LIC Q3 Results Review – APE Growth Moderates With Modest New Business Margin: Motilal Oswal


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Life Insurance Corporation of India reported a profit after tax of Rs 63.3 billion in Q3 FY23, up 27 times YoY. This is a result of the transfer of Rs 56.7 billion from the non-par segment to shareholders’ accounts (related to accretion on available solvency margin). For 9MFY23, profit after tax grew 13.7 times YoY to Rs 229.7 billion.

LIC’s annual premium equivalent came in at Rs 123.2 billion in Q3 FY23 (down 18% QoQ; Rs 375.5 billion in 9MFY23). Value of new business declined 21% YoY to Rs 18.0 billion as VNB margin moderated by 60 basis points QoQ to 14.6% in Q3 FY23. For 9MFY23, VNB margin stood stable at 14.6% with VNB of Rs 54.8 billion.

The Individual/group business constituted 62%/38% of APE, respectively, in 9MFY23. Within the Individual business, the share of PAR products remained stable at ~91%. In terms of new business profit, the share of PAR products was lower at 66%.

Annuity/Pension and unit linked insurance plans constituted the bulk of the residual with 24% and 7%, respectively. We expect the momentum to sustain in the medium term, led by incremental focus and introduction of new products.

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