Life Insurance Corporation (LIC) on Tuesday reported a 38% year-on-year rise in standalone net profit for the fourth quarter of FY25 to Rs 19,012.79 crore, aided by lower commission payouts and reduced management expenses.
However, the country’s largest life insurer posted a 3% y-o-y decline in net premium income to Rs 1.48 lakh crore during Q4. The fall was primarily due to a 14% drop in group insurance premium, which stood at Rs 49,965 crore in the quarter, compared to Rs 58,245 crore a year ago.
In contrast, total individual premium (including new business and renewal) grew 4% to Rs 97,620 crore.
LIC MD & CEO Siddhartha Mohanty attributed the decline in premium income to the new surrender value guidelines implemented by the Insurance Regulatory and Development Authority of India (Irdai). “There was a change in product regulation starting from October 2024. So, Q3FY25 was challenging and it spilled over into Q4 as well,” Mohanty said during the company’s media earnings call.
He added that LIC’s agency force was adapting to the new rules, which impacted first-year premium collections. “However, from March 2025 onwards, we have started seeing good growth,” he said.
The revised surrender value norms, effective from October 1, 2024, require insurers to offer higher payouts to policyholders’ existing policies before maturity.
LIC’s profitability in the March quarter was further supported by a 33% decline in management expenses to Rs 16,495.08 crore. Net commission expenditure also fell to Rs 7,711.47 crore from Rs 8,245.71 crore in the same period last year.
For the full year, net interest income rose 2.75% to Rs 4.88 lakh crore. Of this, individual premium rose 5% to Rs 3.19 lakh crore, while group business premium fell 1.28% to Rs 1.69 lakh crore. Profit after tax for FY25 stood at Rs 48,151 crore, up from Rs 40,676 crore in the previous year.
On an annualised premium equivalent (APE) basis, total premium for FY25 was Rs 56,828 crore, with the individual business contributing 67.25% (Rs 38,218 crore) and the group business accounting for the remaining 32.75% (Rs 18,610 crore).
Mohanty said LIC’s proposed entry into the health insurance space through the acquisition of a controlling stake in a standalone health insurer is at an “advanced stage”. “The discussion is in the final stage. We will go to our board for approval. Within 2-3 months, some decision will be taken by the board,” he said, without naming the target.
The number of new policies sold fell 13% to 17.78 million in FY25 from 20.39 million in FY24. The management attributed this to an increase in the minimum sum assured on some of its key products following the implementation of the new surrender value norms. “That tapering effect has started and some kind of negative variations could be there till September,” the management said.
LIC retained its position as the market leader in terms of First Year Premium Income, with a 57.05% overall market share in the Indian life insurance sector. For the year ended March, the corporation held a 37.46% share in the individual business and 71.19% in the group business.
According to the management, LIC invested Rs 80,000 crore in corporate bonds in FY25. On bond forwards, the insurer said discussions are underway to finalise approvals and put in place the necessary logistics before making investments in the instrument.
The board of directors has recommended a final dividend of Rs 12 per share for FY25, subject to shareholder approval.
LIC shares closed flat at Rs 870.70 on the NSE on Tuesday.