LIC Q4 Results Review - Breaking Free From Low Double-Digit RoEV Difficult: Yes Securities

Yes Securities Report

The value of new business margin of Life Insurance Corporation of India for FY24 amounts to 16.8% compared with 16.2% in FY23, implying a 60 basis points improvement YoY. The share of non-par within individual business for FY24 has improved by 943 bps YoY to 18.32%. However, there has been a decline in the Par and Group margin.

One of the factors is the southward movement of risk-free rate, which impacted all segments negatively. The other factor, which impacted Group business margin negatively, is the revision of annuity rates, with more benefits being given.

There is also significant competitive pressure in Group business. Furthermore, there was a lot of deficit in the Group business, which was made good with the Group funded business, which typically has lower margin. There is a conscious strategy to balance growth with margin. For the quarter, calculated VNB margin for Q4 FY24 declined -280 bps QoQ to 17.2%.

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