LIC Q1 FY25 results: Net profit increases 9.6% to Rs 10,461 crore

State-owned Life Insurance Corporation of India (LIC) on Thursday reported a 9.61 per cent year-on-year (Y-o-Y) rise in its net profit to Rs 10,461 crore in the quarter ending June 2024 (Q1FY25) on the back of healthy growth in group business premiums.

The insurance behemoth reported a premium income of Rs 1.13 trillion in Q1FY25, up 15.66 per cent Y-o-Y compared to the corresponding period a year ago, with individual premiums growing by 7.04 per cent Y-o-Y to Rs 67,192 crore, and group premiums growing by 30.87 per cent Y-o-Y to Rs 46,578 crore.

Its value of new business (VNB) premium stood at Rs 1,610 crore in Q1FY25, up 23.66 per cent Y-o-Y from the year ago period, and its VNB margin – a measure of profitability of life insurance companies – stood at 13.90 per cent. LIC’s management said the margins will improve further going forward, and they would hit a VNB margin of around 20 per cent in the next 2-3 years.

 

LIC has been increasing the share of non-par products within individual segments over the years. On an annualised premium equivalent (APE) basis, within individual business, LIC’s non-par product has increased to 23.94 per cent in Q1FY25 compared to 10.22 per cent in the corresponding period a year ago.

“LIC is progressing on its stated objective of gaining market share after having focused, during the last year, on consolidating changes in product mix, channel mix and margin improvement,” said Siddhartha Mohanty, MD&CEO, LIC.

LIC’s APE has grown by 21.3 per cent Y-o-Y to Rs 11,560 crore in Q1FY25.

LIC has booked a profit of Rs 15,500 crore in Q1FY25 from its equity investments. The state-owned insurer has invested around Rs 38,800 crore in the equity markets in Q1 and plans to make at least around the same amount it had invested in FY23 – Rs 1.32 trillion – in the equity market in FY25, if not more. LIC’s market value of equity investment stands at Rs 15 trillion, the management said.

Its net income from investments increased 6.35 per cent Y-o-Y to Rs 96,534.8 crore in Q1FY25. And, its Assets Under Management (AUM) stood at Rs 53.59 trillion, up 16.22 per cent Y-o-Y from the year ago period. LIC’s yield on investments on policyholders’ funds, excluding unrealised gains, was 8.54 per cent for Q1FY25.