LIC Q1 profit rises 23% to ₹13,492 crore; VNB jumps 61%, margin expands to 22.9%
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Life Insurance Corporation of India (LIC) on Thursday reported a 22.8% year-on-year rise in net profit for the June quarter, driven by strong growth in high-margin business that lifted its value of new business (VNB) by more than 61%.
The state-run insurer posted a profit after tax (PAT) of ₹13,492 crore for the first quarter of FY27, compared with ₹10,986 crore a year earlier. Total premium income rose 6.75% to ₹1,27,250 crore, while annualised premium equivalent (APE) increased 8.22% to ₹13,692 crore.
The results come a day after the government's record-breaking offer for sale (OFS) in LIC concluded with strong investor demand. The two-day issue was oversubscribed, prompting the government to exercise the greenshoe option and raise about ₹31,552 crore through the sale of a 6.5% stake, taking LIC's public shareholding to 10%.
VNB margin sees sharp expansion
LIC's VNB, a key profitability metric for life insurers, rose 61.32% to ₹3,136 crore from ₹1,944 crore a year ago. Consequently, the net VNB margin expanded 750 basis points to 22.9%, from 15.4% in the year-ago quarter.
The improvement suggests a richer product mix and higher contribution from non-participating products despite relatively moderate growth in premium volumes.
Individual new business premium increased 14.48% year-on-year to ₹14,351 crore, while non-par APE within the individual business grew 14.24% to ₹2,447 crore. Group business APE rose 10.2% to ₹6,160 crore, with the non-par share in individual business improving to 32.49% from 30.34% a year earlier.
Balance sheet remains strong
LIC also reported an improvement in its solvency ratio to 2.42, compared with 2.17 a year ago, remaining comfortably above the regulatory requirement. Assets under management (AUM) increased 4.1% year-on-year to ₹59.39 lakh crore, while the overall expense ratio edged up to 10.63% from 10.47%.
Announcing the quarterly performance, LIC said, "Profit After Tax (PAT) increased by 22.81% to ₹13,492 crore." The insurer also highlighted that "Value of New Business (VNB) increased by 61.32% to ₹3,136 crore," while "VNB Margin (Net) increased by 750 bps to 22.9%."
The insurer further said overall APE stood at ₹13,692 crore, registering an 8.22% increase over the corresponding quarter last year.
The quarterly earnings are likely to reassure investors after the government's successful OFS, with the sharp expansion in VNB margin indicating continued improvement in the quality and profitability of LIC's new business franchise.
Shares of LIC ended Thursday's session 1.39% lower at ₹387.55 apiece on the NSE. The stock has declined more than 13% over the past year, underperforming the Nifty 500 index, which has gained nearly 5% during the same period.