LIC Net Profit Rises 20 Percent on Strong Premium Growth and Margins

Life Insurance Corporation of India posted a 20 percent year-on-year increase in net profit to ₹12,115 crore for the quarter ending in September, supported by higher business margins and premium growth. Net premium income grew 16.2 percent to reach ₹1.47 lakh crore. Single premium income led this growth with a 34.5 percent jump to ₹68,425 crore. Annualised premium equivalent rose 5.72 percent to ₹30,696 crore, while total expenses dropped 1.13 percent to ₹15,061.5 crore.

Growth Drivers

The insurer's value of new business jumped 33.95 percent to ₹6,846 crore, leading the margin to expand by 470 basis points to 22.3 percent. Assets under management grew 4.16 percent to ₹59.61 lakh crore. Non-participating savings products grew 35 percent and now account for 13 percent of the business mix compared to 10.7 percent previously. Term assurance business expanded by 87 percent, and positive movements in the risk-free rate also helped improve margins.

Future Plans

Managing Director and Chief Executive Officer R Doraiswamy stated that a new pure-term insurance product launched in September received a strong response, with over 58,000 policies sold in the final days of the month alone. The company plans to focus heavily on pure-term protection, non-par savings, and the annuity business moving forward. Regarding the proposed sale of IDBI Bank to Fairfax Financial Holdings, LIC noted that the bank can continue distributing its policies under an open-architecture model, while the insurer also expands its bancassurance network.

Context

Life insurers track metrics like the value of new business and margins to gauge the profitability of new policies sold rather than just total revenue. A growing share of non-participating and term products typically helps insurers protect their margins against fluctuating interest rates. Such financial updates help investors track large institutional portfolio movements and overall consumer demand patterns in the financial sector.