LIC reports record ₹48,151 crore profit in FY25, recommends ₹12 dividend

Life Insurance Corporation of India (LIC), the country’s largest insurer, posted its highest-ever annual profit of ₹48,151 crore for FY25, marking an 18.4% year-on-year jump, driven by growth in individual new business premiums and improved operating efficiency. The board has recommended a final dividend of ₹12 per share, underscoring the corporation’s robust performance in a year marked by regulatory transitions and changing product dynamics.

LIC’s total premium income rose to ₹4,88,148 crore in FY25, up from ₹4,75,070 crore in the previous fiscal. This includes ₹3,19,036 crore from individual business, which grew 5%, while group business premium saw a marginal dip to ₹1,69,112 crore. The individual new business premium rose 8.3% year-on-year to ₹62,495 crore, reflecting resilient demand despite a 12.8% decline in the number of policies sold.

For the quarter ended March 31, LIC’s total premium income fell 3.1% to about ₹1.48 lakh crore. However, its profit after tax for the period jumped 38.1% year-on-year to ₹19,012.79 crore, which was primarily attributed to lower employee costs. Its employee remuneration and welfare expenses for the reporting quarter were ₹5,928.5 crore, compared to about ₹13,750 crore a year earlier. 

Commenting on the performance, LIC chairperson Siddhartha Mohanty noted that the year was both exciting and challenging, marked by product redesigns following regulatory changes. “We have achieved several milestones, including crossing ₹10,000 crore in net Value of New Business (VNB) for the first time,” he said.

The corporation’s VNB stood at ₹10,011 crore in FY25, up 4.5% from ₹9,583 crore in FY24. The net VNB margin also improved 80 basis points year-on-year to 17.6%, helped by a sharp pivot toward high-margin Non-Participating (Non-Par) products. Non-Par Annualised Premium Equivalent (APE) surged over 50% to ₹10,581 crore, taking its share within the individual business to 27.69%, up from 18.32% in the previous year. Par products still accounted for 72.31% of individual APE.

LIC’s embedded value—a key metric used to estimate the insurer’s worth—rose 6.8% to ₹7,76,876 crore, while its assets under management (AUM) grew to ₹54.52 lakh crore, up 6.5% year-on-year. The solvency ratio improved to 2.11 from 1.98, reflecting better capital buffers.

Operational efficiency also saw meaningful improvement. LIC reduced its overall expense ratio by 315 basis points to 12.42%. Persistency ratios—a key indicator of policyholder retention—showed mixed trends. On a premium basis, the 13-month persistency declined to 74.84% from 77.66%, while the 61-month metric improved to 63.12% from 60.88%.

The insurer declared bonuses worth ₹56,190.24 crore to policyholders, up from ₹52,955.87 crore in FY24. LIC also made a mark with a Guinness World Record by selling over 5.88 lakh policies in a single day on January 20, 2025. The "Bima Sakhi Yojana", launched by the Prime Minister in December 2024, saw the appointment of nearly 1.5 lakh Bima Sakhis, who sold over 4.7 lakh policies and contributed ₹604.57 crore in new business premium.

While total APE (Annualised Premium Equivalent) was flat at ₹56,828 crore, LIC maintained its dominance in the Indian life insurance market with a 57.05% share in first-year premium income. It held 71.19% market share in group business and 37.46% in individual business as per IRDAI data.