In a recent press release dated November 8, 2024, LIC presented its half-yearly performance update for the fiscal year ending September 30, 2024. LIC latest financial and operational milestones demonstrate a substantial growth trajectory across multiple metrics, underscoring its position as a dominant player in the insurance sector. This report provides a detailed look into LIC’s achievements, along with the strategic indicators that contributed to the company’s upward momentum.
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Key Performance Indicators and Growth Metrics
- Overall Market share increased to 61.07% for H1FY25 from 58.50% for H1FY24.
- Total Premium Income increased by 13.56% to Rs. 2,33,671 crore.
- New Business Premium Income (Individual) increased by 17.29% to Rs. 29,538 crore.
- Overall APE increases by 23.86% to Rs. 28,025 crore.
- Individual Business APE increased by 24.08% to 18,163 crore and Group Business APE increased by 23.44% to Rs. 9,862 crore.
- Individual Business Non Par APE increased by 203.37% to Rs 4,778 crore.
- Non Par APE share within Individual business at 26.31% for HIFY25 as compared to 10.76% for H1FY24.
- Value of New Business (VNB) increased by 37.74% to Rs 4,551 crore.
- VNB Margin (Net) increased by 160 bps to 16.2%
- Indian Embedded Value increased by 24.01% to Rs 8.22 lakh crore.
- AUM increased by 16.78% to Rs 55.40 lakh crore.
- Solvency Ratio increased to 1.98 from 1.90
- Expense ratio reduced by 240 bps to 12.74% for HIFY25 from 15.14% for HIFY24.
- No. of individual policies sold increased by 13.77% to 91.70 lacs.
- Profit After Tax increased by 3.51% to Rs. 18,082 crore.
- Mumbai, November 8th, 2024: The Board of Directors of Life Insurance Corporation of India (“LIC”) approved and adopted the standalone and consolidated financial results for the six months ending September 30th, 2024. Below are the key highlights of our standalone results.
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The Profit after Tax (PAT) for the half year ended September 30th, 2024 was Rs. 18,082 crore as compared to Rs. 17,469 crore for the half year ended September 30th, 2023 registering a growth of 3.51%.
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% 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% in Individual business and 74.77% in the Group business.
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%.
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 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%.
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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%. Therefore on APE basis, our Non Par share of Individual business has increased to 26.31% for the six months period ended September 30th, 2024, as compared to 10.76% for the six months period ended September 30th, 2023.
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The 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%. The Net VNB margin for the six months period ended September 30th, 2024 increased by 160 bps to 16.2% as compared to 14.6% for the six months period ended September 30th, 2023.
The 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% over the previous year.
The Solvency Ratio as on September 30th, 2024 increased to 1.98 as against 1.90 on September 30th, 2023.
For the six months period ended September 30th, 2024, the persistency ratios on premium basis for the 13th month and 61 month were 77.62% and 61.46%, respectively. The comparable persistency ratios for the corresponding period ended September 30th, 2023 were 78.49% and 62.53%, respectively.
For the six months period ended September 30th, 2024, the persistency ratios on number of policies basis for the 13th month and 61″ month were 67.23% and 48.92%, respectively. The comparable persistency ratios for the corresponding period ended September 30th, 2023 were 66.80% and 50,35%, respectively.
The 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% year on year.
The Overall Expense Ratio for the six months period ended September 30th, 2024 decreased by 240 bps to 12.74% as compared to 15.14% for the six months period ended September 30th 2023.
The Yield on Investments on policyholders funds excluding unrealized gains was 9.02% for the six months period ended September 30th, 2024 as against 9,06% for six months period ended September 30th, 2023.
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CEO & MD’s Statement on LIC Performance and Strategic Direction
Shri Siddhartha Mohanty, CEO & MD of LIC, shared his insights on the company’s performance and strategic focus for the fiscal year 2024-25:
“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. Our market share for H1 FY25 has increased to 61.07% as compared to 58.50% for the same period of the previous year and 58.87% for the full year ended March 31, 2024. Further, we have been consolidating our gains in terms of changing our product mix. The Non Par APE share of Individual business for H1 FY25 now stands at 26.31% as compared to 10.76% for the similar period of the previous year. Our margin trajectory is on the upswing, and our VNB margin for H1 FY25 is 16.2% as compared to 14.6% for a similar period last year.”
Shri Mohanty went on to highlight LIC’s strategy of enhancing market share alongside product and channel mix adjustments, emphasizing profitability without compromise:
“Our strategy on enhancing market share along with changes in product and channel mix, without compromising on profitability, is yielding very visible results. 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. At LIC, 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.”
This statement underscores LIC’s dedication to sustainable growth, customer-centric product design, and its commitment to stakeholders, while driving innovation in line with regulatory changes.
key operational and financial metrics
Conclusion of the press release report
The half-yearly performance update for FY 2024-25 showcases LIC’s remarkable progress and its stronghold in the insurance sector. With increased market share, robust premium growth, and enhanced profitability through VNB margin expansion, LIC has demonstrated its capability to adapt to changing market conditions while staying true to its customer-centered and stakeholder-driven values. The strategic emphasis on a diversified product mix, digital transformation, and adherence to new regulatory guidelines reflects LIC’s commitment to long-term growth and leadership in the life insurance industry.
Shri Siddhartha Mohanty’s vision, as articulated in his statement, highlights LIC’s dedication to enhancing market reach without compromising on profitability or customer interests. With its reinforced distribution channels, expanded product portfolio, and unwavering focus on both technology and sustainability, LIC is poised to continue leading the life insurance sector in India. As it moves forward, LIC’s ongoing efforts to balance innovation with traditional values will not only strengthen its market position but also contribute significantly to the growth of the insurance industry as a whole, supporting its vast customer base and the wider Indian economy.
FAQs
What contributed to LIC’s increase in market share for H1 FY2025?
LIC’s market share rose to 61.07% in H1 FY2025 due to a strong focus on premium income growth, a shift in product mix towards non-participating (Non-Par) policies within the Individual Business segment, and the introduction of customer-friendly product redesigns. Additionally, LIC’s extensive distribution channels and enhanced digital transformation have helped it capture a larger market.
What is the significance of the Non-Par APE share in LIC’s performance?
Non-Par APE share, which rose significantly to 26.31% from 10.76% in H1 FY2024, represents the share of non-participating insurance products in LIC’s portfolio. This growth indicates an increased demand for products that offer fixed benefits, such as guaranteed returns, which are less affected by market fluctuations. The focus on Non-Par policies has contributed to LIC’s revenue and profitability improvements.
How has LIC’s Value of New Business (VNB) and VNB margin evolved this year?
LIC’s VNB saw a 37.74% increase to ₹4,551 crore, driven by the successful acquisition of high-value policies and a more profitable product mix. The VNB margin, an indicator of profitability, also improved by 160 basis points, reaching 16.2% in H1 FY2025. This shows LIC’s strategic alignment of products and distribution, optimizing profitability while expanding coverage.
What is LIC’s approach to digital transformation and its impact on customer experience?
LIC has committed to enhancing digital infrastructure to streamline operations and improve customer experience. Digital transformation has enabled LIC to offer faster services, including claim processing and policy management, while expanding its reach to tech-savvy customers. This focus on digital platforms has contributed to customer satisfaction and operational efficiency, helping LIC maintain its competitive edge.
How is LIC preparing for regulatory changes in the insurance sector?
LIC has aligned its products with the latest regulatory guidelines by redesigning policies to meet new requirements. This proactive approach ensures customer interests are safeguarded while meeting shareholder expectations. LIC’s efforts to adapt to regulatory shifts demonstrate its dedication to transparency, sustainability, and compliance, strengthening its position in a rapidly evolving market.
Disclaimer: This article is for informational purposes only and reflects LIC’s performance as per the half-yearly report ending September 30, 2024. It does not constitute financial advice or an endorsement of LIC’s products. Readers are advised to consult financial professionals before making any investment or insurance decisions. LIC policies and performance metrics are subject to market and regulatory changes.