LIC Reports 20% Profit Increase Amid Retail Sales Decline
LIC's net profit rose to ₹12,115 crore in Q2, driven by robust group insurance premiums despite a decline in retail sales.
NEW DELHI, Nov 6: Life Insurance Corporation of India (LIC) announced a 20% increase in net profit for the second quarter, reaching ₹12,115 crore, compared to ₹10,053 crore the previous year. This growth comes primarily from higher premium income, especially in group insurance.
Net premium income grew by 16.2%, totaling ₹1.47 lakh crore, with single premium income surging by 34.5% to ₹68,425 crore. The annualized premium equivalent also rose 5.72% to ₹30,696 crore. Expenses decreased slightly by 1.13% to ₹15,061.5 crore during this quarter.
The insurer’s value of new business (VNB) saw a significant jump of 33.95%, reaching ₹6,846 crore, while the VNB margin expanded by 470 basis points to 22.3%. Total assets under management grew by 4.16% to ₹59.61 lakh crore. LIC anticipates further improvement in its VNB margins due to a favorable product mix and growth in higher-margin segments.
R. Doraiswamy, Managing Director and CEO, said a newly launched pure-term insurance product received an enthusiastic response, stating, “In the last few days of September alone, we sold over 58,000 policies under the newly introduced plan.” The company plans to focus on pure-term protection products, non-participating savings products, and the annuity business moving forward.
While LIC’s overall results were positive, retail sales did not meet expectations. Analysts noted that rising costs led regulators to propose capping commissions and linking them to product complexity after earlier relaxed limits.
LIC also confirmed that its bancassurance network is expanding, with multiple banks joining its distribution network in recent quarters. This development follows the company’s anticipated sale of its stake in IDBI Bank to Fairfax Financial Holdings, which will allow the bank to continue distributing LIC’s insurance products.
Sources
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