Driven by increased margins and good performance in non-participating products, Life Insurance Corporation of India (LIC), the nation’s second-largest firm by market value, announced a 38% increase in net profit for the March quarter, hitting ₹19,101.3 crore. moneycontrol.com
Last year, LIC reported a ₹13,762 crore profit in the same quarter. The Board has suggested a final dividend of ₹12 per share for FY25, representing one of the biggest domestic institutional investors in traded securities.
The expenditure ratio decreased by 315 basis points, from 15.57% in FY24 to 12.42% in FY25, as wage costs decreased—due to allowances made for wage revisions last year—despite analysts’ projections of a reduction in earnings.
Siddhartha Mohanty, MD & CEO of LIC, stated, “We had to redesign and relaunch products to comply with new regulatory changes after a strong performance in the first half of the year.”
The overall annualized premium equivalent (APE), which was ₹56,828 crore in FY25, slowed down as a result of a change in product regulations in Q3 and its spillover into Q4, as agents had some time to get used to the new standards.
The fiscal year that concluded on March 31, 2025:
APE for individuals fell by 0.56% to ₹38,433 crore.
Non-participating products made up 27.69% of the individual company, whereas participating products made up 72.3%.
During the post-earnings call, management stated that the third quarter was very difficult and that this had an effect into the fourth quarter. Toward the conclusion of Q4, though, we did quite well. Our agents’ adaptation to the new rules greatly lessened the negative effects of Q3.
Effective October 1, 2024, the Insurance Regulatory and Development Authority of India (IRDAI) enacted new surrender regulations, mandating that insurers refile specific products in order to comply with the updated standards.
We drastically redesigned our goods when the new rules were implemented, which also resulted in adjustments to the size of tickets and premium tiers,” management stated. “Improving persistence is now a top priority.”
From ₹9,583 crore in FY24 to ₹10,011 crore in FY25, the Value of New Business (VNB) increased by 4.47%. Year-over-year, the net VNB margin increased from 16.8% to 17.6%, an improvement of 80 basis points.
According to March 31, 2025:
LIC’s market share in the individual category was 37.46%.
It continued to hold a commanding 71.19% market share in group insurance.
Mohanty made it clear that LIC’s main objective is not market share. “We have continuously shown year after year since our listing that we are focused on profitable growth,” he stated.
The solvency ratio increased from 1.98 to 2.11 over the previous year. Additionally, assets under management (AUM) increased to ₹54.52 lakh crore from ₹51.21 lakh crore the previous year.
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LIC’s performance last year seems impressive, especially with the ₹13,762 crore profit and the final dividend of ₹12 per share. It’s interesting to see how the expenditure ratio decreased significantly, likely due to the wage cost adjustments. The challenges in Q3 and Q4 due to regulatory changes must have been tough, but it’s good to hear that the agents adapted well, minimizing the negative impact. The increase in the Value of New Business (VNB) by 4.47% is a positive sign, showing growth despite the hurdles. I wonder how the new surrender regulations by IRDAI will affect LIC’s operations in the long term. Do you think the focus on improving persistence will lead to even better results in the coming years?
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Subject: Re: LIC’s Strong Performance
Dear Sir / Madam,
Thank you for sharing your thoughts. I agree — LIC’s performance last year has been quite impressive. A profit of ₹13,762 crore and the final dividend of ₹12 per share clearly reflect strong financial management and sustained growth.
It’s encouraging to see such robust results, especially in a challenging economic environment. LIC’s ability to deliver consistent value to its stakeholders is a positive sign for both policyholders and investors.
Looking forward to continued updates on LIC’s journey and future performance.
Best regards,
Dinesh Shah,
man behind Money Pistol.
Email: moneypistol9@gmail.com.
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