Life Insurance Corp. Of India · NSE:LICI
Life Insurance Corp. Of India — Life Insurance Corporation of India — FY2024 Earnings Presentation
67 slides from Life Insurance Corp. Of India's earnings presentation, May 27, 2024
Slide 1: Cover letter to stock exchanges
Ref. No.: LIC/SE/2024-25/27 Date: May 27, 2024 To, The Manager The Manager Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd., th Phiroze Jeejeebhoy Tower, Exchange Plaza, 5 Floor, Plot C/1, Dalal Street, G Block, Bandra Kurla Complex, Mumbai-400001 Mumbai
Slide 2: Investor Presentation FY 2024
INVESTOR PRESENTATION FY 2024 May 27, 2024
Slide 3: Agenda
Agenda 1 – INTRODUCTION TO LIC 2 – BUSINESS AND FINANCIAL UPDATES 3 – ACTUARIAL UPDATES 4 – MARKETING AND DISTRIBUTION STRENGTHS 5 – ACHIEVING OPERATIONAL EFFICIENCIES 6 – KEY FOCUS AREAS APPENDIX
Slide 4: Introduction to LIC
1 INTRODUCTION TO LIC
Slide 5: Largest life insurer in India – clear market leader
Largest life insurer in India – clear market leader LIC of India is the WORLD's No.1 strongest Insurance Brand.1 Ranks 107th in the Fortune Global 500 list 2023. Ranked as the world’s 23rd Strongest Brand Globally in 2024.² Ranks 3rd in the Fortune India 500 list 2023. Life Insurance Corporation of
Slide 6: Cross cyclical and comprehensive life insurance solutions
Cross cyclical and comprehensive life insurance solutions Comprehensive Product Portfolio 16 Participating products 25 Non Participating Products (Including four Annuity Products) 11 Group products (incl. one credit life and one annuity product)¹ 8 Riders LIC’s Group Post-Retirement Medical Benefit,
Slide 7: New products launched during FY2024
New products launched during FY2024 LIC’s Group LIC’s LIC’s LIC’s LIC’s Name of Post- LIC’s Dhan Jeevan Jeevan LIC’s Index Jeevan Amritbaal Products Retirement Vriddhi Plan Kiran Dhara-II Plus Plan Utsav Plan Plan Medical Plan Plan Benefit Plan Introduction 02.05.2023 23.06.2023 27.07.2023 29.11.202
Slide 8: Our products designed to suit customer life cycle
Our products designed to suit customer life cycle Participating Products Non-participating Products Source: Corporation data, Product list indicative and not exhaustive. 7
Slide 9: Business and Financial Updates
BUSINESS AND 2 FINANCIAL UPDATES
Slide 10: Business performance parameters
Business performance parameters Amount INR Crore FY24 INR 4,75,070 Cr FY24 INR 1,71,302 Cr Total Group Business Total Premium Income 0.22% -5.48% Premium FY23 INR 4,74,005 Cr FY23 INR 1,81,242 Cr FY24 INR 57,716 Cr FY24 58.87% Individual New Business Market Share in -3.71% -1.77% Premium¹ Premium FY
Slide 11: Business performance parameters
Business performance parameters Amount INR Crore FY24 INR 35,099 Cr FY24 INR 6,30,114 Cr Weighted Received Total New Business Sum Premium - 1.42% - 9.42% FY23 INR 35,605 Cr Assured FY23 INR 6,95,645 Cr FY24 8,29,318 FY24 22,625 Cr Total Number of Death - 8.72% Total Death Claim Paid -3.41% Claims (I
Slide 12: Financial performance parameters
Financial performance parameters Amount INR Crore FY24 INR 40,675.79Cr FY24 98.15% Profit After Tax¹ Claim Paid Ratio Death -0.37% FY23 INR 36,397.40 Cr FY23 98.52% (Absolute) FY24 1.98 FY24 2,03,92,973 +0.11 Number of Policies sold -0.18% Solvency (Absolute) (Individual) FY23 1.87 FY23 2,04,28,937
Slide 13: Performance ratios
Performance ratios FY24 8.93% +0.64% FY24 8.02% Yield on Investment Yield on Investment + 1.54% (Policyholders Fund)² (Absolute) (Shareholders Fund)² (Absolute) FY23 8.29% FY23 6.48% FY24 2.01% FY24 89.84% -0.55 % - 1.83% Total Gross NPA Ratio¹ Conservation Ratio FY23 2.56% (Absolute) FY23 91.67% (A
Slide 14: Actuarial Updates
Eluic ards LIFE INSURANCE CORPORATION OF INDIA
Slide 15: Indian Embedded Value (IEV)
Indian Embedded Value (IEV) Embedded Value (INR Crore) 7,27,344 6,62,605 5,82,243 5,39,686 5,41,492 5,44,291 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Source: Corporation data, . For reporting as at 31.03.2024, IEV and other related metrics have been reviewed by BDO. 14
Slide 16: INR in Crore
INR in Crore 15 Source: Corporation Data, Figures may not add up to total due to rounding off. Future charge of INR 12,914 crores to shareholder’s fund over a period of 3 years starting from FY 2024-25, towards excess of expenses over allowable limits as per regulatory approval.
Slide 17: Build up of Embedded Value
Build up of Embedded Value INR in Crore Components March 2023 March 2024 A. Adjusted Net Worth (ANW) 46,115 69,443 B. Value of in-force (VIF) Business 5,36,128 6,57,902 C. Indian embedded value (IEV) (C=A+B) 5,82,243 7,27,344 Source: Corporation data. Figures may not add up due to rounding. 16
Slide 18: Analysis of movement in IEV
Analysis of movement in IEV Components FY 2024 (INR in Crore) Opening IEV 5,82,243 Expected return on Existing Business At Reference Rate 41,861 At Expected ‘real – world’ return in excess of Reference rate 10,337 Operating assumptions change 4,829 VoNB added during the period 9,583 Operating Experi
Slide 19: Sensitivity analysis
Sensitivity analysis Change in Change in New Sensitivity – Scenarios Indian Embedded Business Margin Value (Percent Points) For the Year End 3/2024 3/2024 Base results (INR in Crore) 7,27,344 16.8% An increase of 100 bps in the reference rates (0.4%) 4.2% Reference rates A decrease of 100 bps in the
Slide 20: Annualized Premium Equivalent (APE)
Annualized Premium Equivalent (APE) INR Crore Year on Year Line of Business FY23 FY24 Growth A Individual Par 35,231 31,392 (10.90) % B Individual Non Par¹ 3,436 7,041 104.94% 1 Individual Saving 516 3,812 638.84% 2 Protection 279 236 (15.58)% 3 Annuity 1,483 1,582 6.70% 4 ULIP 1,158 1,412 21.93% C
Slide 21: Focus on Increasing Share of Non-Par Products
Focus on Increasing Share of Non-Par Products Rising share of Non-Par in Individual APE1 Breakup of Individual APE (FY23) Breakup of Individual APE (FY24) Non- Par Non- Par 81.68% 91.11% 8.89% Par Par 18.32% Source: Corporation data; 1. Within India Business 20
Slide 22: Value of New Business (VNB)
Value of New Business (VNB) Amounts INR crore LIC of India FY23 FY24 Net VNB1 9,156 9,583 Net VNB Margin 16.2% 16.8% Individual Business1 Group Business1 FY23 FY24 FY23 FY24 Net VNB 5,986 7,238 Net VNB 3,170 2,345 Net VNB Margin 15.5% 18.8% Net VNB Margin 17.6% 12.6% Par Business1 Non-Par Business²
Slide 23: VNB Walk FY23 to FY24
VNB Walk FY23 to FY24 Source: Corporation Data 22
Slide 24: Policyholders Age and Policy Term
Policyholders Age and Policy Term Average Age in Years1 Average Policy Term in Years1 57 58 37 38 31 29 30 23 12 2.76 Annuity Protection ULIP Non Par Savings Par Annuity Protection ULIP Non Par Savings Par Source Corporation data as on 31.3.2024, Note ¹Age and Term for Individual New Business polici
Slide 25: Marketing and Distribution Strengths
MARKETING AND 4 DISTRIBUTION STRENGTHS
Slide 26: Robust agency force
Robust agency force Largest agency force # Agents in lacs 14.80 14.15 13.47 12.81 12.09 10.70 Higher Vintage: 65.05% > 5 Years FY20 FY23 FY24 Others LIC LIC has dominant agency force – 48.87% of life insurance Industry. Source: Corporation data and life council data as on 31.03.2024; 25
Slide 27: 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 Above 60 yrs 18-30 yrs 65.05% 12% 13% 31-35 yrs 11% 51-60 yrs 23% 34.95% 36-40 yrs 12% 41-50 yrs Up to 5 Yea
Slide 28: Agents' training
Agents’ training Training in Sales Training 17,433 Agents fulfilling the Total number of training Centres and Zonal MDRT criteria¹ infrastructure - 732 Training Centres – 2,96,274 Total 4,60,149 agents trained in 80% 76.20% Agents recruited within FY24 the 18-40 years age group Imparted training to
Slide 29: Feet on Street – LIC's Core Distribution Strength
Feet on Street – LIC’s Core Distribution Strength Organizational Structure Agents Training Infrastructure CO 2.08% Employees Office 8 Zonal Training Centers 8 Zonal Office 2.82% Employees 35 Sales Training Centers 113 Divisional Office² 13.70% Employees 113 Divisional Training Centers 2,130 Branch O
Slide 30: Differentiated business model with deep competitive moats
Differentiated business model with deep competitive moats Geographic Distribution of Individual Agents (%) 51.78% 50.94% 49.06% 48.22% FY23 FY24 Rural Urban Pan India presence of Agents which shows our feet on street Source Corporation data as on 31.03.2024 29
Slide 31: Enhancing focus on building Omni-channel distribution network
Enhancing focus on building Omni-channel distribution network Snapshot of LIC’s vast distribution capabilities Premium points +2,732 MICRO 14.14¹ lacs Agents exclusive to LIC 40,033³ Insurance Premium Points 1682 Corporate Agents 301 Brokers 143 Insurance Marketing Firms 36 Covering 92% districts vs
Slide 32: Enhancing focus on building Omni-channel distribution network
Enhancing focus on building Omni-channel distribution network Snapshot of vast distribution capabilities of LIC Distribution mix by Individual NBP (%) Individual NBP sourced in India via the banca channel (INR Crore) FY 23 Particulars Others 2,078.4 Banca 3.44 % Digital Marketing 0.13% 96.15% 3.85%
Slide 33: Focus on Increasing Share of Non-Par Products
Focus on Increasing Share of Non-Par Products Breakup of Individual New Business Breakup by premium (FY24) Breakup by no. of policies (FY24) Non- Par Non- Par Non Par NB Par Non Par Particulars share Particulars Par NBP share (# policy) 58.02% Term 0.29 % 92.51% Term 0.27 % Health Insurance 0.07% He
Slide 34: Group Business Segment
Group Business Segment INR in Crore New Business Premium Market Share ( by premium) 1,73,258 1,64,926 76.65% 72.30% FY23 FY23 FY24 FY24 FY23 FY24 FY23 FY24 Source: Corporation data. 33
Slide 35: Achieving Operational Efficiencies
ACHIEVING OPERATIONAL 5 EFFICIENCIES
Slide 36: 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 37: Share of women in policies issued
Share of women in policies issued Rising Share of women in policies sold¹ In 15 States/UTs, the share in number of policies bought by women to the total policies sold was higher than the all-India average of 34.2%² 44% 44% Top 5 and bottom 5 states/UTs 43% 43% 42% 30% 30% 28% 27% 23% Out of the tota
Slide 38: 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 Digital App for Agents to process New Business digitally customers face to face Key
Slide 39: Strengthening Digital Process – Empowering Policyholders
Strengthening Digital Process – Empowering Policyholders AI Chat Bot 1. Policy Status Application to facilitate submission of 2. First Unpaid Premium date Digital existence certificate for LIC docQ Application helps user to 3. Last paid premium date individual pension plan and staff submit documents
Slide 40: Empowering policyholders and agents in a digital world
Empowering policyholders and agents in a digital world Source Corporation data 39
Slide 41: Strengthening Digital Process – Driving Operational Efficiency
Strengthening Digital Process – Driving Operational Efficiency Print to Post Solution – Developed with Postal Department of India for Policy bond printing & deliveries Tracking of policy bond Dispatch of policy bond Undelivered policies return through speed post tracking through speed post to Branch
Slide 42: Strengthening Digital Process – Customer Service
Strengthening Digital Process – Customer Service Online service requests Loan payment and repayment 8 1 e-NACH2 7 PAYMENT RELATED Change of Nomination & POLICY RELATED Assignment 2 Unit Linked fund switch PAN1 data registration 6 3 NEFT3 registration Aadhaar based change of address 5 4 Change of Mod
Slide 43: Strengthening Digital Process – Customer Service
Strengthening Digital Process – Customer Service Services offered Verified Automated conversation messages WhatsApp services started in Dec-22 22 and 2 crore customers opted/enabled until Streamlined March-24 Ease of customer interaction services Uptrend in LIC customer APP users Rising website regi
Slide 44: Strengthening Digital Process – Driving Operational Efficiency
Strengthening Digital Process – Driving Operational Efficiency Increasing digital collection across channels (percentage to total transaction) 28.41% 27.01% 25.63% 24.34% 23.90% Other App includes: 22.78% Amazon Pay ,Bajaj Finserv, CRED, Free Charge, GPay , InstaPay, JustDial, Mobikwik, PhonePe and
Slide 45: Customer care – at our core philosophy
Customer care – at our core philosophy Settled total death claims of Rs. 22,625 crore in FY24 as against Rs. 23,423 crore in FY23. Claim paid ratio (Death) in FY24 is 98.15% by number as against 98.52% in FY23. The number of policyholders complaints per 10,000 policies sold in FY24 is 39.75.
Slide 46: Key Focus Areas
Eluic ards LIFE INSURANCE CORPORATION OF INDIA
Slide 47: Strategy – Key Focus Areas
Strategy – Key Focus Areas #1I. Diversify Product Mix – enhancing Non Par Share within individual business. #2I. Launch new products to plug any gap in product portfolio. #3I. Maintain focus on agency channel while developing the Banca and alternate channel. #4I. Focus on digital transformation. #5I
Slide 48: Appendix
Eluic ards LIFE INSURANCE CORPORATION OF INDIA
Slide 49: Highly Experienced Management, Distinguished Board and Strong Corporate Governance framework
Highly Experienced Management, Distinguished Board and Strong Corporate Governance framework Shri Siddhartha Mohanty Dr. M. P. Tangirala Shri M Jagannath Shri Tablesh Pandey Whole-time Chairperson Government Nominee Managing Director Managing Director Director Shri Sat Pal Bhanoo Shri R Doraiswamy D
Slide 50: Financials - Standalone Balance Sheet
Financials - Standalone Balance Sheet (INR lakhs) For the Year ended Particulars March 31, 2023(Standalone) March 31, 2024(Standalone) Sources of funds Shareholders' funds: Share capital 6,32,499.77 6,32,499.77 Reserves and surplus 39,49,204.86 75,74,008.41 Credit/(debit) fair value change account (
Slide 51: Financials - Standalone Statement of Revenue (Policyholders' Account)
Financials - Standalone Statement of Revenue (Policyholders’ Account) (INR lakhs) For the year ended Particulars March 31, 2023(Standalone) March 31, 2024(Standalone) Premiums earned - net (a) Premium 4,74,66,813.63 4,75,75,191.97 (b) Reinsurance ceded (66,352.58) (68,233.92) Sub-total 4,74,00,461.0
Slide 52: Financials – Standalone Statement of Profit & Loss (Shareholders' Account)
Financials – Standalone Statement of Profit & Loss (Shareholders’ Account) (INR lakhs) For the year ended Particulars March 31, 2023(Standalone) March 31, 2024(Standalone) Amounts transferred from/to the Policyholders account (Technical 36,04,887.21 40,02,196.20 Account) Income from Investments (a)
Slide 53: LIC – Group Structure
LIC – Group Structure Foreign branches1 Subsidiaries Associates Country Entity Country Entity Stake held (%) Country Entity Stake held (%) Fiji Branch 100.00% 45.24%3 Mauritius Branch 100.00% 5.38%3 United Kingdom Branch 99.66%2 49.24%4 Equity Participation 100.00% Country Entity Stake held (%) 29.8
Slide 54: India is one of the fastest growing major economy
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 2022 2023E 2024P 2025P India 7.4 8 8.3 7 6.1 4.2 -8 9 7.2 6.7 6.5 6.5 China 7.3 6.9 6.8 6.9 6.7 6 2.3 8.1 3.0 5.2 4.6 4.1 Japan 0.4 1.2 0.5 2.2 0.3 0.3 -4
Slide 55: Share of life insurance in incremental household financial saving
Share of life insurance in incremental household financial saving 120.00% 100.00% 9.75% 10.29% 13.22% 10.41% 12.25% 9.46% 6.72% 6.70% 2.09% 6.02% 2.65% 6.15% 80.00% 12.45% 7.99% 12.28% 12.16% 10.32% 23.57% 16.18% 21.07% 60.00% 17.86% 19.48% 21.13% 17.96% 18.26% 16.88% 14.25% 18.18% 40.00% 18.22% 16.
Slide 56: 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 China Japan South Singapore Australia Hong Ko
Slide 57: Well positioned to ride the growth in a highly underinsured market
Life Insurance Penetration %age FY 2022 Insurance Density (in US$)1 FY 2022 18 9000 16.7 8007 16 8000 14 7000 6074 12 6000 10 5000 9.1 8.2 8.1 8 7.4 4000 3669 5.9 5.5 3000 2730 2656 6 5.4 2239 2017 1942 3.7 3.4 2000 1705 4 3 1182 2 1000 614 609 432 255 235 184 70 0 0 WELL POSITIONED TO RIDE THE GROW
Slide 58: Household savings to increase
Household savings to increase Household Savings (% of GDP) 30.00% 25.20% 25.00% 23.60% 23.10% 23.60% 22.70% 22.40% 22.50% 20.30% 19.60% 19.30% 20.30% 20.21% Household 20.00% 19.10% 18.00% 18.10% 18.22% saving as percentage 15.00% of GDP is 18.22% in fiscal year 10.00% 2023 5.00% 0.00% FY08 FY09 FY10
Slide 59: Embedding ESG in our business - building a sustainable future for the communities
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 14 of the 17 SDGs 49.04% agents in India reside in rural areas “Bima Gram” ini
Slide 60: Embedding ESG in our business - building a sustainable future for the communities
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 14 of the 17 SDGs Support to various other sanitation projects by LIC GJF. C
Slide 61: Embedding ESG in our business - building a sustainable future for the communities
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 14 of the 17 SDGs Outstanding investments worth INR 14.1bn¹ in renewable energy
Slide 62: Committed to ESG initiatives across the organization
Committed to ESG initiatives across the organization Roof top solar capacity installed (KW) Total Reduction of carbon emissions (in tons) 6,575 5,454 4,471 3,826 3,376 2,856 2,966 3,141 2,254 2,051 2,024 1,812 FY 2019 FY 2020 FY 2021 FY 2022 FY2023 FY24 FY 2019 FY 2020 FY 2021 FY 2022 FY2023 FY2024
Slide 63: Awards & Accolades
Awards & Accolades 62 Source: Corporation data as on 31.03.2024.
Slide 64: 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 65: 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 66: 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 67: Thank You
THANK YOU Investor Relations Contact: Life Insurance Corporation of India Yogakshema, Third Floor, West Wing, Jeevan Bima Marg, Nariman Point, Mumbai- 400021. Contact # +91 66599401 Email - investorrelations@licindia.com Website – www.licindia.in
Life Insurance Corporation of India — FY2024 Earnings Presentation on 6ix