Detailed Narrative
Life Insurance Corporation of India (LIC) reported a strong performance for the nine months ended December 31, 2024 (Q3 FY25). The company's Total Premium Income grew by 5.51% year-on-year to INR 3,40,563 Crore, with Individual New Business Premium Income increasing by 9.73% to INR 42,441 Crore. Total Individual Premium Income, including renewals, stood at INR 2,21,416 Crore, reflecting a 5.58% growth. Group Business also contributed positively, with total premium income rising by 5.39% to INR 1,19,147 Crore. Profit After Tax (PAT) saw an 8.27% increase, reaching INR 29,138 Crore, while Net Value of New Business (VNB) grew by 9.08% to INR 6,477 Crore, accompanied by a 50 basis point improvement in Net VNB Margin to 17.1%. Assets Under Management (AUM) demonstrated robust growth of 10.29% YoY, reaching INR 54,77,651 Crore. The company also successfully reduced its Overall Expense Ratio by 231 basis points to 12.97%.
A significant strategic shift was observed in the product mix, with the Non-Par share of Individual Annualized Premium Equivalent (APE) surging by 106.52% to 27.68% from 14.04% in the prior year. This shift, along with revisions in premium rates and minimum ticket sizes for certain products post-October 2024 regulations, was instrumental in protecting and improving margins despite softening bond yields. The Solvency Ratio improved to 2.02 from 1.93. The agency workforce expanded by 3.33% to 14,19,480 agents, contributing approximately 95% of New Business Premium. The Banca and Alternate Channels also showed strong growth in New Business Premium, increasing by 31.06% YoY.
Management highlighted ongoing digital transformation initiatives like DIVE and Jeevan Samarth, and the success of the Agent-assisted ANANDA app, which processed 9,72,504 policies, a 23.91% growth. New marketing initiatives, such as the Bima Sakhi Yojana, aimed at empowering women, have also seen significant traction with over 70,000 Bima Sakhis appointed. The company launched a comprehensive suite of 38 products, including 24 individual products and 8 group products, fully compliant with new IRDAI regulations.
During the Q&A session, management addressed concerns regarding a slight dip in persistency, attributing it to product mix changes and lower ticket sizes in some older products, which have since been revised. They confirmed the initiation of Forward Rate Agreement (FRA) for hedging interest rate risk within the current financial year. While acknowledging a temporary decline in APE due to product revisions, they expressed confidence in a quick recovery and continued growth trajectory. They also clarified that Embedded Value (EV) is disclosed on a half-yearly basis, not quarterly. The overall tone was cautiously optimistic, with management emphasizing resilience, adaptability, and a strong position to leverage industry growth through its brand, distribution network, and innovative products.