Life Insurance Corporation of India (LIC), India’s largest insurer, anticipates a 2% to 3% increase in its new-business margin for the fiscal year 2025.
It is also working towards acquiring a majority stake in a health insurance company.
During a media briefing, LIC CEO Siddhartha Mohanty confirmed that discussions are ongoing regarding the acquisition, but he did not reveal further details about the potential transaction.
This development follows LIC’s earlier announcement in May about its intention to explore inorganic growth in the health insurance sector.
According to Reuters, LIC’s value of new business (VNB) – which estimates the profitability of new premiums – rose by 23.7% year-on-year for the quarter ending in June. The net VNB margin also saw a slight increase, reaching 13.9% compared to 13.7% in the same quarter of the previous year.
In the first quarter, LIC recorded a profit of 104.61 billion rupees, marking a 9.6% rise, driven largely by increased sales of non-participating policies and strong performance in its group insurance segment.
Additionally, LIC transferred 94.7 billion rupees (US$1.13 billion) from its non-participating fund to shareholders’ funds during the quarter, a significant rise from the 74 billion rupees transferred in the corresponding period last year.
Since 2022, the company has regularly transferred portions of the premium collected from non-participating policies into shareholders’ funds each quarter, a strategy that has supported the company’s profitability and improved its solvency ratio. The solvency ratio, which measures an insurer’s ability to meet long-term obligations, improved to 1.99 from 1.89 a year earlier.
In May, the company received the Securities and Exchange Board of India’s approval to achieve a 10% public shareholding until 2027.
LIC also reported a 30.9% year-on-year increase in total premium income from its group insurance business during the June quarter, according to its exchange filing. Group insurance, often provided by companies for their employees, has been a key growth area for LIC.
The insurer continues to focus on expanding the share of higher-margin non-participating policies in its overall portfolio. Overall, net premium income for the quarter rose nearly 16% to 1.14 trillion rupees.
