“During the last year, we have focused on directional changes in our product mix and enhancing margins in the business. We have more than doubled our share of non-par business within our Individual business. Now we intend to focus our strategic interventions to maximize our market share across categories. At the same time, our sharp focus on various parameters which create superior value for all stakeholders shall continue, as demonstrated. There are key initiatives related to distribution channel and digital transformation underway. We look forward to this current year as the one in which our topline growth trajectory will be back in focus.” Siddhartha Mohanty, chairman, LIC
Mumbai:
With the government keen to allow composite license soon, life insurance behemoth LIC is now actively considering entering into health insurance.
The corporation is also weighing in options to acquire a health insurance company after necessary laws are in place.
“There is an expectation that composite licenses may be permitted by the new government, and we have done some internal groundwork. While we lack expertise in general insurance, we are interested in health insurance and are also considering opportunities for inorganic growth,” said Siddhartha Mohanty, chairman, LIC at a media meet on Monday to announce its annual results.
Recently, Vivek Joshi, secretary, Department of Financial Services in the Finance Ministry, had indicated that insurance reforms including composite license, by which insurer, with license, will be allowed to do life, non-life and health business, were being considered by the government and appropriate legislative measures will be initiated at the right moment though no exact timeline can be given on this front.
At present, life insurance companies like their non-life counterparts are not allowed to provide indemnity coverages.
Meanwhile, due to large expenses for the new wage bill for its employees, LIC on Monday posted a marginal 2 per cent increase in its net profit at Rs 13,763 crore in the fourth quarter ended March 2024.
The insurer had earned a profit of Rs 13,428 crore in the corresponding quarter a year earlier.
However, LIC’s earnings were further aided by the reversal of a tax provision amounting to Rs 7693 crore . The insurer said it included the amount in the “other income” section of its results.
The total income of the insurer during the reporting quarter rose to Rs 250,923 crore from Rs 200,185 crore in the same period of the previous fiscal, LIC said in a regulatory filing.
LIC’s income from first-year premium also improved to Rs 13,810 crore in the latest January-March quarter against Rs 12,811 crore in the same period of preceding fiscal.
The corporation’s Board of Directors, which met today to finalise its results for the Q4FY24, recommended a final dividend of Rs 6 per share for the financial year 2023-24 subject to approval of shareholders. Earlier, during the year an interim dividend of Rs. 4/- was declared and paid to shareholders of the corporation. Therefore the total of interim and recommended final dividend aggregates to Rs 10 per share.
The income from renewal premiums in the reporting period rose to Rs 77,368 crore compared to Rs 76,009 crore a year ago.
During the entire financial year ended March 2024, the insurer earned a profit of Rs 40,676 crore as compared to Rs 36,397 crore in the previous fiscal.
Siddhartha Mohanty, chairperson, LIC said, “During the last year we have focused on directional changes in our product mix and enhancing margins in the business. We have more than doubled our share of non-par business within our Individual business. Now we intend to focus our strategic interventions to maximize our market share across categories. At the same time, our sharp focus on various parameters which create superior value for all stakeholders shall continue, as demonstrated. There are key initiatives related to distribution channel and digital transformation underway. We are confident that our employees, agents and our channel partners are fully committed to achieving these objectives. We look forward to this current year as the one in which our topline growth trajectory will be back in focus.”
The Value of New Business (VNB) for the year ended March 31st, 2024 was Rs. 9,583 crore as compared to Rs. 9,156 crore for the year ended March 31st, 2023, registering a growth of 4.66%. The net VNB margin for the year ended March 31st , 2024 increased by 60 bps to16.80 per cent as compared to 16.20 per cent for the year ended March 31st, 2023.
In terms of market share measured by First Year Premium Income (FYPI), LIC continues to be the market leader by market share in Indian life insurance business with overall market share of 58.87 per cent .
For the year ended March 31st 2024, LIC had a market share of 38.44 per cent in Individual business and 72.30 per cent in the Group business.
The total premium income for year ended March 31st 2024 was Rs. 4,75,070 crore as compared to Rs. 4,74,005 crore for the year ended March 31st 2023. The total individual business premium for the year ended March 31st 2024 increased to Rs 3,03,768 crore from Rs. 2,92,763 crore for the comparable period of previous year.
The group business total premium income for year ended March 31st 2024 was Rs. 1,71,302 crores as compared to Rs 1,81,242 crore for the year ended March 31st 2023.
A total of over two crore policies were sold in the individual segment during the year ended March 31st, 2024 as compared to 2,04,28,937 policies sold during the year ended March 31st, 2023. On an Annualized Premium Equivalent (APE) basis, the total premium was Rs 56,970 crore.
The corporation’s assets under management (AUM) increased to Rs. 51,21,887 crore as on March 31st 2024 as compared to Rs. 43,97,205 crore on March 31st, 2023 registering an increase of 16.48 per cent year on year.
The overall expense ratio for the year ended March 31st , 2024 was 15.57 per cent as compared to 15.53 per cent for the year ended March 31st , 2023.
LIC shares closed up 0.6% at Rs 1,037.65 at NSE ahead of the results.