Life Insurance Corp. Of India · NSE:LICI
Life Insurance Corp. Of India — Life Insurance Corporation of India — H1 FY2023 Earnings Presentation
71 slides from Life Insurance Corp. Of India's earnings presentation, Nov 13, 2022
Slide 1: Stock exchange intimation letter
Ref. No.: LIC/SE/2022-23/108 Date: November 13th, 2022 P P To, The Manager The Manager Listing Department Listing Department BSE Limited The National Stock Exchange of IndiaLtd. th Phiroze Jeejeebhoy Tower Exchange Plaza, 5 Floor, Plot C/1, P P Dalal Street G Block, Bandra Kurla Complex Mumbai-40000
Slide 2: Performance Updates H1: FY23
Performance Updates H1: FY23
Slide 3: Agenda
Agenda I - INTRODUCTION TO LIC II - BUSINESS AND FINANCIAL UPDATES H1FY23 III - ACTUARIAL UPDATES IV - MARKETING AND DISTRIBUTION STRENGTHS V - ACHIEVING OPERATIONAL EFFICIENCY VI – KEY FOCUS AREA APPENDIX
Slide 4: Introduction to LIC
INTRODUCTION TO LIC agd4gddddanad gag
Slide 5: Largest life insurer in India with a long legacy and trust
Largest life insurer in India with a long legacy and trust built over the years 2nd most valuable brand in India1 Top-ranked Indian Firm on latest Fortune Global 500 list – Ranked 98th 10th most valuable insurance brand globally in 20212 3rd strongest insurance brand globally2 US$ 8,655 mn brand val
Slide 6: Our products designed to suit customer life cycle
Our products designed to suit customer life cycle Participating Products Non-participating Products Product list indicative and not exhaustive. 5
Slide 7: Progress on various initiatives – H1 FY23
Progress on various initiatives – H1 FY23 Modification of Focus on Products for Increase in Non New Products Banca and increasing Par Business on Digital Initiatives Launch Alternate persistency APE basis Channel Individual business 800000 ANANDA share of Non Par Consistent 600000 3,14,955 moved to
Slide 8: Cross cyclical and comprehensive life insurance solutions
Cross cyclical and comprehensive life insurance solutions Comprehensive Product Portfolio 16 Participating products 19 Non-Participating Products (Including three Annuity Products) 11 Group products (incl. one credit life and one annuity product)¹ 8 Riders LIC’s Bima Ratna, LIC’s Dhan Sanchay, LIC’s
Slide 9: New products launched in FY23
New products launched in FY23 Name of Products LIC’s Bima Ratna LIC’s Dhan Sanchay LIC’s Pension Plus Introduction date 27.05.2022 14.06.2022 05.09.2022 Par/Non Par Non-Par (Banca) Non-Par Non Par Product Categories Money Back Endowment Pension Features of product Non linked, individual, Non linked,
Slide 10: Business and Financial Updates H1FY23
II BUSINESS AND FINANCIAL UPDATES H1FY23
Slide 11: Highlights of Q2 FY23
Highlights of Q2 FY23 Key Performance Drivers INR in Crore Financial Performance (INR in crore) 60000 Particulars June 30, 2022 Sept 30, 2022 Growth 50390 50000 Total Premium Income 98,352 1,32,104 34.32% 42170 40000 Total Renewal Premium 50,258 56,156 11.74% 30000 25228 Expenses of Management Ratio
Slide 12: Business performance parameters
Business performance parameters INR in Crore H1-FY 23 INR 2,30,456 Cr H1-FY 23 68.25% Market Share in 3.76% Total Premium Income +23.87% H1-FY 22 INR 1,86,053 Cr Premium¹ H1-FY 22 64.49 % (Absolute) H1-FY 23 INR 24,535 Cr H1-FY 23 INR 1,02,718 Cr Individual New Business Total Group Business +11.71%
Slide 13: Business performance parameters
Business performance parameters INR in Crore H1-FY 23 INR 14,602 Cr H1-FY 23 INR 2,70,922 Cr Weighted Received Total New Business Sum +16 % Assured +20.46% Premium H1-FY 22 INR 12,617 Cr H1-FY 22 INR 2,24,897 Cr H1-FY 23 INR 420 Cr H1-FY 23 INR 25, 228 Cr Total COVID 19 Claims +47.76% +12 % Total AP
Slide 14: Financial performance parameters
Financial performance parameters INR in Crore H1-FY 23 Rs. 16,635 Cr ₂ H1-FY 23 INR 43,36,133 Cr Profit After Tax +1057.62% Total Assets + 7.77% H1-FY 22 Rs. 1,437 Cr H1-FY 22 INR 40,23,590 Cr H1-FY 23 INR 3,677 Cr H1-FY 23 1.88 Value of New Business Solvency +.05 (Net) H1-FY 22 INR 1,583 Cr + 132.2
Slide 15: Performance ratios
Performance ratios H1-FY 23 14.5% Conservation Ratio H1-FY 23 92.48% VNB Margin Gross (Individual Par) H1-FY 22 94.84% H1-FY 22 12.9% H1-FY 23 79.5% H1-FY 23 0.00 % VNB Margin Gross Total Net NPA Ratio (Individual Non Par) H1-FY 22 0.05 % H1-FY 22 118.0% H1-FY 23 17.6% H1-FY 23 5.60 % VNB Margin Gro
Slide 16: Actuarial Updates
III ACTUARIAL UPDATES
Slide 17: Indian Embedded Value (IEV)
Indian Embedded Value (IEV) INR in Crore 545000 5,44,291 544000 543000 542000 5,41,492 541000 540000 5,39,686 539000 538000 537000 30th Sept. 21 31st March 22 30th Sept. 22 16 Source: Milliman Report, IEV as on 30th September 2021 includes bifurcation impact of INR 3,74,172 crore.
Slide 18: Build up of Indian Embedded Value
Build up of Indian Embedded Value INR in Crore Components March 2022 Sep 2022 A. Adjusted Net Worth (ANW) 10,527 26,271 B. Value of in-force (VIF) Business 5,30,966 5,18,020 C. Indian embedded value (IEV) (C=A+B) 5,41,492 5,44,291 Source: Milliman Report. Figures may not add up due to rounding. 17
Slide 19: Sensitivity analysis
Sensitivity analysis Change in Indian Change in New Business Sensitivity – Scenarios Embedded Value Margin (Percent) For the Year End 09/2022 09/2022 Base results (INR in Crore) 5,44,291 14.6% Reference An increase of 100 bps in the reference rates (0.6%) 1.2% rates A decrease of 100 bps in the refe
Slide 20: Annualised Premium Equivalent (APE) product mix
Annualised Premium Equivalent (APE) APE product mix INR in Crore H1- FY 2023 H1- FY 2022 Segment Q1FY23 Growth % Individual Par 5,950 13,328 10,925 22% Individual Non 500 1,315 750 75% Par Group 3,819 10,585 5,399 96% Total APE 10,270 25,228 17,074 48% Source Corporation data Figures may not add up
Slide 21: Value of New Business (VNB)
Value of New Business (VNB) - before TVFOG, FC and CRNHR² INR in Crore LIC of India H1FY23 4,836 H1FY22 3,064 Individual Business Group Business H1FY23 2,974 H1FY23 1,862 H1FY22 2,291 H1FY22 773 Non Par Businessˡ Par Business H1FY23 1,046 H1FY23 1,928 H1FY22 885 H1FY22 1,406 Source: Milliman Report.
Slide 22: Value of New Business (VNB) margin
Value of New Business (VNB) margin LIC of India H1FY23 (Net) 14.6% H1FY22 (Net) 9.3% Individual Business Group Business H1FY23 (Gross) 20.3% H1FY23 (Gross) 17.6% H1FY22 (Gross) 19.6% H1FY22 (Gross) 14.3% Non Par Businessˡ Par Business H1FY23 (Gross) 79.5% H1FY23 (Gross) 14.5% H1FY22 (Gross) 118.0% H
Slide 23: VNB Walk March 2022 to September 2022
VNB Walk March 2022 to September 2022 Source: Corporation Data 22
Slide 24: Persistency ratio (by premium)
80.00% 70.00% 67.69% 65.21% 61.63% 60.00% 58.27% 54.93% 55.35% 52.46% 53.67% 51.61% 49.38% 50.00% 40.00% H1FY23 H1FY22 30.00% 20.00% 10.00% 0.00% 13th Month 25th Month 37th Month 49th Month 61st Month 23 Source Corporation data as per IRDAI guidelines
Slide 25: Persistency ratio (by number of policies)
90.00% 80.00% 77.62% 78.77% 73.84% 70.91% 70.00% 67.85% 67.60% 64.73% 64.81% 62.77% 60.57% 60.00% 50.00% H1FY23 40.00% H1FY22 30.00% 20.00% 10.00% 0.00% 13th Month 25th Month 37th Month 49th Month 61st Month 24 Source Corporation data as per IRDAI guidelines
Slide 26: Policyholders age and policy term
Policyholders age and policy term¹ Average Age in Years Average Policy Term in Years 60 57 30 27 50 25 22 22 40 38 20 35 18 32 32 29 15 14 30 20 10 Average Age Average Term 10 5 1.6 0 0 Source Corporation data, ¹ Age and Term for Individual Products for H1FY23. 25
Slide 27: Marketing and Distribution Strengths
MARKETING AND DISTRIBUTION IV STRENGTHS 26
Slide 28: Robust agency force
Robust agency force 1600000 LARGEST AGENCY FORCE 14.00% GROWTH IN NO. OF AGENTS {2019 to 2022} Growth {H1FY23 over H1FY22} 12.48% 1400000 1353808 1326432 1334811 12.00% 1166503 11.29% 1208826 1200000 1116175 1101268 +.04% 1069640 9.91% 10.00% 1000000 8.00% 800000 -.01% +0.1% 600000 6.00% 400000 4.00
Slide 29: Exclusive agency network well trained leading to highest productivity
Exclusive agency network well trained leading to highest productivity Loyal agency network with a mix of youth and experienced professionals Mix of agents by age group Mix of agents by tenure Up to 5 Above 60 yrs 60% Years, 57% 9% 18-30 yrs 16% More than 5 50% Years 50-60 yrs 43% 20% 30-35 yrs 12% 4
Slide 30: Agents’ training
Agents’ training Training in Sales Training 6,017 Agents fulfilling the Training in External Centres and Zonal MDRT criteria Training Institutes -2,325 Training Centres – 1,22,025 Total 1,74,871 agents trained in 80% 78% Agents recruited within H1FY23 the 18-40 years age group Imparted training to n
Slide 31: Feet on street – our core distribution approach
Feet on street – our core distribution approach Organisational Structure Agents Training Infrastructure CO 1.43% Employees 8 Zonal Training Centers Office 8 Zonal 3.57% Employees Office 35 Sales Training Centers 113 Divisional Office 14.26% Employees 113 Divisional Training Centers 2048 Branch Offic
Slide 32: Differentiated business model with deep competitive moats
Differentiated business model with deep competitive moats Geographic distribution of individual agents (%) 53% 52% 52% 51% 50% 49% 48% 48% 47% 46% 45% Metropolitan, Urban Rural & Semi-urban PAN India presence of Agents which shows our feet on street 31 Source Corporation data as on 30.09.2022
Slide 33: Enhancing focus on building Omni-channel distribution network
Enhancing focus on building Omni-channel distribution network Snapshot of LIC’s vast distribution capabilities 1.33¹ mn Agents exclusive to LIC 77 Bancassurance partnerships 155² Corporate Agents 280 Brokers 117 Insurance Marketing Firms 39,812³ Premium points + 2687 MICRO Insurance Premium Points 1
Slide 34: Enhancing focus on building Omni-channel distribution network
Enhancing focus on building Omni-channel distribution network Snapshot of LIC’s vast distribution capabilities Distribution mix by individual NBP (%) Individual NBP sourced in India via the banca 0.39% 0.34% and alternate channels (INR Crore) 0.48% 0.13% 825 2.31% 3.37% +63% 506 96.82% 96.16% H1 22
Slide 35: Break up of business PAR and Non PAR – H1FY23
Break up of business PAR and Non PAR – H1FY23 Breakup of NB premium Particulars Non Par NBP share Term 0.40 % Health Insurance 0.16% Non- Par Annuity/Pension 24.25% 68.23% 31.77% Par Other Non Par 0.81% ULIP 6.16% Total 31.77% Share to total NB policies Particulars Non Par NB share (No of policy) Te
Slide 36: Group business segment
Group business segment INR in Crore 81 Market share (premium) Business premium 80 120000 79 100000 78 80000 80.34 77 60000 1,02,718 76 40000 76.72 66,296 75 20000 74 H1FY23 H1FY22 0 H1FY23 H1FY22 Growth – 54.94% YoY basis in Group business premium 35 Source: Corporation data
Slide 37: Achieving Operational Efficiency
ACHIEVING OPERATIONAL V EFFICIENCY
Slide 38: Deeply entrenched into Bharat
Deeply entrenched into Bharat Extensive domestic distribution network… Assam Jammu & Arunachal Breakup of our Business State wise² Kashmir; Ladakh Pradesh Meghalaya Punjab Himachal Pradesh Chandigarh Uttarakhand Tripura Haryana Delhi Sikkim Uttar Pradesh Rajasthan Bihar Madhya Pradesh Jharkhand Guja
Slide 39: Share of women in policies issued
Share of women in policies issued Rising Share of women in policies sold¹ In 32 States/UTs, the share in number of policies bought by women to the total policies sold was higher than the all-India average of 33%² 60% 50% 50% 41% 43% 40% 37% 35% 31% 32% 32% 30% 23% 20% 10% Out of the total 6,61,390 0
Slide 40: LIC marketing distribution - geared to recover/enhance market share
LIC marketing distribution - geared to recover/enhance market share LIC BUSINESS PERCENTAGE IN INDUSTRY LIC BUSINESS PERCENTAGE IN BY PREMIUM INDUSTRY BY PREMIUM 80 80 75 73 71 Apr-21 75 70 69 68 70 69 68 68 64 65 65 65 65 62 May-21 65 59 60 59 59 60 60 55 Jun-21 55 50 Apr-22 50 47 50 45 45 May-22 J
Slide 41: LIC marketing distribution - geared to recover/enhance market share
LIC marketing distribution - geared to recover/enhance market share LIC BUSINESS PERCENTAGE IN INDUSTRY BY POLICIES 81 LIC BUSINESS PERCENTAGE IN 80 77 75 INDUSTRY BY POLICIES 75 73 74 74 75 72 72 80 69 70 66 Apr-21 64 65 May-21 60 Jun-21 55 75 50 Jul-21 72 72 Apr-22 45 Aug-21 71 40 Sep-21 70 71 May
Slide 42: Technological innovations at LIC
Technological innovations at LIC Solutions designed to enhanced operational efficiency and respond with speed to specific situations Ananda APP – launched during COVID to enable Agents to do business without meeting customers face to face Time to Policy conclusion is less than 8 Minutes. Now ANANDA
Slide 43: Strengthening our digital process
Strengthening our digital process Empowering Policyholders 1. Policy Status Application facilitate submission of 2. First Unpaid Premium Digital existence certificate for date individual pension plan and staff 3. Last paid premium date LIC docQ Application helps pensioners of LIC 4. Download forms u
Slide 44: Empowering policyholders and agents in a digital world
Empowering policyholders and agents in a digital world Source Corporation data 43
Slide 45: Operational efficiency – print to post solution
Operational efficiency- illustration - print to post solution Print to Post – Developed Solution with Postal Department Policy bond printing and delivery solution. Dispatch of Tracking of Undelivered BRANCH OFFICE - 2048 policy bond policy bond return to Branch SATELITE OFFICE -1567 through speed th
Slide 46: Online service requests
Online service requests 2020-21 2021-22 3,94,542 2,31,179 Loan payment and Growth repayment e-NACH 70.67% ULIP fund switch Change of Mode PAN data NEFT registration registration Aadhaar based change of address Source Corporation data 45
Slide 47: Modes of premium collection and percentage to total policies
Modes of premium collection and percentage to total policies 30 26.5426.14 26.95 26.4 25 24.33 23.19 20 15 13.41 12.23 10 8.92 8.24 5 0.76 0.48 0.99 1 0 LIC Portal/APP Other Apps Bill Pay NACH & Direct Merchant Banks & Cash counter Debit Frenchisees H1FY22 H1FY23 Source Corporation data 46
Slide 48: No. of Customers
LIC customer APP users Portal registered customers Figures in Figures in App rating Lakh Lakh 4.18/ 5.00¹ 70 250 60 203 59 200 193.8 57.5 50 169 No. of Customers 45.4 40 150 30 100 20 10 50 0 FY21 FY22 H1FY23 0 FY21 FY22 H1FY23 Source Corporation data,.¹App Rating as on 30.09.2022 47
Slide 49: Customer care – at our core philosophy
Customer care – at our core philosophy Settled total death claims of Rs. 11,665 crore in H1FY23 as against Rs. 21,314 crore in H1FY22. Claim settlement ratio (Death) in H1FY23 is 95.57% by number as against 94.05% in H1FY22. Every 1.18 second, 1 claim was settled by the LIC of India during FY2
Slide 50: Key Focus Area
VI KEY FOCUS AREA
Slide 51: Strategy – Key Focus Areas
Strategy – Key Focus Areas I. Diversify Product Mix – Focus on enhancing Non Par Share. II. Launch New Products based not only on customer needs but also channel needs. III. Increase digital processes all across to drive higher efficiency. IV. Create optimum mix of distribution channels while retain
Slide 52: Appendix
APPENDIX rreerry Te
Slide 53: Highly experienced management team, distinguished Board and governance
Highly experienced management team, distinguished Board and strong corporate governance framework Shri Mangalam Shri Suchindra Ramasubramanian Shri Raj Kumar Shri Siddhartha Misra Managing Director Kumar Mohanty Government Whole-time Managing Director Nominee Director Chairperson Smt. Ipe Mini Shri
Slide 54: Financials - Standalone Balance Sheet
Financials - Standalone Balance Sheet (INR lakhs) For the Year ended For the half year ended Particulars March 31, 2022(Standalone) September 30, 2021(Standalone) September 30, 2022(Standalone) Sources of funds Shareholders' funds: Share capital 6,32,499.77 6,32,499.77 6,32,499.77 Reserves and surpl
Slide 55: Standalone Statement of Revenue (Policyholders’ Account)
Financials - Standalone Statement of Revenue (Policyholders’ Account) (INR lakhs) For the year ended For the half year ended Particulars March 31, 2022(Standalone) September 30, 2021(Standalone) September 30, 2022(Standalone) Premiums earned - net (a) Premium 4,28,02,497.15 1,86,29,345.56 2,30,66,75
Slide 56: Standalone Statement of Profit & Loss (Shareholders’ Account)
Financials – Standalone Statement of Profit & Loss (Shareholders’ Account) (INR lakhs) For the year ended For the half year ended Particulars March 31, 2022(Standalone) September 30, 2021(Standalone) September 30, 2022(Standalone) Amounts transferred from/to the Policyholders account (Technical Acco
Slide 57: LIC – Group structure
LIC – Group structure Foreign branches1 Subsidiaries Associates Country Entity Country Entity Stake held (%) Country Entity Stake held (%) 100.00% 45.24%3 Fiji Branch 100.00% 5.38%3 Mauritius 99.66%2 Branch 49.24%4 100.00% 29.84%4 United Kingdom 80.00% Branch 44.94% 55.00% LIC Mutual Fund X% - Share
Slide 58: India is one of the fastest growing major economies
India is one of the fastest growing major economy (GDP Growth, Percentage year-on-year) 10 5 0 -5 -10 -15 2014 2015 2016 2017 2018 2019 2020 2021 2022P 2023P 2024P 2025P India 7.4 8 8.3 7 6.1 4.2 -8 9 9 7.1 6.3 6.2 China 7.3 6.9 6.8 6.9 6.7 6 2.3 8.1 4.8 5.2 5.2 5.1 Japan 0.4 1.2 0.5 2.2 0.3 0.3 -4.
Slide 59: Share of life insurance in incremental household financial saving
Share of life insurance in incremental household financial saving 120.00% 100.00% 12.30% 14.70% 13.40% 2.70% 1.90% 6.60% 80.00% 13.00% 12% 14.50% 18.70% 19.30% 60.00% 16.70% 16.80% 15.00% 40.00% 19.40% 20.00% 36.50% 36.60% 29.40% 0.00% FY 19 FY 20 FY 9M21 Bank Deposits Life Insurance Funds Provident
Slide 60: Protection gap for different countries
Protection gap for different countries 90% 83% 80% 76% 74% 71% 70% 70% 61% 60% 55% 55% 54% India’s protection 50% gap for India was 41% 83% as of 2019, the 40% highest among all countries in Asia- 30% Pacific¹ 20% 10% 0% India Indonesia Malaysia Thialand Chaina Japan South Singapore Australia Hong K
Slide 61: Well positioned to ride growth in a highly underinsured market
Life Insurance Penetration %age Insurance Density (in US$)* 25 10000 8983 9000 20 19.2 8000 7000 15 14 6000 5000 10 4000 7.6 6.4 3000 5.8 2329 2050 5 4 2000 3.4 3.2 1000 415 244 241 59 0 0 Hong Taiwan Singapore South Japan Malaysia Thailand India Hong Kong South Japan Malaysia Thailand China India K
Slide 62: Household savings to increase
Household savings to increase Household Savings (% of GDP) 30.00% Household 25.20% saving as 25.00% 23.60% 23.10% 23.60% percentage 22.40% 22.50% 22.20% 20.30% 20.30% of GDP 19.60% 19.30% 19.60% 20.00% 18.00% 18.10% rose to 22.2% in 15.00% fiscal 2021 10.00% 5.00% 0.00% FY08 FY09 FY10 FY11 FY12 FY13
Slide 63: Embedding ESG in our business
Embedding ESG in our business - building a sustainable future for the communities LIC has integrated the SDGs with key areas of their business operations. LIC initiatives have ensured a positive contribution to at least 12 of the 17 SDGs Rural areas contributing 20.8% of individual policies sold an
Slide 64: Embedding ESG in our business
Embedding ESG in our business - building a sustainable future for the communities LIC has integrated the SDGs with key areas of their business operations. LIC initiatives have ensured a positive contribution to at least 12 of the 17 SDGs Support to various other sanitation projects by LIC GJF. C
Slide 65: Embedding ESG in our business
Embedding ESG in our business - building a sustainable future for the communities LIC has integrated the SDGs with key areas of their business operations. LIC initiatives have ensured a positive contribution to at least 12 of the 17 SDGs Outstanding investments worth INR 14.1bn in renewable energy
Slide 66: Committed to ESG initiatives across the organisation
Committed to ESG initiatives across the organisation Roof top solar capacity installed (KW) Series1 Total Reduction of carbon emissions (in tons) 4500 3500 3294 3971 4000 2966 3000 2856 3500 3376 3141 2500 3000 2051 2000 2500 1812 2254 2024 2000 1500 1500 1000 1000 500 500 0 0 FY 2019 FY 2020 FY 202
Slide 67: Awards won by LIC during 2022-23
Awards won by LIC during 2022-23 BFSI National Award for BFSI National Award for Leadership & Excellence - Best Life Insurance Company Leadership & Excellence - Best Customer Service Excellence Award in Claim Settlement Persistency Award BFSI National Award for BFSI National Award for Leadership & E
Slide 68: Glossary
Glossary New Business APE: The sum annualized first year premiums on regular premium policies, and 10.00% of single premiums, written by the Company during the fiscal year from both retail and group customers. New Business Premium NBP: Insurance premium that is due in the first policy year of a li
Slide 69: Abbreviation
ABBREVIATION Term Description Term Description GWP Gross Written Premium Opex Operating Expenses (excluding commission) NBP New Business Premium CAGR Compounded Annual Growth Rate NOP Number of Policies GDP Gross Domestic Product APE Annualized Premium Equivalent INR (Rs.) Indian Rupees IRP Individu
Slide 70: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this presentation which contain words or phrases such as ‘will’, ‘would’, ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute ‘forward-looking statements’. These fo
Slide 71: Thank You
Thank You Investor Relations Contact: Life Insurance Corporation of India Yogakshema, Seventh Floor, East Wing, Jeevan Bima Marg, Nariman Point, Mumbai- 400021. Contact # +91 66599479 Email - investorrelations@licindia.com Website – www.licindia.in
Life Insurance Corporation of India — H1 FY2023 Earnings Presentation on 6ix