we have been showing a healthier growth of around 136% in terms of comparative data over corresponding period of last year. And putting it in numbers, banks contributed around 2,035 crores as at December 25, while 1305 crores came from alternates. We look forward to continue with the same set of healthy numbers and quite confident of maintaining the same growth rates for the year as well.
So hopefully we should be closing Q4 also on a strong note and as far as the product mix within Benka is concerned, in fact the bank continues to lead in terms of nonpart contribution and currently in fact Benka has almost around 90 to 10% 90% to 10% kind of weightage between non power.
Unidentified Speaker
As regards your last question on dividend, if you look back at the dividend history, we started off with one and a half rupee per share and we’ve increased it eight times over a period of last three, four years. And as sir already mentioned we will be sustaining so we are ensuring that the dividend is sustainable in coming days.
And also as you rightly pointed out, there are a variety of things happening on the IFRS front as well. So we are yet to complete the assessment because many things are at the draft stage as of now. So as and when they are notified and they are enforced. So we look at the impact and thereafter come back with a concrete dividend policy. But as far as the sustainability is concerned we will ensure that it is sustainable, whatever dividend policy.
Dipanjan Ghosh
Got it. So just one small follow up question. I mean in terms of the government shareholding in lic, obviously there are some stipulated timelines. Any color that you can share on this aspect. That’s all from my side. Thank you. And all the best.
R Doraiswamy
See on that the government are the the regulatory portion now is that the holding of the government will be reduced by 15%. That is it will come down to 90% within a period of five years of the rate of IPO which is by 2027. We should be able to come down to that and the government and LIC together we are working towards making it happen. Maybe you’ll be hearing about the further transfer of shares being offered in the next few months to come.
Dipanjan Ghosh
Got it sir. Thank you and all the best.
operator
Thank you. Participants who wish to ask questions, please press Star in one. The next question is from Aishwarya Mittal from Prayash Finbridge. Please go ahead.
Aishwarya Mittal
Good evening sir. My question about the performance of the company being an investor, my concern is that from the last four years here I’m carry the negative carry from your listed price. So when I can just look at the. The positivity, see dividend is all this is fine. But when the I carry the capital depreciation negative carry then why should I keep your, you know, share in my portfolio? And the second thing now the page number 7 and 11 of your presentation slides, there is a lot of negativity. There is a market share is lost.
Your bank insurance policy is reduced by 44%. So why this 4 and 5 negative is there in the, you know, particular performance? Because you are losing your market share. Versa in other companies. Thank you.
R Doraiswamy
See, we are looking at all the steps that are being that we can be taking to ensure that price will see an uptick at the earliest. We are working on that continuously. We should be. We are hoping that this will be happening at the nearest possible time. On the other side. Yes, the market share that I lost when the market as a number of players expand the market share of the biggest player is likely to be reduced. Because any new player coming in and taking up even a small volume of business means it will be.
The overall pie will grow but the share will get split. We are looking at continuously growing on a sustainable basis. That is what we are looking at. So we will be looking at a growth rate commensurate with the industry or in such a way that we propel the growth of the industry as a whole. That’s what we are looking at. So when the number of players keep increasing now with the new latest Insurance act of 100% FDI there may be more players entering the market. As more and more players enter, the market gets divided among the share among the participants.
So market share loss by itself is not a major issue. But what we are looking at is growth. And that too at a sustainable level is something that we are looking at. On the bank assurance side, I don’t know whether you are looking at the number of policies, right? Yes, we had a good contribution from a major alternate channel partner with us who has been facing some issue with their operation in the area where they are focusing. So they could not repeat. They did a good volume of number of policies last year, but they are all of a small ticket size.
On the individual side, they were having some problem during the current year. I think they are overcoming that problem and soon they will be coming back to their earlier form of activity and I am sure we will be recapturing on that. Though there had been a fall in the contribution on number of policies by the bank assurance, the alternate channel partner, we have been able to show a substantial increase in the premium side from the bank assurance as well as alternate channel bankers have shown a growth of more than 40% whereas the alternate channels have shown a growth of more than 126%.
In terms of premium, our focus has been on garnering more premium through this channel and improving that share. And if you have noticed, over a corresponding period of year to year basis, we have almost increased from 4.7% to 7.23% as a share from bank assurance. And that focus will continue to be there. We’ll be improving the contribution from this channel as the days to come.
Aishwarya Mittal
Thank you, sir.
operator
Thank you. The next question is from Nishin Chavate from Kotak Securities. Please go ahead.
Nischint Chawathe
Hi, just going back the first question, which is the impact of operating assumptions. You mentioned that this 2.8% includes persistency expenses and GST. Is it possible for you to give us some color in terms of how this breaks up?
Unidentified Speaker
In fact, if we. Go through the. Calculations, all these factors which I spoke about, that is persistency, expenses, GST as part of expenses, they all interact and there are various other, you know, the factors which get into the determination of the VNB margin. So therefore what we have shown is the overall impact of that. Because of that interaction and all those things, these numbers keep on changing within those parameters which I had mentioned. So that’s the reason we have shown it together as 2 and 2.8.
Nischint Chawathe
You know, GST is a, is a, you know, so to say, one off event which can probably be, you know, neutralized over time. And you know, hence if we kind of set that aside, we were just curious to understand as to how the ongoing business is moving. So if you could give any color on that, that would be useful.
R Doraiswamy
Gst. I. I Don’t know whether you can take it as a one off event because as of now it stands by the council. So you can take IT as around 40% or the 2.8% or whatever it is. Maybe it will be through the GSE ITC not being available. But as we go forward we are looking at getting it subsumed by the nationalization of expenses. So we are, that’s why we are not splitting it. We are trying to do two things. One, thanks to the increase in affordability by the customer not having been required to pay gst, we are seeing an uptick in both the ticket size as well as the number of the amount that we are looking at.
So we are looking at a top line growth while maintaining a recognition of expenses. So overall expenses gets reduced so that the impact of GST can be suitably accommodated within that.
Nischint Chawathe
And why would you have higher than estimated expenses? Because I thought on the expenses line we should be positive given the volume tailwind that we have seen.
R Doraiswamy
Oh yes, that’s what we are looking at. Reduction in the overall expenses ratio as well as the management expenses have been going down.
Unidentified Speaker
So if you’re talking about the quarter. On quarter comparison, as you rightly observed that it’s a one time GST impact. That was accounted for in quarter four. The quarter three, therefore comparatively it is higher as compared to your previous quarter.
Nischint Chawathe
No, no, sorry. What I was trying to say is that see GST, see if I look at the -2.8% clearly, you know, you mentioned GST was sort of 40% contributor to it. And then I would believe the balance 60 is, you know, negative on persistency and negative on expenses. I understand the persistency part but why would you have a negative, why would you carry a negative operating variance on expenses when your volume growth is so strong?
Unidentified Speaker
The mention was not in all lines of business. As you know, the overall expenses as has been discussed has come down. But in some lines of business, you know, depending upon the experience that has been factored in. So the impact of those lines of business where it has been set to the current experience, the impact is only not on the entire business.
Nischint Chawathe
Okay. Okay, got it. Thank you.
operator
Thank you. Before we take the next question, a reminder to participants that you may press Star and one to join the question queue. The next question is from Shobhit Sharma from HDFC Securities. Please go ahead.
Shobhit Sharma
Yeah. Hi sir. Thanks for the opportunity. Sir, my first question is on the growth side. So if I look at power business during the quarter it seems we have grown significantly higher than what we have done in the first six months. So if you can shed some light on that, have you made any product intervention or is this because of the base effect we had? Secondly, on the persistency, like it has dropped across most of the cohorts. So if you can shed some light on which product segments we are experiencing lower than the company average persistency levels. And is there anything to read it from the monthly mode of ULIP persistencies. So these are two mic. These are two questions from my side.
Unidentified Speaker
Our experience on persistency is that the low ticket size of policies have poorer persistency and you know, the low, the frequency of payment, if it is higher, that is also having an adverse impact on the persistency. Now some of these things we have addressed in the last year, as I said, that minimum ticket size has gone up and the impact of that is expected, you know, when we start looking at the 13th month persistency which is yet to unfold. So for the time being we are. Talking about the persistency which is coming down is pertaining to those businesses which were done prior to the intervention which we made last year. So once we get this, you know, unfolding of the impact of the interventions we had taken last year, we would be able to see the impact of that increase in the persistency.
Shobhit Sharma
Okay. And what about the growth on the parabenicide which we had seen during the quarter?
Unidentified Speaker
So the power business also. As we mentioned slightly, this VMB margin also has gone up on that particularly because on an APE basis, if you look at the average ticket size in par business has gone up. So that average ticket size going up is again a result of what I mentioned due to the intervention of some of the the products where the minimum ticket size were increased. So going forward, once the ticket size increases, I mean that will be having impact on, on, you know, the margins in, in the power business as well.
Shobhit Sharma
Yes, please continue.
R Doraiswamy
I would also like to add that the geographical spread and the segment wide spread that LIC has compared to other insurance companies in terms of business also adds to the persistency issues. People who are not from the affluent sections of the society, they take a policy, but perhaps they may not be able to pay on time, but as and when their seasonal income improves, they come back and pay their arrears and bring the policies in force. So we continuously work on reviving the existing policies which for which premiums are not paid in time, which would have affected our persistency by getting them back as a revival or reinstatement.
That also helps. So we address the lack of persistency, particularly in terms of 13 month and earlier months by going on a campaign mode in terms of revival of LAB policies. Also, that’s also contributing to our improvement in profitability over a period of time.
Shobhit Sharma
So is it right to assume that we are experiencing a negative persistency variance as compared to what we have actually built in?
Unidentified Speaker
Persistency and other, you know, the experience items continuously get reviewed, you know, periodically. And it is not one such factor which gets into, you know, for the purpose of the VNB margins, etc. But whole lots of things, you know, so persistency is one such thing. So when the persistency goes down, if that gets factored in, that will be having impact on the margins as well.
Unidentified Speaker
One point we can note here is that, yes, as it is a point in which this assumption changes negative, the persistency has gone down. But we need to appreciate one thing that LIC as an organization is not exactly same to the other organizations. We have a role to play for ensuring insurance for all. So in that context, it is a very important decision. See, LIC can take a decision to improve the ticket size significantly. Naturally it will lead to higher persistency. But then affordability of insurance and being responsible for ensuring that everybody is covered is also very paramount.
Because the customer base is something which is USP for lic, even when persistency is an issue. But the large base of the insurance, you know, coverage that is being produced by being done by the corporation, a lot of steps have been taken in this context, if you would recall that, you know, many products have been withdrawn, many products have been modified. But as has been mentioned by Mr. Shivato just now, that it is a very key area of focus for us and the steps that they were taken because we see last year we revised the ticket size of the policies from minimum 1 lakh to 2 lakh.
And that had an impact that the business volumes in terms of policies went down significantly. So now we have to ensure that coverage also continues. So now in this context, the steps that were taken last year, because the manner of determination of persistence is that you observe it for one year and then there is a method in which it is done that will unfold in the next year. So and what you are talking about, persistency in terms of, you know, 63, 64% or 65% or so, is in terms of policies, in terms of premium, actually our persistence is much better, 75% or so.
So we are confident that as this. And another important factor which needs to be noted is that the ticket size between participants participating, not participating is significantly different. While the average around 20,000. So the ticket size for the non participating is larger. So the persistence in that segment is there. And another important point in context of LIC which has to be noted is that LAC has a big book size of single premium policies which actually does not come into the regulatory method of calculation of 13 month persistency because fully paid up policy and single premium policies are not a part of that calculation.
So if a realistic assessment is done including based on inclusion of single premium policies also in paid up policies, LHS persistency will look much better and higher as compared to that thing. So what is being seen persistently, currently being seen is in context of the methodology which is prescribed which excludes paid up and single premium policies. But as we mentioned earlier, while we remain focused and it’s a total endeavor for the corporation that we have to work towards persistency. Because yes, as you rightly mentioned, reduction in persistency impact the profitability, long term profitability. But we have to rebalance that.
We continue to provide products which are for the masses as well as which are for the classes. So that while we continue to create value for the shareholders, we also need to keep on creating, you know, options and the solutions product solutions for all classes of customers. So that is something which is very important and core to our business activity.
Shobhit Sharma
So just a small follow up on this if you can give some. If you can shed some light on the alternate channels. So what kind of product mix they are into? Are they much more heavier onto the ULIP side as compared to the power segment? And what’s the persistency on those channels? And lastly final question is on the distribution cost. So there have been a lot of concerns around the distribution cost in terms of the payouts which we are, which we. Which the companies makes to the distributors. So what do you think if the deferral of the commission gets into the picture, would it be would be a help the industry to resolve the persistency related issues and bring on the distributor payouts?
Sunil Agrawal
Alternate channel product means remains in fact more or less nonparcentric. With both in that annuity and ulips contributing healthy volumes. It is not only in fact driven by ulips. Annuities also contributed significantly in terms of contributions coming in from alternate channels including banks. And so far as the commission structure.
R Doraiswamy
Alternate channel good amount of not only alternate channel banks have also been contributing substantially on a single premium components. So their persistency at the highest we can safely take it as very big. Even for the one organization which are contributing heavily in the last year which they could not repeat this year. They were all of a very high persistency of close to around 90 to 92% is what we were experiencing. When it comes to the distribution cost, you will appreciate that LIC have been different from the rest of the industry. We have been managing and maintaining our distribution cost at a much lower level than the rest of the industry.
And whatever the talks that are being made now is in respect of the higher distribution cost that was seen in the other companies. We are currently we have been consistently maintaining and we are adhering to the regulatory restrictions which are there in 2013 and 2016, though subsequently those regulations were removed. We have been keeping it at an optimal level as and when the regulator takes a call and in case if there is a modification that is going to be prescribed, we will be fully compliant and ensuring that it happens. LIC has always been having a good amount of commission being paid or rather proportional commission that is being paid out of the total that we are spending towards the renewal premium.
And so that has been one area where we are able to do much better in terms of persistency of 61st month and thereafter which is not being measured or disclosed.
Shobhit Sharma
Thank you sir for this elaborate answer and wish you all the best.
R Doraiswamy
Thank you very much.
operator
Thank you. The next question is from Madhukar from JP Morgan. Please go ahead.
Madhukar
Hi sir, thank you for taking my follow up. So just you know, on the breakup of the operating expense assumption change. So how much of that is because of GST? Can you sort of just quantify that number and second the mark to market, you know, fluctuation for the 21st of December ending that we can get from PDs right is would that like the policyholders around that number would be the fair number right number to look at.
Unidentified Speaker
As I said, the components within that they interact with each other and at any point of time, you know that number may be, you know, the different when the mix actually differs. So therefore quantifying this specific one component, maybe a little, you know, a little information may be in a taken in a different manner. And therefore any information which is going to be different on the basis of the GST based on the mix, we have taken all the components together and have given a single number which is 2.8%. So that includes GST expense which we have been taking as you know the part of expenses and absorbed accordingly.
Madhukar
Oh, got it sir. Thank you and all the best.
operator
Thank you. Participants who wish to ask Questions may press star and 1. Ladies and gentlemen, to ask questions please press Star and one as There are no further questions. I would now like to hand the conference over to Mr. Doray Swamy for closing comments.
R Doraiswamy
First of all, I would like to thank all of you for taking the time to attend our late evening conference call today. As we conclude our review for the 9 month performance of FY26, I want to convey my appreciation to everyone for your continued confidence for collaboration and engagement with lic. Your thoughtful questions show a deep insight into our operations and strategic direction. I trust we have resolved all your concerns satisfactorily. If you require any further assistance or wish to continue the dialogue, please contact our investor relations team. Thank you and have a good night.
operator
Thank you very much on behalf of lic. That concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.