Ahead of its initial public offering (IPO), Life Insurance Corporation of India (LIC) on Friday reported a net profit of Rs 234.91 crore for the December 2021 quarter, up from Rs 94.23 lakh in the year-ago period. The life insurer’s net profit for the nine months to December 2021 increased to Rs 1,671.57 crore from Rs 7.08 crore a year ago. In FY21, it reported a net profit of Rs 2,734.34 crore, an increase of 14% over the previous year.
First year premiums in the quarter under review grew 9.94% year-on-year to Rs 8,748.55 crore from Rs 7,957.37 crore. Single premiums, however, de-grew 5.5% Y-o-Y to Rs 32,190.15 crore.
Analysts at Motilal Oswal observed that private sector insurers commanded a market share of 63.4% in the individual annualised premium in February while LIC’s share stood at 36.5%.
Analysts at Macquarie Research have pointed out that LIC’s market share in overall premium as well as new business premium is more than 60%. In terms of APE, it is much lower at about 50%. “So, it has been losing market share in the individual business due to which APE market share is much lower,” they recently wrote.
The overall premium, as well as new business premium, is influenced by the group premium and single premium businesses, which form a significant proportion of LIC’s business, where it has closer to an 80%+ market share.
The insurer is the biggest asset manager in the country with an AUM (on a stand-alone basis), which is more than 3.3 times the total AUM for all life insurers. It depends on individual agents to source new business premiums for individual products – the network comprises approximately 1.35 million agents.