LIC Q2 Results: Profit Down 3.7%, Misses Estimates

Life Insurance Corp.'s profit decreased during the second quarter of fiscal 2025.

The state run insurer saw its consolidated net profit decline 3.7% year-on-year to Rs 7,729 crore in the quarter ended September from Rs 8,030 crore in the year-ago period, according to an exchange filing on Friday. The company was expected to see a bottom line of Rs 8,435 crore, according to analysts' estimates compiled by Bloomberg.

The country's largest insurer reported a net premium income growth of 12%, reaching Rs 1.2 lakh crore for the period as compared to Rs 1.1 lakh crore in the same period last year.

The company's solvency ratio improved to 1.98 from 1.9 in the year-ago period. The solvency ratio of an insurance company is how much capital it has compared to the risk it has taken on. As per regulatory requirements, insurance companies must maintain a solvency ratio of 1.5 and anything higher than this is considered good.

Gross non-performing assets narrowed to 1.72%, compared to 1.95% in the previous quarter.

LIC's annualised premium equivalent grew by 25.74% to Rs 16,465 crore, compared to Rs 13,095 crore in the same quarter last year. The APE is the total value of regular or recurring premiums plus 10% of new single premiums written in the period.

Value of new business saw a significant increase of 47%, reaching Rs 2,941 crore, up from Rs 2,002 crore a year ago. The VNB margin also improved to 17.86%, up from 15.29% in the June quarter.

However, the 13th-month persistency ratio declined to 68.17% from 71.19% year-on-year, and the 61st-month persistency ratio also dropped slightly to 54.76% from 55.17%.

Total assets under management increased 17% to Rs 55.4 lakh crore as of Sept. 30.

LIC's market share in the second half of the fiscal increased to 61.07% as compared to 58.50% for the same period of previous year.

"Our strategy on enhancing market share along with changes in product and channel mix, without compromising on profitability, is yielding very visible results," Chief Executive Officer Siddhartha Mohanty said.