LIC Q2 Results Review - Profitability Surges; APE, VNB Trajectory On A Strong Footing: Motilal Oswal
The company reported a 27% YoY growth in net premium, led by a 53%/2% growth in the new/renewal business.
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Motilal Oswal Report
Life Insurance Corporation of India reported a strong financial performance in Q2 FY23, with a 48% YoY growth in annual premium equivalent to Rs 252 billion in H1 FY23.
LIC's value of new business grew 132% YoY to Rs 36.8 billion as VNB margin improved by 530 bps to 14.6% in H1FY23. VNB margin rose 160 bps QoQ to 15.2% in Q2 FY23. Shareholder profit after tax rose 10 times YoY to Rs 159 billion in Q2 FY23 due to the Rs 143 billion transfer from non-par to the shareholders’ account as it relates to accretion on available solvency margin.
The individual/group business constituted 53%/47% of APE in H1 FY23. Within the individual business, the share of PAR products remained stable ~92%.
In terms of new business premium, the share of PAR products was lower at 68%. Annuity/pension and unit linked insurance plans constituted the bulk of the residual at 24%/6%.
We expect the momentum to sustain led by incremental focus and the introduction of new products.
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