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LIC Stock Hits 52-Week Low, Down 34% from August High

Written by: Kusum KumariUpdated on: Jan 14, 2025, 3:25 PM IST
LIC shares hit ₹806.85, down 34% from the August high, amid regulatory changes and declining premiums.
LIC Stock Hits 52-Week Low, Down 34% from August High
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

Life Insurance Corporation of India (LIC) share price dropped to a 52-week low of ₹806.85 during intraday trading on Tuesday. Although the stock recovered slightly, trading 0.74% higher at ₹814.90 by 12:37 PM, it has seen a 34% decline since its peak of ₹1,221.50 on August 1, 2024. Over the past 6 months, LIC’s shares have fallen 24%, underperforming the broader market, where the BSE Sensex declined by 5%.

Declining Premium Collections

LIC’s premium collections for December 2024 fell sharply, dropping 41.15% year-on-year (YoY) to ₹13,523.87 crore. This was mainly due to a notable drop in its group single premium, which halved to ₹8,191.29 crore. Additionally, individual non-single premium collections fell to ₹2,628.74 crore from ₹3,111.33 crore. In contrast, private insurers reported a 7% growth in new business premiums, reaching ₹16,694.85 crore during the same period.

Impact of New Regulations

The implementation of revised surrender value norms has significantly affected LIC. The company raised the minimum ticket size for many products, which has led to a decrease in policy counts and negatively impacted Retail Annualised Premium Equivalent (APE) growth. Pre-sales activity in September 2024, driven by a push to sell older products, further distorted growth figures for the December quarter (Q3FY25).

Focus on Profitable Segments

Despite challenges, LIC is leveraging its market leadership by focusing on profitable segments such as Protection, Non-PAR (non-participating), and Savings Annuity products. Efforts are underway to bridge the gap with private players through new product launches, enhanced distribution channels, and digital initiatives.

Product Redesign and Strategy

LIC has revamped its product portfolio, realigning offerings to meet regulatory expectations, enhance investor profitability, and maintain intermediary benefits. Out of 54 products, 32 have been relaunched with revised premium rates and updated designs. The changes aim to improve persistency while ensuring profitability margins are protected under the new surrender value regulations.

About LIC

Life Insurance Corporation of India is a public sector life insurance company based in Mumbai. It is the largest insurance provider in India and also the biggest institutional investor in the country, managing assets worth ₹52.52 trillion as of March 2024.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

 

Investments in securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 14, 2025, 1:51 PM IST

Kusum Kumari

Kusum Kumari is a Content Writer with 4 years of experience in simplifying financial market concepts. Currently crafting insightful content at Angel One, She specialise in breaking down complex topics into easy-to-understand pieces, blending expertise in market fundamentals and technical analysis.

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