How to Read LIC's Annual Report and Balance Sheet
LIC's FY 2025-26 accounts, line by line, read the way IC-26 teaches.
LIC publishes its annual report on its website every year. The latest is the 69th Annual Report, for FY 2025-26 (the year ended 31 March 2026). It runs to several hundred pages, but the accounts inside it follow the same layout every Indian life insurer uses, so an IC-26 candidate already knows how to read it.
Two things set LIC apart. It is a statutory corporation, so its accounts are prepared under the Life Insurance Corporation Act, 1956 as well as the Insurance Act, 1938 and IRDAI's regulations. And it is very large: the figures below are in crore (₹1 crore = ₹10 million), and many run into lakh crore.
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What Is Inside the Accounts
The auditors' report lists the standalone financial statements. They are the same four any life insurer prepares.
Revenue Account
Also called
Policyholders' Account, or Technical Account
What to look at
Premium, investment income, commission, expenses, benefits paid, and the surplus
Profit and Loss Account
Also called
Shareholders' Account, or Non-Technical Account
What to look at
The transfer from the policyholders' side and the profit after tax
Balance Sheet
Also called
No other name
What to look at
Shareholders' funds, policyholders' funds (mostly policy liabilities) and the investments behind them
Receipts and Payments Account
Also called
Cash flow statement
What to look at
Actual cash in and out, prepared by the direct method
| Statement | Also called | What to look at |
|---|---|---|
| Revenue Account | Policyholders' Account, or Technical Account | Premium, investment income, commission, expenses, benefits paid, and the surplus |
| Profit and Loss Account | Shareholders' Account, or Non-Technical Account | The transfer from the policyholders' side and the profit after tax |
| Balance Sheet | No other name | Shareholders' funds, policyholders' funds (mostly policy liabilities) and the investments behind them |
| Receipts and Payments Account | Cash flow statement | Actual cash in and out, prepared by the direct method |
Which Accounting Rules It Uses
The FY 2025-26 standalone statements are prepared under the LIC Act, the Insurance Act, the IRDA Act, the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, and the Accounting Standards under section 133 of the Companies Act, 2013, as applicable. That is Indian GAAP for insurers, not Ind AS.
IRDAI made Ind AS mandatory for insurers from 1 April 2026, with up to a year's forbearance for an insurer that asked for it. LIC's Directors' Report says LIC applied for that forbearance and IRDAI granted it, and that LIC had already submitted Ind AS proforma statements for FY 2023-24 and FY 2024-25. LIC also prepares consolidated statements covering its subsidiaries and associates, under AS 21 and AS 23.
Revenue Account: FY 2025-26 at a Glance
From the Management Discussion and Analysis in the FY 2025-26 report. ₹ crore.
Total premium (net of reinsurance)
FY 2025-26
5,35,984
FY 2024-25
4,88,148
of which participating (Par)
FY 2025-26
2,83,477
FY 2024-25
2,78,194
of which non-participating (Non-Par)
FY 2025-26
2,29,534
FY 2024-25
1,94,083
of which unit-linked
FY 2025-26
22,972
FY 2024-25
15,870
Pension and group schemes (P&GS) premium
FY 2025-26
1,96,963
FY 2024-25
1,69,449
Reinsurance ceded
FY 2025-26
764
FY 2024-25
701
Net investment income
FY 2025-26
4,31,708
FY 2024-25
3,92,623
Total income
FY 2025-26
9,72,914
FY 2024-25
8,84,076
Total commission
FY 2025-26
24,440
FY 2024-25
25,309
Operating expenses related to insurance business
FY 2025-26
39,510
FY 2024-25
35,415
Total benefits paid
FY 2025-26
4,96,104
FY 2024-25
4,16,355
| Line | FY 2025-26 | FY 2024-25 |
|---|---|---|
| Total premium (net of reinsurance) | 5,35,984 | 4,88,148 |
| of which participating (Par) | 2,83,477 | 2,78,194 |
| of which non-participating (Non-Par) | 2,29,534 | 1,94,083 |
| of which unit-linked | 22,972 | 15,870 |
| Pension and group schemes (P&GS) premium | 1,96,963 | 1,69,449 |
| Reinsurance ceded | 764 | 701 |
| Net investment income | 4,31,708 | 3,92,623 |
| Total income | 9,72,914 | 8,84,076 |
| Total commission | 24,440 | 25,309 |
| Operating expenses related to insurance business | 39,510 | 35,415 |
| Total benefits paid | 4,96,104 | 4,16,355 |
Where the Benefits Went
Benefits paid is the biggest outflow. FY 2025-26, ₹ crore.
| Benefit | FY 2025-26 |
|---|---|
| Claims by maturity and periodical benefits | 2,79,951 |
| P&GS withdrawals | 1,10,347 |
| Surrenders (all) | 46,384 |
| Annuities and pensions | 25,641 |
| Claims by death | 24,885 |
| Interim bonus paid | 8,357 |
LIC's Balance Sheet in Brief
Summary balance sheet as at 31 March 2026, ₹ crore.
Share capital
31 Mar 2026
6,325
31 Mar 2025
6,325
Reserves and surplus
31 Mar 2026
1,69,925
31 Mar 2025
1,20,096
Shareholders' funds (net worth)
31 Mar 2026
1,75,356
31 Mar 2025
1,26,188
Policy liabilities
31 Mar 2026
51,00,260
31 Mar 2025
47,35,580
Fair value change account (policyholders)
31 Mar 2026
5,02,788
31 Mar 2025
6,47,540
Provision for linked liabilities
31 Mar 2026
60,398
31 Mar 2025
47,533
Total policyholders' funds
31 Mar 2026
56,87,255
31 Mar 2025
54,47,139
Funds for future appropriations
31 Mar 2026
3,215
31 Mar 2025
1,828
Balance sheet total
31 Mar 2026
58,65,826
31 Mar 2025
55,75,155
Investments: policyholders
31 Mar 2026
53,33,262
31 Mar 2025
51,36,279
Investments: shareholders
31 Mar 2026
1,50,740
31 Mar 2025
1,04,026
Loans
31 Mar 2026
1,29,848
31 Mar 2025
1,27,480
| Item | 31 Mar 2026 | 31 Mar 2025 |
|---|---|---|
| Share capital | 6,325 | 6,325 |
| Reserves and surplus | 1,69,925 | 1,20,096 |
| Shareholders' funds (net worth) | 1,75,356 | 1,26,188 |
| Policy liabilities | 51,00,260 | 47,35,580 |
| Fair value change account (policyholders) | 5,02,788 | 6,47,540 |
| Provision for linked liabilities | 60,398 | 47,533 |
| Total policyholders' funds | 56,87,255 | 54,47,139 |
| Funds for future appropriations | 3,215 | 1,828 |
| Balance sheet total | 58,65,826 | 55,75,155 |
| Investments: policyholders | 53,33,262 | 51,36,279 |
| Investments: shareholders | 1,50,740 | 1,04,026 |
| Loans | 1,29,848 | 1,27,480 |
Quick practice on accounts and ratios. No signup.
How to Read the Balance Sheet
- check_circleShareholders' money is small next to policyholders' money. Net worth is ₹1,75,356 crore against total policyholders' funds of ₹56,87,255 crore. A life insurer's balance sheet is mostly promises to policyholders.
- check_circlePolicy liabilities are the actuary's figure for what LIC owes on policies in force. The report says they depend on the business profile and assumptions about mortality, morbidity, interest and expenses.
- check_circleThe policyholders' fair value change account fell from ₹6,47,540 crore to ₹5,02,788 crore, which the report puts down mainly to mark-to-market movement in share prices. It is an unrealised valuation reserve, not profit.
- check_circleProvision for linked liabilities is the value of units held for ULIP policyholders, at the net asset value on the valuation date.
- check_circleProfit after tax was ₹57,419 crore, after a transfer of ₹58,032 crore from the policyholders' account into the shareholders' account.
Key Ratios LIC Reports
The KPI section of the FY 2025-26 report. Each maps to a ratio in IC-26's financial analysis chapter.
Solvency ratio (within India business)
FY 2025-26
2.35
FY 2024-25
2.11
IRDAI's control level for solvency
FY 2025-26
1.50
FY 2024-25
1.50
Expenses of management ratio
FY 2025-26
11.91%
FY 2024-25
12.42%
Commission ratio
FY 2025-26
4.55%
FY 2024-25
5.18%
13th month persistency (by premium)
FY 2025-26
74.64%
FY 2024-25
74.84%
61st month persistency (by premium)
FY 2025-26
59.31%
FY 2024-25
63.12%
Earnings per share
FY 2025-26
₹90.78
FY 2024-25
₹76.13
| Measure | FY 2025-26 | FY 2024-25 |
|---|---|---|
| Solvency ratio (within India business) | 2.35 | 2.11 |
| IRDAI's control level for solvency | 1.50 | 1.50 |
| Expenses of management ratio | 11.91% | 12.42% |
| Commission ratio | 4.55% | 5.18% |
| 13th month persistency (by premium) | 74.64% | 74.84% |
| 61st month persistency (by premium) | 59.31% | 63.12% |
| Earnings per share | ₹90.78 | ₹76.13 |
Embedded Value and New Business
LIC also reports value measures that the statutory accounts do not show. ₹ crore.
Indian Embedded Value (IEV)
FY 2025-26
7,89,185
FY 2024-25
7,76,876
Annualised Premium Equivalent (APE)
FY 2025-26
66,961
FY 2024-25
56,828
Value of New Business (VNB)
FY 2025-26
14,179
FY 2024-25
10,011
VNB margin (VNB ÷ APE)
FY 2025-26
21.2%
FY 2024-25
17.6%
| Measure | FY 2025-26 | FY 2024-25 |
|---|---|---|
| Indian Embedded Value (IEV) | 7,89,185 | 7,76,876 |
| Annualised Premium Equivalent (APE) | 66,961 | 56,828 |
| Value of New Business (VNB) | 14,179 | 10,011 |
| VNB margin (VNB ÷ APE) | 21.2% | 17.6% |
Par and Non-Par Funds: The LIC Act Rule
Section 24 of the LIC Act, 1956 makes LIC keep separate funds for participating and non-participating policyholders, and section 28 sets how surplus is shared. In the participating fund, 90% or more of the surplus goes to participating policyholders and the rest to the members (shareholders). In the non-participating fund, 100% of the surplus goes to the members. That is why the revenue account figures above are split into Par, Non-Par and Linked columns.
Using the Report for IC-26
Read the summary tables in the Management Discussion and Analysis first; they give the revenue account, profit and loss account and balance sheet on one page each, with last year's figures. Then check them against the full statements. Practise the ratio formulas on LIC's own numbers, and compare the embedded value with the net worth to see why analysts use both. IC-26 tests the framework, not LIC's figures, so do not memorise the numbers.
FAQs
Where can I download LIC's annual report?expand_more
On LIC's website, licindia.in, under its annual reports and AGM pages. The FY 2025-26 report is the 69th Annual Report, for the year ended 31 March 2026. Earlier years are on the same annual reports page.
How big is LIC's balance sheet?expand_more
₹58,65,826 crore as at 31 March 2026, up from ₹55,75,155 crore a year earlier, per LIC's FY 2025-26 Annual Report. Policy liabilities of ₹51,00,260 crore make up most of it.
Does LIC prepare its accounts under Ind AS?expand_more
Not yet for FY 2025-26. Those statements follow Indian GAAP as applied to insurers. IRDAI's Ind AS rules apply from 1 April 2026, and LIC's Directors' Report says IRDAI granted LIC a one-year forbearance.
What was LIC's solvency ratio in FY 2025-26?expand_more
2.35 as at 31 March 2026 for its within-India business, up from 2.11 a year earlier. IRDAI's control level is 1.50.
What was LIC's profit in FY 2025-26?expand_more
Profit after tax of ₹57,419 crore, up 19.25% from ₹48,151 crore in FY 2024-25.
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