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LIC cannot be judged the way other companies are.
Most of what LIC is worth sits in policies it has already sold, which pay out over the next few decades. That does not show up in a normal profit figure, so comparing today's price against reported earnings — the way you would for a bank or a carmaker — gives a misleading answer. It is valued on the policies in force instead.
- How it is valued: Embedded value — the correct lens for a life insurer.
- Biggest swing factor: Embedded value. Main risk: Losing share to private insurers.
01India's life insurer, still by a distance
Life Insurance Corporation of India is the country's largest life insurer by a wide margin. It was the only life insurer until private companies were allowed in from 2000, and the Government of India still owns the overwhelming majority of its shares after the 2022 IPO.
It sells mostly traditional participating policies through an agency force of more than a million agents, and manages one of the largest investment portfolios in India. Because a life insurer's profit emerges slowly over the life of each policy, the accounting profit in any one year says little about what the business is worth.
02LIC's record, in plain numbers
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2025 | 8,92,146 | 48,320 | 5.4% |
| FY2026 | 9,81,779 | 57,453 | 5.9% |
03How LIC gets valued — and why
Embedded value — the correct lens for a life insurerA life insurer is not valued on its reported profit. Most of its worth sits in policies already sold, which will pay out over decades — and writing new business actually reduces this year's reported profit while creating value that lasts. It is valued on embedded value plus the value of new business instead, which is the measure the industry itself uses.
04What decides LIC's value
Embedded value
The present value of profits from policies already written, plus net assets — the starting point for valuing any life insurer.
Value of new business
How much value each year's new policies add. LIC's margins on new business have been below private peers', and lifting them is the main lever.
Product mix
A shift towards non-participating products, where shareholders keep more of the profit, raises new-business margins.
Investment returns
LIC holds a very large equity and bond portfolio, so market moves change its embedded value directly.
05What could go wrong
- Losing share to private insurers. Private life insurers have taken market share steadily since they were allowed in.
- Government ownership. Further share sales by the government, or pressure to invest in state priorities, can weigh on the price.
- Interest-rate moves. Falling yields reduce future investment income on guaranteed products.
06What the full LIC valuation shows
Sign in free to see the complete LIC valuation
- ✓Fair value per share — from embedded value plus the value of new business
- ✓The insurer workpaper — embedded value, new-business margins and the multiple applied, step by step
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against HDFC Life, SBI Life and ICICI Prudential Life
- ✓Downloadable report — the full write-up, yours to keep
07Compare LIC with peers
The same valuation, run side by side.
LIC vs HDFC LifeBoth life insurers, one state-owned and one private.→LIC vs SBI LifeThe bank-backed private comparison on the same measures.→LIC vs ICICI Prudential LifeA third private life insurer, on a smaller book.→LIC vs HDFC BankA life insurer valued on embedded value against a bank valued on excess return — two models, one disclosure standard.→LIC vs State Bank of IndiaBoth state-controlled financial giants, on very different balance sheets.→08Questions people ask about LIC
Why is LIC's P/E so low?
Because P/E is the wrong measure for a life insurer. Writing new policies reduces reported profit in the year they are sold while creating value that shows up over decades. Embedded value captures that; one year's earnings do not.
What is embedded value?
It is the value of the profits expected from policies already on the books, plus the insurer's net assets. Analysts add the value of new business the insurer can keep writing to arrive at a fair value.
Is LIC better value than HDFC Life or SBI Life?
All three are valued on embedded value plus new business, so they compare like for like. LIC has traded at a much lower multiple of embedded value, partly because its new business earns lower margins. The comparison pages set them side by side.
What is the intrinsic value of LIC?
It is computed from the filed financial statements using the method that fits this business (embedded value), with every assumption shown alongside the result. The per-share figure and the full working are in the report.