LIC Reports Robust Q3 Performance: Profit Surges Despite Premium Decline

Life Insurance Corporation of India (LIC) has reported a 17% increase in net profit for the third quarter of fiscal year 2024, reaching ₹110.56 billion, up from ₹94.44 billion in the same period the previous year. This growth is primarily attributed to a 30% reduction in employee compensation and welfare expenses, which decreased to ₹66.91 billion. However, the company experienced a 9% decline in net premium income, totaling ₹1.07 trillion. This decrease was driven by a 24% fall in single premiums and a 14% drop in first-year premium collections, influenced by new regulations that reduced charges for policyholders closing their policies before maturity. On a positive note, LIC's solvency ratio improved to 2.02 from 1.93 in the same period last year, indicating a stronger financial position. 

 

In terms of market share, LIC continues to lead the Indian life insurance sector, holding an overall market share of 58.90% in First Year Premium Income (FYPI). For the nine months ending December 31, 2023, the company maintained a market share of 38.74% in individual business and 72.24% in group business. 

 

Company's Performance Update for Nine months Ended December 31st 2024 (9M - FY25) are presented as follows:

- Profit After Tax increased by 8.27% to Rs. 29,138 crore 

- Individual Business Non Par APE increased by 106.52% to Rs 6,813 crore 

- Non Par APE share within Individual business at 27.68% for 9MFY25 as compared to 14.04% for 9MFY24

- Value of New Business (VNB) increased by 9.08% to Rs 6,477 crore 

- VNB Margin (Net) increased by 50 bps to 17.1% 

- New Business Premium Income (Individual) increased by 9.73% to Rs. 42,441 crore 

- Total Premium Income increased by 5.51% to Rs. 3,40,563 crore

- AUM increased by 10.29% to Rs 54,77,651 crore 

- Overall APE increases by 6.11% to Rs. 37,975 crore 

- Individual Business APE increased by 4.72% to 24,612 crore and Group Business 

- APE increased by 8.76% to Rs. 13,363 crore 

- Solvency Ratio increased to 2.02 from 1.93 

- Expense ratio reduced by 231 bps to 12.97% for 9MFY25 from 15.28% for 9MFY24

 

Source: Reuters, BSEINDIA