LIC Q3 Results: Profit Rises 49%, VNB Margin At 20%
The net premium of the company rose 5% year-on-year to Rs 1,17,017 crore.
Life Insurance Corp.'s standalone profit surged in the third quarter of fiscal 2024.
The state-owned insurer's standalone profit after tax rose 49% year-on-year to Rs 9,444 crore, according to an exchange filing on Thursday.
The net premium of the company rose 5% year-on-year to Rs 1,17,017 crore.
Sequentially, its bottom line rose 19% and its net premium was up 9% over the previous quarter.
LIC Q3 FY24 Highlights (Standalone, YoY)
The value of new business, on a net basis, rose 46% to Rs 2,634 crore vs Rs 1,801 crore.
Net VNB margin stood at 20% versus 14.6%.
Revenue rose 8% to Rs 2.1 lakh crore.
On an annualised premium equivalent basis, total APE rose 7% to Rs 13,163 crore.
The 13th month persistency ratio—or customer retention— on premium basis improved to 78% from 77.61%. For the 61st month, it fell to 62.40% from 62.73%.
The solvency ratio, which measures the extent to which assets cover commitments for future liabilities, rose to 193% from 185%. It's above the minimum requirement of 150%.
Other Highlights (9M FY24, YoY)
Total premium fell 6% to Rs 3.2 lakh crore.
The total individual premium rose 5% year-on-year. Of this, renewal premium was up 6%, while new business premium was down 0.4%.
Group premium was down 20%.
VNB margin were at 16.6% versus 14.6%.
Share of non-par APE in the product mix increased to 14.04% from 9.45%, while that of participating policies fell to 85.96% from 90.55%.
Assets under management have risen 12% to Rs 49.7 lakh crore from Rs 44.3 lakh crore.
Equity makes up for 25% of LIC’s AUM, the management disclosed at the press conference.
The overall expense ratio was at 15.28% versus 15.26%.
The yield on investments in policyholders' funds, excluding unrealised gains, improved to 9.14% as compared with 8.58% in the previous year.
"Our consistent and focused approach towards diversifying and changing our product mix is now yielding results at a faster pace. The same is evident in the rise in the share of non-par business on APE basis to 14.04% of our total individual business for the first nine months of FY24," said Siddhartha Mohanty, chairperson of LIC, in the filing.
"The fact that this is also accompanied by 200 bps increase in the VNB margin levels to 16.6% is an indicator that our strategic interventions are delivering in the manner that we envisaged," he said.
The company is committed to developing new products designed to meet the evolving needs of customers, Mohanty said. "With our digital transformation project underway, we are confident of making significant improvements in our business processes."
While addressing the media, Mohanty did not commit to VNB margin outlook, but said that this was just the beginning and there is a lot of scope for growth.
On Bima Sugam
The board also approved the proposal to invest Rs 1 lakh in cash towards the company being incorporated for Bima Sugam platform—the one-stop electronic platform for the life, health and general insurance needs—proposed by the insurance regulator. This is towards the first tranche, where LIC will hold 8.3% of the initial capital. In the second tranche, it shall buy additional equity not exceeding 2%.
Mohanty said that Bima Sugam "will happen for sure" and "is in the formative stage currently".
A company will be formed with all industry participants, a board will be set up and IRDAI will prescribe regulations for the platform, he said.
The company declared a dividend of Rs 4 per share.
Shares of LIC closed 5.86% higher at Rs 1,106.25 apiece on the BSE, before the results were announced, as compared with a 1% decline in the benchmark Sensex.
