Key Points
- LIC’s Q2FY25 standalone net profit fell 4% to ₹7,621 crore.
- Net premium income grew 12% year-on-year, reaching ₹1,19,901 crore.
- Investment income increased by 16%, totaling ₹1,08,972 crore.
- Transfer of funds to policyholders’ account surged to ₹1,058 crore.
- LIC’s market share rose to 61.07%, up from 58.50% last year.
- LIC plans to enter the health insurance market by the end of FY25.
Looma News
Life Insurance Corporation of India (LIC) reported a nearly 4% drop in its second-quarter standalone net profit for FY25. The profit stood at ₹7,621 crore, compared to ₹7,925 crore in the same quarter last year. The decline was due to higher expenses, including benefits paid, changes in actuarial liability, and a large transfer of funds to policyholders’ accounts.
Despite the drop in profit, LIC saw a strong 12% growth in net premium income, which reached ₹1,19,901 crore, up from ₹1,07,397 crore in the same period last year. Income from investments also grew by 16%, reaching ₹1,08,972 crore, compared to ₹93,942 crore in the previous year.
On the expense side, benefits paid, including maturity benefits and death claims, rose by about 12% to ₹1,19,901 crore. The change in actuarial liability went up by 16%, totaling ₹1,08,246 crore. Net commissions paid also increased by 8%, reaching ₹6,542 crore. The transfer of funds to policyholders’ accounts surged dramatically to ₹1,058 crore, from just ₹0.33 crore last year.
LIC’s market share improved to 61.07% in the first half of the year, up from 58.50% last year. CEO & MD Siddhartha Mohanty expressed optimism for the second half of the year, pointing to strong growth in the value of new business (VNB) despite regulatory changes. He also mentioned that the insurer had adjusted its products and margins in response to market conditions.
Investment Portfolio and Future Plans
LIC’s investment portfolio grew by about 17% year-on-year, reaching ₹52,59,590 crore. Of this, ₹37 lakh crore was invested in bonds, including government securities, state development loans, and corporate bonds, while the rest was allocated to equities.
On the health insurance front, Mohanty confirmed that LIC is working on launching a health insurance business. The company plans to acquire a stake in a standalone health insurance company, with the deal expected to take place within the current financial year. The board will decide how much of a stake LIC will hold, with no limits on the percentage a life insurer can own in a standalone health insurance company.
