LIC Q3 Results Review - Margin Rise Should Be Seen In The Context Of RoEV: Yes Securities

Yes Securities Report

Life Insurance Corporation Ltd.'s value of new business margin has expanded more than 400 basis points on sequential basis. The key reason for the sequential expansion in margin was the rise in the share of Non-Par, which in turn was driven by the Jeevan Ustav, which is a whole life product with long policy term.

As a result, the non-par savings’ average policy term has jumped from 16 years to 43 years. The margin expansion is despite revisions in annuity pricing, which were effected to aid annual premium equivalent growth and which, among other benefit changes, have led to an erosion of 360 bps in VNB margin on YoY basis, for the nine-month period.

Management has stated that LIC is in line with what they had committed at the time of listing and would continue their effort, which would lead to further improvement in margin.

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