Life Insurance Corporation of India (LIC) is planning to enter the health insurance market and is exploring potential acquisitions to facilitate this expansion. This initiative follows a proposal to introduce composite insurance companies, which would allow life insurers to offer hospitalisation and indemnity coverage, pending an amendment to the Insurance Act.
Record-breaking dividend payout
LIC has announced a final dividend of Rs 6 per share for the fiscal year 2023–24, marking the highest dividend payout in its history and doubling last year’s Rs 3 per share. The record date for the payout is set for July 19.
Market context and regulatory push
India’s insurance market remains significantly under-penetrated, with fewer than 23 million health insurance policies covering 550 million individuals by the end of the 2022–23 fiscal year. The government and regulatory authorities are keen to expand health coverage, and LIC's entry into the sector is expected to support this effort.
Financial performance highlights
LIC reported a marginal 2% increase in net profit, reaching Rs 13,763 crore in the fourth quarter ending March 2024, up from Rs 13,428 crore in the same period the previous year. Total income rose to Rs 2,50,923 crore from Rs 2,00,185 crore year-on-year. First-year premium income improved to Rs 13,810 crore, while renewal premium income increased to Rs 77,368 crore.
Annual performance and dividend declaration
For the fiscal year ending March 2024, LIC's profit stood at Rs 40,676 crore, up from Rs 36,397 crore in the previous year. Total premium income was Rs 4,75,070 crore. The board recommended a final dividend of Rs 6 per share and an interim dividend of Rs 4, totalling Rs 10 per share for the year.
Market leadership and plans
LIC continues to lead the Indian life insurance market with a 58.87% market share by First Year Premium Income (FYPI). Chairman Siddhartha Mohanty emphasised the corporation's focus on strategic interventions to maximize market share and create value for stakeholders. LIC aims for double-digit topline growth in the current financial year, driven by new product launches and digital transformation initiatives.
Value of new business and financial metrics
The Value of New Business (VNB) for FY24 was Rs 9,583 crore, a 4.66% increase from the previous year. The net VNB margin rose to 16.80%, up from 16.20%. The solvency ratio improved to 1.98, and Assets Under Management (AUM) increased to Rs 51,21,887 crore, a 16.48% year-on-year growth. The bonus allocated to participating policyholders was Rs 52,955.87 crore for FY24, compared to Rs 49,439.56 crore the previous year.
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