LIC Q1 Results Review - Pursuing A More Balanced Volume Margin Strategy: ICICI Securities

ICICI Securities Report

Life Insurance Corporation of India is progressing well towards increasing value of new business (4.7% growth in FY24 and 23.7% in Q1 FY25) by pushing its product mix towards non-participating (24% of individual annual premium equivalent in Q1 FY25 versus 18% in FY24 and 9% in FY23) along with appropriate pricing to maximise volume (1%/21% growth in FY24/Q1 FY25) along with continued focus on distribution.

There is expansion in non-agency distribution channels (4.2% of individual NBP in Q1 FY25 versus 3.9%/4% in FY23/24) as well as focus on agency (launch of a new transformation project called ‘Jeevan Samarth’).

We have always believed that product mix driven possible rise in VNB margin is achievable and underappreciated by the market.

This along with strong capital markets make deeply discounted valuations unwarranted. Possible health foray through composite license is an added optionality.

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