State-owned Life Insurance Corporation (LIC) has reported a 17% increase in net profit to ₹11,056.5 crore for the third quarter of fiscal year 2025, primarily due to significant expense reductions. The insurer’s expenses decreased by 20.76% to ₹14,415.80 crore, with employee-related expenses dropping nearly 30%. This improvement in management expenses ratio from 15.5% to 13.47% was a significant factor in the profit increase.
However, LIC faced challenges in new business metrics, with the value of new business (VNB) premium falling by 26.87% to ₹1,926 crore and the annualized premium equivalent (APE) decreasing by 24% to ₹9,950 crore. In response to recent regulatory changes, LIC made strategic adaptations such as revising product pricing, increasing policy ticket sizes, and realigning commission structures without implementing clawbacks. The 13th-month persistency ratio also saw a slight decline to 68.6% from 70.89%.
Despite these challenges, LIC maintained its market leadership with a 57.42% market share in first-year premium income. The company’s assets under management grew by 10.3% to ₹54.77 trillion as of December 31, 2024. Managing Director Siddhartha Mohanty emphasized the company’s focus on adapting product and channel mix to meet customer needs in a dynamic environment. Additionally, LIC is exploring stake acquisition in a standalone health insurance company, but no finalization is expected in the current financial year.
For the nine months of FY25, LIC reported an 8.27% increase in profit after tax (PAT) to ₹29,138 crore. Total premium income grew by 5.51% to ₹3,40,563 crore during this period, although the number of individual policies sold declined by 6.73% to 1.17 crore policies.
Individual policy sales saw a 6.73% year-on-year dip, which LIC officials attributed to the transition period required for agents to adapt to new product regulations and changes. The company’s market share in first-year premium income stood at 57.42% for the nine-month period, slightly lower than the previous year. LIC also made progress in its non-par business strategy, with individual non-par annualized premium equivalent (APE) more than doubling to ₹6,813 crore.
The Value of New Business (VNB) grew by 9.08% to ₹6,477 crore, with VNB margin improving by 50 basis points to 17.1%. LIC’s expense ratio decreased by 231 basis points to 12.97%. Mohanty highlighted the company’s digital transformation initiatives and the success of the Bima Sakhi Yojana, which has registered over 1.25 lakh women and appointed more than 70,000 as insurance agents.
LIC’s assets under management (AUM) increased by 10.29% to ₹54,77,651 crore, with the solvency ratio improving to 2.02 from 1.93 a year ago. The company reported an 8.82% yield on investments on policyholders’ funds, excluding unrealized gains.
Overall, despite some challenges, LIC remains a strong player in the insurance market, continuously adapting to meet the evolving needs of its customers and exploring new opportunities for growth and expansion.
