Siddhartha Mohanty, CEO & MD, LIC
The value of new business (VNB) margin of the corporation has also improved to 17.1 per cent for the nine months period ended December 31st 2024, as compared to 16.6 per cent for the same period last year.
Mumbai: Life Insurance Corporation of India (LIC), the country’s biggest insurer, reported a 17% rise in third-quarter profit on Friday, helped by a fall in employee-related expenses.
LIC’s profit after tax rose by 17 per cent year on year(Y-O-Y) to Rs 11,056 crore ($1.26 billion) for the quarter ended December 31 from Rs 9,444 crore a year earlier.
The insurer had boosted sales before the norm changed from October. Its net premium income dropped 9% to Rs 1.07 trillion, driven by a 24 per cent fall in single premiums and a 14 per cent decline in first-year premium collection.
Siddhartha Mohanty, CEO & MD, LIC, said,“ In a dynamic environment, our focus and strategy remains consistent towards changing our product and channel mix to serve the needs of our customers. For the nine months period ended December 31st 2024, the Non Par share within the individual business increased to 27.68 per cent, on an Annual Premium Equivalent (APE) basis, as compared to 14.04 per cent for the same period last year. We adapt, reimagine and realign our business to a fast changing industry scenario. In coming months, the outcomes of our digital transformation initiatives will be visible. ”
Further, the value of new business (VNB) margin of the corporation has also improved to 17.1 per cent for the nine months period ended December 31st 2024, as compared to 16.6 per cent for the same period last year.
On the new surrender norms effective from October 1, 2024. LIC officials clarified that it did not majorly impact the corporation and has adopted a mix of changes in commissions based on persistency and revisions in ticket size to mitigate the impact of regulations
“On the basis of regulatory changes, we have taken conscious measures to cater to our business strategy. We have increased the ticket size of policies based on their persistency. Based on expected expenses, we have revised the premium rates in some products, Considering the likely impact of customer behaviour, we continue to provide for customer needs with a Rs 1 lakh sum insured,” LIC officials said.
“Since, we value our agents, we have not implemented clawbacks. Instead, we have realigned commission rates to ensure alignment between persistency experience and rewards,” added the officials.
LIC’s net income from investments also slipped 0.97 per cent Y-o-Y to Rs 94,335.72 crore in Q3FY25.
Assets under management (AUM) of the corporation stood at Rs 54.77 trillion as of December 31, 2024, up 10.3 per cent Y-o-Y.
Till date more than 1.25 lakh women have been registered and more than 70,000 have been appointed as Bima Sakhis.
LIC’s employee compensation and welfare expenses dropped 30 per cent to Rs 6,691 crore.
LIC’s policy sales in the quarter were under pressure due to new regulations, which reduced the charges policyholders paid if they closed their policies before maturity.
The life insurer’s solvency ratio, the measure of an insurer’s ability to meet its long-term financial obligations, rose to 2.02 during the quarter from 1.93 a year earlier and 1.98 in the prior quarter.
Shares of the insurer ended 1.5% lower ahead of results.