Siddhartha Mohanty, CEO & MD, LIC
LIC’s plan to pick up some stakes in a stand alone health insurer is in progress and should be announced in the current fiscal,” Siddhartha Mohanty, CEO & MD, LIC
Mumbai: Life insurance behemoth Life Insurance Corporation(LIC) has seen its net profit growing by 3.51 per cent to Rs 18,082 crore in first of half of FY 2025 as compared to Rs. 17,469 crore for the half year of the corresponding period of Fy 2024.
However, LIC’s net profit fell 4 per cent in its standalone net profit to Rs 7,621 in the second quarter of FY 2025 from Rs 7,925 crore in the year-ago quarter.
“The profit has fallen in the second quarter because of amortization of certain expenses,” said Siddhartha Mohanty, CEO & MD, LIC at a media meet on Friday to announce the results.
Mohanty said the the corporation’s plan to pick up some stakes in a stand alone health insurer is in progress and should be announced in the current fiscal.
“Details of such investment in a health insurer will be decided by our board,” said Mohanty.
Investment income of the corporation during the reporting soared 16 per cent year-on-year (YoY) to Rs1.08 lakh crore in the September quarter, compared with Rs 93,942 crore in the same quarter last year.
The board of directors of LIC approved its standalone and consolidated financial results for the six months ending September 30th, 2024.
The corporations’ Value of New Business (VNB) for the six months period ended September 30th, 2024 was Rs 4,551 crore as compared to Rs 3,304 crore for the six months period ended September 30th, 2023, registering a growth of 37.74 per cent.
LIC’s net VNB margin for the six months period ended September 30th, 2024 increased by 160 bps to 16.20 per cent as compared to 14.6% for the six months period ended September 30th, 2023.
The life insurer’s Indian Embedded Value (IEV) as on September 30th,2024 has been determined as Rs 8,21,716 crore as compared to Rs. 6,62,605 crore as on September 30th, 2023 registering an increase of 24.01 per cent over the previous year.
Mohanty, further said, “During the first half of this year (FY 2024-25), LIC has been successful in delivering holistic growth on various business parameters such as market share, premium, Non par share within Individual business, VNB, VNB Margin and Embedded Value.”
LIC’s assets under management (AUM) increased to Rs. 55,39,516 crore as on September 30th, 2024 as compared to Rs 47,43,389 crore on September 30th, 2023 registering an increase of 16.78 per cent year-on- year.
The corporation’s solvency ratio as on September 30th, 2024 increased to 1.98 as against 1.90 on September 30th, 2023.
In terms of market share measured by First Year Premium Income (FYPI) (as per IRDAI),
LIC continues to be the market leader in Indian life insurance business with overall market share of 61.07 per cent for half year ended September 30th 2024 as compared to 58.50% for half year ended September 30th 2023.
For the half year ended September 30th, 2024, LIC had a market share of 39.79 per cent in Individual business and 74.77 per cent in the group business.
“Our margin trajectory is on the upswing and our VNB margin for H1FY25 is 16.2% as compared to 14.6 per cent for similar period last year. Our strategy on enhancing market share along with changes in product and channel mix, without compromising on profitability, is yielding very visible results,” said Mohanty.
“Further we have aligned our products with the new regulatory guidelines by redesigning them in such a manner that the interest of customers, shareholders and various marketing channel partners are taken care of, ” explained Mohanty.
“We are confident that all such changes which are friendly to customers will eventually expand the life insurance market in the country. We are committed to continue to play a significant role in the further development of the life insurance market with the support of all our stakeholders,” said Mohanty.
The total premium income for six months period ended September 30th, 2024 was Rs.
2,33,671 crore as compared to Rs. 2,05,760 crore for the six months period ended September 30th 2023, registering a growth of 13.56 per cent.
Individual New Business premium income for six months period ended September 30th, 2024 was Rs. 29,538 crores as compared to Rs 25,184 crore for the six months period ended September 30th 2023, registering an increase of 17.29%.
The Individual Renewal premium income for six months months period ended September 30th, 2024 was Rs. 1,15,158 crores as compared to Rs 1,09,599 crore for the six months period ended September 30th 2023, registering an increase of 5.07%.
The Total Individual Business Premium for the six months period ended September 30th, 2024 increased to Rs. 1,44,696 crore from Rs. 1,34,783 crore for the comparable period of previous year, registering an increase of 7.35%.
The Group Business total premium income for six months period ended September 30th, 2024 was Rs. 88,975 crores as compared to Rs 70,977 crore for the six months period ended September 30th 2023, registering an increase of 25.36%.
A total of 91,70,420 policies were sold in the individual segment during the six months period ended September 30th, 2024 as compared to 80,60,725 policies sold during the six months period ended September 30th 2023, registering a growth of 13.77%.
On an Annualized Premium Equivalent (APE) basis, the total premium was Rs. 28,025
crore for the six months period ended September 30th, 2024. Of this 64.81% (Rs. 18,163
crore) was accounted for by the Individual Business and 35.19% (Rs. 9,862 crore) by the
Group Business. Within the Individual Business, the share of Par products on APE basis was 73.69% (Rs. 13,385 crore) and balance 26.31% (Rs. 4,778 crore) was due to Non Par
products.
The Individual Non Par APE has increased to Rs. 4,778 crore for the six months
period ended September 30th, 2024 from Rs. 1,575 crore for the six months period ended September 30th, 2023 registering a growth of 203.37 per cent. Therefore on APE basis, our Non Par share of Individual business has increased to 26.31 per cent for the six months period ended September 30th, 2024, as compared to 10.76 per cent for the six months period ended September 30th, 2023.
For the six months period ended September 30th, 2024, the persistency ratios on premium basis for the 13th month and 61st month were 77.62 per cent and 61.46 per cent, respectively.
The comparable persistency ratios for the corresponding period ended September 30th, 2023 were 78.49 per cent and 62.53 per cent, respectively.
The overall expense ratio for the six months period ended September 30th, 2024 decreased by 240 bps to 12.74 per cent as compared to 15.14 per cent for the six months period ended September 30th 2023.
The yield on investments on policyholders funds excluding unrealized gains was 9.02 per cent for the six months period ended September 30th, 2024 as against 9.06% for six months period ended September 30th, 2023.