LIC Reports Strong Growth in Q1 FY25: Profit Rose Over 9% YoY

Life Insurance Corporation of India (LIC) announced robust financial results for the quarter ending June 30, 2024. The company’s Profit After Tax (PAT) surged to ₹10,461 crore, up from ₹9,544 crore in the same period last year, representing a growth of 9.61%.

LIC maintained its market leadership in the Indian life insurance sector, capturing a market share of 64.02% based on First Year Premium Income (FYPI). The company’s individual business accounted for 39.27% of the market share, while the group business held a commanding 76.59% share.

Total premium income for Q1 FY25 reached ₹1,13,770 crore, a significant increase of 15.66% from the previous year’s ₹98,363 crore. Individual business premiums rose by 7.04% to ₹67,192 crore, and group business premiums surged by 30.87% to ₹46,578 crore.

LIC sold 35,65,519 policies in the individual segment during the quarter, marking a 10.86% increase from the previous year’s 32,16,301 policies.

On an Annualized Premium Equivalent (APE) basis, the total premium for Q1 FY25 was ₹11,560 crore, with individual business contributing 58.37% (₹6,747 crore) and group business accounting for the remaining 41.63% (₹4,813 crore). Within the individual business, par products represented 76.06% (₹5,132 crore) of the APE, while non-par products accounted for 23.94% (₹1,615 crore). Notably, non-par APE increased by 165.63% from ₹608 crore in Q1 FY24 to ₹1,615 crore in Q1 FY25, boosting the non-par share of the individual business from 10.22% to 23.94%.

The Value of New Business (VNB) for Q1 FY25 stood at ₹1,610 crore, up from ₹1,302 crore in the previous year, representing a growth of 23.66%. The net VNB margin improved by 20 basis points to 13.9% from 13.7%.

LIC’s Solvency Ratio increased to 1.99 as of June 30, 2024, from 1.89 on June 30, 2023. The company’s persistency ratios remained strong, with 13th-month and 61st-month premium-based persistency ratios of 78.23% and 61.62%, respectively. Policy-based persistency ratios were 67.81% and 49.39% for the same periods.

Assets Under Management (AUM) grew by 16.22% year-on-year to ₹53,58,781 crore as of June 30, 2024. The Overall Expense Ratio decreased by 98 basis points to 11.87% from 12.85% in the previous year. The Yield on Investments in policyholders’ funds, excluding unrealised gains, was 8.54% for Q1 FY25, compared to 8.78% in Q1 FY24.

Shri Siddhartha Mohanty, CEO & MD, LIC, said:– “During the first quarter of this financial year, our market share increased to 64.02% as compared to 61.42% for the same quarter of the previous year and 58.87% for the full year ended March 31, 2024. LIC is progressing on its stated objective of gaining market share after having focused, during the last year, on consolidating changes in product mix, channel mix and margin improvement. The momentum around increasing the share of Non-Par products within the Individual segment continues, and our Non-Par Share, on an APE basis, within the Individual business has increased to 23.94% in the first quarter of FY25 as compared to 10.22% for the same quarter last year.”

He further added, “While achieving these growth parameters, our margin is stable, and our expenses ratio has declined by 98 bps to 11.87% in this quarter. As leaders of the insurance industry in India, we are conscious of our responsibility to deliver enhanced insurance penetration, and we look forward to working with the regulatory authorities to achieve the same. We are committed to further optimising our product and channel mix and improvement of margins. With the digital transformation exercise underway, we intend to create a seamless experience for our customers and partners. We thank our customers, shareholders, distribution partners and employees whose continuous support allows us to create superior sustainable value as we move to the next stage of our journey.”

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