LIC Rallies 4% As Strong Group Business, Margin Expansion Lift Earnings 

Mumbai, May 22: Shares of Life Insurance Corporation of India jumped as much as 4% on Friday after the country’s largest insurer reported a strong rise in quarterly profit, driven by robust growth in its group insurance business and improving profitability metrics.

Life Insurance Corporation was up 2.2% at Rs 818as of writing as investors cheered the company’s stronger margins, premium growth and healthier product mix.

LIC reported a 23% year-on-year increase in net profit for the March quarter at Rs 23,420 crore, compared with Rs 19,013 crore a year earlier. Net premium income rose 11.5% to Rs 1.65 lakh crore during the quarter, reflecting steady demand across segments.

Group Business Drives Growth

The insurer’s group business emerged as the biggest contributor to growth during the quarter.

Annualised premium equivalent (APE) sales from the segment surged 37%.

LIC also benefited from improved demand conditions following the government’s earlier decision to remove the 18% tax on individual life insurance products. Source: NSE

Margins Improve Sharply

Investor sentiment was also lifted by a strong improvement in LIC’s profitability indicators.

The company highlighted that growth in value of new business (VNB), which measures expected future profit from new policies sold, was 41% during the year.

VNB margin improved to 21.2% from 17.6% a year earlier, largely due to LIC’s growing focus on high-margin non-participating products, which offer insurers better earnings visibility compared with traditional participating policies.

The company’s solvency ratio — a measure of financial strength and ability to meet long-term obligations — also improved to 2.35 from 2.11 a year ago.

Tax Cuts Aid Insurance Demand

LIC has additionally benefited from improved demand conditions following the government’s earlier decision to remove the 18% tax on individual life insurance products, which made policies more affordable and boosted industry-wide premium collections.

The insurer also announced a dividend of Rs 10 per share alongside its earnings, further supporting investor sentiment. Moreover, the company had recently announced 1:1 bonus issue aimed at rewarding shareholders.

Brokerages remained optimistic after the results, with analysts highlighting LIC’s improving product mix, stronger margins and sustained growth in group business as key positives for the stock going forward.

Source:

• https://www.nseindia.com/get-quote/equity/LICI/Life-Insurance-Corporation-Of-India