National insurer Life Insurance Corporation on Thursday reported a full 20% year-on-year growth in net income at Rs12,076 crore in the September quarter, driven by a robust growth in premium income that printed in at over 16%.
Net premium income increased to Rs1,47,018 crore in the reporting quarter, up 16.2% YoY, taking the total income to Rs2,62,739 crore, compared to Rs2,39,614 crore a year ago. Total income growth was also supported by higher renewal premium, which grew to Rs68,375 crore from Rs64,996 crore.
However, the country’s largest life insurer saw its first-year premium slightly declining to Rs10,432 crore from Rs10,836 crore in the previous fiscal year. On the other hand, one-time premiums from new policies jumped 35% and renewal premium rose more than 5%.
Total asset under management (AUM) of the company rose 4.15% to `59.61 trillion.” The Q2 numbers show that impact of the successful implementation of our product and channel diversification strategy. The non-par APE share of individual business is up 34.03%, in line with our current strategy of maintaining levels of one third of individual APE from non-par products,” CEO R Doraiswamy told reporters at the earnings call on Thursday.
On the Irdai proposal to cap agency commission, he said, “LIC is very optimistic about the positive impact of the proposed commission regulation changes. We believe that most of these changes are in the best interest of customers and will lead to further accelerated growth of the life insurance industry.”
He further said bancassurance and alternate sales channels share in individual premium is now 7.53% compared to 7.12% in the similar period last year, demonstrating a growth of 21.44%. “While we have seen the value of new business (VNB) increase by 33.95% to Rs 6,846 crore, the VNB margin has also expanded by 470 bps to 22.3%,” he said, adding single premium income recorded strong growth of about 35% from new policies.
While individual renewal premium rose 4.7% to Rs 1,27,950 crore, total individual total premium income rose 6.1% to Rs 1,60,675 crore and total group business premium jumped 19.62% to Rs 1,13,594 crore, taking the total premium income to Rs 2,74,269 crore, up 11.64%. The company sold 72,60,573 new individual policies during the quarter, up 2.25% from 70,97,094 in the year-ago period.
Value of new business grew 33.95% from Rs 5,111 crore to Rs 6,846 crore and the VNB margin grew from 17.6% to 22.3%, an increase of 470 bps. Overall expense ratio declined by 87 bps to 11.28 from 10.41 while the key solvency ratio at 2.35 from 2.13.
