Amid falling market share, Life Insurance Corporation (LIC) on Thursday said more focus will be on “profitable” market share. Measured by first year premium income, LIC’s market share fell 67 basis points to 62.58% for FY23 from 63.25% for FY22, according to data provided by insurance regulator Irdai. The market share of the insurance behemoth was 66.24% during FY19. “When you say market share, my understanding is profitable market share. We will grow that,” said LIC chairman Siddhartha Mohanty, at a conference call with analysts and investors, a day after the company declared its fourth quarter results. Mohanty, however, hastened to add that LIC would not ignore the conventional way that market share is defined.
LIC on Wednesday reported an over five-fold year-on-year jump in its net profits to Rs 13,427.81 crore on a standalone basis for Q4FY23 as it transferred Rs 7,229.15 crore from non-participating policyholders’ accounts to shareholder’s accounts.Its market share was 40.58% in individual business and 76.65% in group business for the year ending March 31, 2023. On a comparable basis, for the year ended March 31, 2022, the respective market share for individual and group business were 43.77% and 76.16%, respectively. On the back of heightened competition from the private sector life insurers, LIC modified as many as eight products, in terms of feature and pricing, last fiscal to improve margins.
Mohanty said value of new business (VNB) margin will “definitely” grow this fiscal. It increased by 110 bps to 16.2% for FY23. The Indian Embedded Value (IEV) of the company was determined as Rs 5,82,243 crore as on March 31, 2023 as compared to `5,41,492 crore on March 31, 2022 and Rs 5,44,291 crore in September 30,2022. “The key highlight was 7.5% y-o-y growth in EV (embedded value) on the back of a 20% VNB growth, higher rate of unwind due to increase in risk-free rate and positive changes in operating assumptions due to increase in persistency experience. MTM losses due to market movements and interest rate increase negatively affected the EV by ~Rs172 billion,” Macquarie Capital said in a note on LIC’s performance for FY23.
On investment in Adani Group Mohanty said its investment policy is in place and a single stock movement does not affect the policy. “We do not go by a single stock. We see the total portfolio growth in our basket, what is the fund size, total investment portfolio and what is now at the end of the year. If that grows and we give decent return to all our investors and policyholders, there should not be any concern,” Mohanty told ET Now when asked about Adani Group stocks. LIC’s investments in Adani group of companies rose to Rs 44,695 crore on May 24 as the stock prices continued to be on a recovery path. The recent rally in the Adani group stocks recouped most of the losses for the conglomerate, helping LIC.