Home Business LIC’s Q4 results: Net profit rises 4.5% YoY to Rs 13,782 cr; announces Rs 6 per share dividend.

LIC’s Q4 results: Net profit rises 4.5% YoY to Rs 13,782 cr; announces Rs 6 per share dividend.

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LIC’s Q4 Results: In the same period last fiscal, the company’s net profit was Rs 13,191 crore. Total Premium Income for FY ending March 31, 2024, stood at Rs 4,75,070 crore, compared to Rs 4,74,005 crore in FY 2023. Total Individual Business Premium rose to Rs 3,03,768 crore from Rs 2,92,763 crore in the previous year.

India’s top life insurer, Life Insurance Corporation of India, posted a Q4 net profit of Rs 13,782 crore, up 4.5% from the previous year’s Rs 13,191 crore. The board announced a Rs 6 per share final dividend. LIC maintains its lead in Indian life insurance with a 58.87% market share in First Year Premium Income (FYPI) for the fiscal year ending March 31, 2024, as per company filings.

MUMBAI: India’s largest state-run life insurer, Life Insurance Corp. Of India (LIC), saw a slight decline in policy sales for FY24 compared to FY23 but still achieved a 12% increase in annual profit. LIC reported a net profit of ₹40,676 crore in FY24, up from ₹36,397 crore in FY23, driven by higher renewal premium income, improved investment returns, and a modest rise in value of new business (VNB).

LIC's Q4 results
Image Source: licindia.in

 The company declared a dividend of ₹6 per share for FY24. Despite selling 20.39 million policies in FY24, slightly fewer than the 20.43 million in FY23, LIC experienced a 5.48% y-o-y drop in total premium income from group businesses to ₹1.71 trillion in FY24. In the individual segment, LIC’s new business premium income declined 1.77% y-o-y to ₹57,716 crore in FY24.

 The net value of new business for FY24 grew by 4.66% to ₹9,583 crore, with the net VNB margin increasing by 60 bps to 16.8%. LIC officials noted a shift towards non-par products, anticipating an improvement in VNB margins. Despite challenges, LIC remains the dominant player in the life insurance market, though its market share decreased to 58.87% in FY24 from 62.58% in FY23.

“Moving forward, our aim is to enhance our market share in all segments,” stated Siddhartha Mohanty, LIC’s chairman.

During FY2024, LIC concentrated on altering its product mix and improving margins.

Mohanty mentioned LIC’s doubling of its non-par business share in the individual segment.

Nevertheless, participating businesses still represent a significant portion of LIC’s product range.

During a post-earnings call on Monday, Mohanty stated that in fiscal 2025, LIC will prioritize boosting its VNB margin and the percentage of non-participating policies.

LIC officials also noted an increase in the market share of large policies (premium above ₹5 lakh) in fiscal 2024.

In FY2024, LIC moved ₹29,518.75 crore from non-participating policyholders’ account to shareholders’ account, yet its solvency ratio remains above the regulatory threshold at 1.98, compared to 1.87 in FY2023.

In FY2024, LIC’s operating cash flow decreased to ₹26,121.65 crore from ₹54,518.51 crore in FY23, likely due to higher claim and benefit payments totaling ₹3.93 trillion, up from ₹3.5 trillion in FY23.

Mohanty stated that LIC paid ₹52,956 crore in bonuses to participating policyholders in FY2024.

However, by the end of FY2024, LIC saw a reduction in its cash and cash equivalents to ₹42,013.83 crore compared to ₹45,588.14 crore in FY23.

“We anticipate a return to focus on our top-line growth trajectory this year,” Mohanty remarked.

LIC’s embedded value surged by 24.9% to ₹7.27 trillion by FY24-end from ₹5.82 trillion in FY23.

Prior to the earnings announcement, LIC’s shares rose 0.58% to ₹1,035.80 on the BSE on Monday amidst stable equity markets.

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