NEW DELHI: Life Insurance Corporation of India (LIC) expects limited impact from the insurance regulator’s upcoming distribution reforms due to its strong agency-led distribution model, according to MD & CEO R Doraiswamy.
“We expect that the overall interest of the industry, particularly the individual agents, who are dependent on insurance sales, is being taken care of while the regulator is going to come up with distribution sector reforms,” Doraiswamy said during the company’s first-quarter earnings press briefing.
He added that LIC expects only a limited impact because of the significant contribution from its agency channel. “Our overall commission expenses itself is not is not high in comparison with the rest of the industry. So, we are hopeful that there will not be much of an impact,” he said.
The Insurance Regulatory and Development Authority of India (Irdai) is expected to release a consultation paper later this month proposing sweeping changes to the way insurance products are distributed, sold and serviced. The proposal is likely to introduce an effort-based commission model for different categories of insurance intermediaries, including agents, brokers, banks, online platforms and other distribution partners.
LIC had 14 lakh agents in force as of June 2026, accounting for 44% of the life insurance industry’s agency force. The agency channel contributes around 90% of LIC’s business.
Doraiswamy said channel diversification remains one of the company’s key priorities. Bancassurance, alternate channels and digital together contributed 8.2% of LIC’s business in the previous financial year, and the company aims to increase this to 15% over the next one to two years.
“Bancassurance is one of our priority areas on improving. We expect it to be close to 10% in the immediate future and trying to take it much higher in the next few years,” he said.
On the proposed stake dilution in IDBI Bank, LIC’s largest bancassurance partner, Doraiswamy said it would have no impact on the insurer’s distribution as LIC currently has tie-ups with more than 90 banks. On further stake reduction by the government, Doraiswamy said Sebi had granted LIC a special dispensation allowing the government until May 2027—five years from the IPO—to meet the minimum public shareholding requirement of 25%
The government on Wednesday concluded its Offer for Sale (OFS) in LIC, divesting a 6.5% stake and raising ₹31,552 crore in what it described as India’s largest public offering. Following the OFS, the government’s stake in LIC stands at 90%.
Doraiswamy ruled out any immediate stake dilution to meet the 75% minimum public shareholding requirement. “I don’t expect the government to come up with any new offer in the immediate future. I think DIPAM secretary also clarified that they may not come up with any fresh issue in the next at least 18 to 24 months,” he said.
Doraiswamy attributed the limited free float as one of the reasons for the stock’s continued underperformance since IPO. “So we did two things. One, we came up with the 1:1 bonus. So, that has increased the number of shares available in the market. Two, government has come up with the OFS. Now, 10% is available outside the government,” he said, adding that he expects the market to recognise the improved float and the share price to respond positively in the near term.
Source: Business Standard
