The Government of India, the largest shareholder in Life Insurance Corporation (LIC) of India, is set to receive a dividend of ₹3,662 crore. This follows LIC’s declaration of an interim dividend of ₹6 per share on May 27, 2024. The government holds a 96.5% stake in the insurer, translating to 6,10,36,22,781 shares.
Financial Performance Highlights Of LIC
LIC reported a net profit of ₹13,782 crore for the quarter ending March 31, 2024, reflecting a 4.5% increase compared to ₹13,191 crore in the same period last year. This robust performance underscores the insurer’s resilience and growth trajectory amid evolving market conditions.
The interim dividend of ₹6 per share, declared on May 27, results in a significant payout to the government. The total dividend per share for the year is now ₹10, bringing the total dividend payout to ₹6,104 crore for FY24.
The asset quality of LIC improved markedly, with the gross non-performing asset (GNPA) ratio reducing to 2.01% from 2.56% the previous year. This improvement in GNPA is indicative of LIC’s strong management practices and financial health.
LIC’s value of new business (VNB) saw a 4.66% increase, reaching ₹9,583 crore, with the VNB margin expanding by 60 basis points to 16.8%. The non-par Annualized Premium Equivalent (APE) share within individual businesses grew by 9.43% to 18.32%, with the non-par APE increasing by 105%, from ₹3,436 crore in FY23 to ₹7,041 crore in FY24.
Total Premium Income for the year ended March 31, 2024, was ₹4,75,070 crore, slightly up from ₹4,74,005 crore in the previous year. The individual business premium increased to ₹3,03,768 crore from ₹2,92,763 crore. However, LIC sold 2.03 crore policies in the individual segment, slightly down from 2.04 crore policies in FY23.
LIC’s assets under management (AUM) increased by 16.48% year-on-year, reaching ₹51.21 lakh crore as of March 2024, up from ₹43.97 lakh crore as of March 31, 2023. The solvency ratio also improved to 1.98%, compared to 1.87% last year, reaffirming the insurer’s robust financial position.
LIC continues to dominate the Indian life insurance market with an overall market share of 58.87%. For the financial year 2024, it commanded a market share of 38.4% in the individual business segment and 72.3% in the group business category.
Reflecting on the broader market dynamics, LIC’s shares rallied by 71.5% during fiscal 2024, contributing ₹2.4 lakh crore to its market capitalization. This makes LIC the second-largest PSU after the State Bank of India, with a market valuation of ₹6.6 lakh crore.
LIC Chairperson, Siddhartha Mohanty, commented on the strategic focus and future outlook of the company: “During the last year, we have focused on directional changes in our product mix and enhancing margins in the business. We have more than doubled our share of non-par business within our individual business. Now we intend to focus our strategic interventions to maximize our market share across categories.”
“At the same time, our sharp focus on various parameters which create superior value for all stakeholders shall continue, as demonstrated. There are key initiatives related to distribution channel and digital transformation underway. We are confident that our employees, agents, and our channel partners are fully committed to achieving these objectives. We look forward to this current year as the one in which our topline growth trajectory will be back in focus”, He said.
LIC’s strong financial performance and strategic initiatives underscore its pivotal role in the Indian insurance market and its commitment to delivering value to its shareholders, including the Government of India. The substantial dividend payout highlights LIC’s financial stability and its contribution to the broader economy.
