LIC Q4FY25 results: Net profit up 38% at ₹19,012 crore on lower costs

Insurer earned Rs 73,000 crore profit from equity markets in FY25

State-owned Life Insurance Corporation’s (LIC’s) net profit for the January-March quarter of 2024-25 (Q4FY25) grew 38 per cent year-on-year (Y-o-Y) to Rs 19,012 crore, supported by a steep decline in expenses for the company.

 

The expense of management (EoM) of the insurer dropped around 33.24 per cent from the year-ago period to Rs 16,495.08 crore. The net commission slipped 6.5 per cent Y-o-Y to Rs 7,711.5 crore, while employees’ remuneration and welfare expenses declined nearly 57 per cent Y-o-Y to Rs 5,928.48 crore.

 

In Q4, the annualised premium equivalent (APE) dropped nearly 11 per cent to Rs 18,853 crore from Rs 21,180 crore in the year-ago period, while the value of new business premium (VNB) slipped 3.04 per cent Y-o-Y to Rs 3,534 crore.

 

 

However, VNB margin measure of profitability of life insurance companies  of the insurance company rose to 18.75 per cent in the quarter from 17.21 per cent in the year-ago period.

 

Net income from investments increased 10.31 per cent Y-o-Y to Rs 93,132.67 crore in Q4FY25. The investment income was up 7.9 per cent Y-o-Y at Rs 3.92 trillion in FY25.

 

During the post earnings media call, LIC’s management said that the insurer had invested Rs 1.85 trillion in equity markets in FY25, 41 per cent Y-o-Y higher than FY24 and has registered a profit of Rs 73, 000 crore from the equity market, up 19 per cent Y-o-Y.

 

Additionally, the insurance behemoth has invested Rs 80,000 crore in corporate bonds in FY25, 30 per cent higher than last year. LIC is one of the largest investors in India’s debt capital market.

 

In FY25, the insurer’s net profit stood at Rs 48,151 crore as compared to Rs 40,676 crore in FY24. The assets under management (AUM) of the insurance major for the year stood at Rs 54.52 trillion, up 6.45 per cent from Rs 51.23 trillion a year ago.

 

The yield on investments on policyholders’ funds, excluding unrealised gains, was 7.92 per cent for Q4.

 

In Q4, LIC’s persistency ratios on a premium basis for the 13th and 61st month were 68.62 per cent and 54.54 per cent, respectively. In the preceding quarter, LIC’s persistency ratios on a premium basis for the 13th and 61st month were 68.61 per cent and 59.69 per cent, respectively.

 

“LIC has taken a lot of steps to improve the persistency, the results of which will be seen in the next year’s 13th month persistency. Also, after the coming in of new product regulations, there has also been major revamp in our product suite and the ticket size and premiums have changed and so there is focus given on improving persistency,” LIC’s management said in post earnings media call.

 

The expense of management ratio of the company stood at 11.15 per cent as compared to 16.20 per cent in Q4FY24. 

 

The solvency ratio of the company was at 211 per cent as against 198 per cent last year.

 

LIC’s board recommended a final dividend of Rs 12 per share for the financial year 2024-25, subject to the approval of shareholders. 

 

The amount of bonus allocated to policyholders is Rs 56,190.24 crore for FY25 as against Rs 52,955.87 crore for FY24.

 

In terms of smarket share measured by First Year Premium Income (FYPI), LIC continues to be the market leader by market share in the Indian life insurance business with overall market share of 57.05 per cent. 

 

For the year ended March 31, 2025, LIC had a market share of 37.46 per cent in individual business and 71.19 per cent in group business.