Insurance behemoth Life Insurance Corporation of India (LIC) on Thursday reported a 9.4 per cent increase in consolidated net profit for the quarter ended June 30, 2024, to ₹10,544 crore (₹9,635 crore).
The latest bottomline performance was however 23.5 percent lower than consolidated net profit of ₹13,782 crore recorded in the March 2024 quarter. In the entire 2023-24, LIC had reported net profit of ₹40,676 crore, 11.8 per cent higher on year-on-year (y-o-y) basis.
For the quarter under review, net premium income on consolidated basis came in at ₹1,14,230 crore, up 15.7 percent over the ₹98,755 crore reported in the same quarter last fiscal, per latest filing with stock exchanges.
Commenting on the Q1 performance, Siddhartha Mohanty, CEO and MD, said the strategic shift in LIC’s approach and product mix and channel mix changes of last two years has bolstered its financial performance. He also noted it would not be right to compare the latest Q1 bottomline performance with recent March 2024 quarter as Q4 is usually a strong quarter for entire life insurance industry. “Fourth quarter is always going to be strong. The right way to look at our performance is Q1 over Q1 last year and our profits have grown 9.4 percent on this front”, Mohanty said.
He also expressed confidence that LIC will perform better in the coming quarters as well and sustain it for the entire fiscal 2024-25 as compared to last fiscal.
Asked as to how much profits LIC booked in equity markets in April-June 2024, Mohanty told businessline that total profits made was ₹15,500 crore, up 13.5 per cent on quarter-on-quarter.
He also said that LIC has, in latest June 2024 quarter, invested ₹38,000 crore in equity markets, compared with ₹23,300 crore invested in the same quarter last fiscal. In entire 2023-24, LIC had invested ₹1,32,000 crore in equities.
Asked about health insurance foray, Mohanty said that LIC was looking to pick a majority stake in a standalone health insurer. “We expect to have a composite licence. We will make details of health insurance foray public once all work is done. Preliminary work is going on. We want a separate company for health”, he added.
On whether LIC is aware of any stake dilution plans by government, Mohanty replied in the negative. “It is for the government to take a call at an appropriate time. We have nothing to say on this”, he added.
Mohanty said that LIC had in the first quarter this fiscal increased its market share to 64.02 per cent as compared to 61.42 per cent for the same quarter of previous year and 58.87 per cent 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, he said.
“The momentum around increasing share of non-par products within individual segment continues and our non-par share, on an APE basis, within the individual business has increased to 23.94 per cent in the first quarter of FY25 as compared to 10.22 per cent for the same quarter last year. While achieving these growth parameters our margin is stable and our expenses ratio has declined by 98 bps to 11.87 per cent in this quarter”.
The value of new business (VNB) for the quarter stood at ₹1,610 crore compared with ₹1,302 crore for the quarter ended June 30th, 2023, registering a growth of 23.66 per cent. The net VNB margin for the quarter ended June 30, 2024 increased by 20 bps to 13.9 per cent as compared to 13.7 per cent for the quarter ended June 30, 2023.
The Solvency Ratio as on June 30, 2024 increased to 1.99 as against 1.89 on June 30, 2023.
For the quarter ended June 30, 2024, the persistency ratios on premium basis for the 13th month and 61st month were 78.23 percent and 61.62 per cent, respectively. The comparable persistency ratios for the corresponding quarter ended June 30th, 2023 were 78.37 per cent and 62.73 per cent, respectively.
Assets Under Management (AUM) increased to ₹ 53,58,781 crore as on June 30th, 2024 as compared to ₹ 46,11,067 crore on June 30th, 2023 registering an increase of 16.22 percent year on year. The Overall Expense Ratio for the quarter ended June 30th, 2024 was 11.87% as compared to 12.85 percent for the quarter ended June 30, 2023, registering a decrease of 98 bps. The Yield on Investments on policyholders funds excluding unrealized gains was 8.54 percent for the quarter ended June 30th, 2024 as against 8.78 percent for quarter ended June 30th, 2023.