Life Insurance Corp. Of India · NSE:LICI
Life Insurance Corp. Of India — Life Insurance Corporation of India — H1 FY2024 Earnings Presentation
66 slides from Life Insurance Corp. Of India's earnings presentation, Nov 10, 2023
Slide 1: Stock exchange cover letter for analyst call presentation
Ref. No.: LIC/SE/2023-24/117 Date: November 10, 2023 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, Dalal Street G Block, Bandra Kurla Complex Mumbai-400001 Mumbai-4
Slide 2: Investor Presentation H1FY2024
INVESTOR PRESENTATION H1FY2024 November 10, 2023
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 Largest Insurance company by Market Cap in India1 Ranks 107th in the Fortune Global 500 list 2023 Composite business market share of 58.50%, Individual business market share of 40.35% and Group business market share of 70.26% for H1FY24 by First Ye
Slide 6: Cross cyclical and comprehensive life insurance solutions
Cross cyclical and comprehensive life insurance solutions Comprehensive Product Portfolio 16 Participating products 21 Non Participating Products (Including three 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 H1FY2024
New products launched during H1FY2024 Name of LIC’s Group Post- LIC’s Dhan Vriddhi LIC’s Jeevan Kiran Products Retirement Medical Plan Plan Benefit Plan Introduction date 02.05.2023 23.06.2023 27.07.2023 Par/Non Par Non-Par Non-Par Non-Par Product Categories Savings Endowment Term with return of pre
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 H1 FY24 INR 2,05,760Cr H1 FY24 58.50% Market Share in -9.75 % Total Premium Income -10.72 % H1 FY23 INR 2,30,456 Cr Premium¹ H1 FY23 68.25% (Absolute) H1 FY24 INR 25,184 Cr H1 FY24 INR 70,977Cr Individual New Business Total Group Business +2.65% -30.9
Slide 11: Business performance parameters
Business performance parameters Amount INR Crore H1 FY24 INR 14,640 Cr H1 FY24 INR 2,47,650 Cr Weighted Received Total New Business Sum Premium +0.26 % -8.59% H1 FY23 INR 14,602 Cr Assured H1 FY23 INR 2,70,922 Cr H1 FY24 3,99,651 H1 FY24 10,826 Cr Total Number of Death Claims (Individual) -10.21 % T
Slide 12: Financial performance parameters
Financial performance parameters Amount INR Crore H1 FY24 INR 17,469 Cr H1 FY24 96.10 % Claim Settlement Ratio +0.53% Profit After Tax¹ H1 FY23 INR 16,635 Cr Death (Absolute) H1 FY23 95.57% H1 FY24 1,70,751 H1 FY24 1.90 +0.02 Policies sold by BANCA +18.33% Solvency (Absolute) & Alternate Channel H1
Slide 13: Performance ratios
Performance ratios H1 FY24 9.06% +0.74% H1 FY24 7.45% Yield on Investment Yield on Investment -0.06% (Policyholders Fund)² H1 FY23 8.32% (Absolute) (Shareholders Fund)² H1 FY23 7.51% (Absolute H1 FY24 2.43% H1 FY24 92.12% -3.17% -0.36% Total Gross NPA Ratio¹ Conservation Ratio H1 FY23 5.60% (Absolut
Slide 14: Actuarial Updates
3 ACTUARIAL UPDATES
Slide 15: Indian Embedded Value (IEV)
Indian Embedded Value (IEV) Embedded Value (INR Crore) 6,62,605 5,82,243 5,39,686 5,41,492 5,44,291 30th Sept 21¹ 31st Mar 22 30th Sept 22 31st Mar 23 30th Sept 23 Source: Corporation data,; Note 1. Milliman Report, IEV as on 30 Sep 2021 includes bifurcation impact of INR 3,74,172 crore. 14
Slide 16: Build up of Indian Embedded Value
Build up of Indian Embedded Value INR in Crore Components H1FY23 H1FY24 A. Adjusted Net Worth (ANW) 26,271 61,199 B. Value of in-force (VIF) Business 5,18,020 6,01,406 C. Indian embedded value (IEV) (C=A+B) 5,44,291 6,62,605 Source: Corporation data. Figures may not add up to total due to rounding o
Slide 17: Sensitivity analysis
Sensitivity analysis Change in Indian Change in New Business Sensitivity – Scenarios Embedded Value Margin (Percent) For the Year End 09/2023 09/2023 Base results (INR in Crore) 6,62,605 14.6% Reference An increase of 100 bps in the reference rates (0.8%) 1.4% rates A decrease of 100 bps in the refe
Slide 18: Annualized Premium Equivalent (APE)
Annualized Premium Equivalent (APE) INR Crore Year on Year Line of Business H1FY23 H1FY24 Growth A Individual Par 13,328 13,063 (1.99) % B Individual Non Par¹ 1,315 1,575 19.77% 1 Individual Saving 140 381 172.28% 2 Protection 125 82 (34.67) 3 Annuity 591 649 9.95% 4 ULIP 459 463 0.81% C Total Indiv
Slide 19: 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 (H1FY23) Breakup of Individual APE (H1FY24) Non- Par Non- Par 91.02% 8.98% 89.24% 10.76% Par Par Source: Corporation data; 1. Within India Business 18
Slide 20: Value of New Business (VNB)
Value of New Business (VNB) Amounts INR crore LIC of India H1FY23 H1FY24 Net VNB² 3,677 3,304 Net VNB Margin 14.6% 14.6% Individual Business² Group Business² H1FY23 H1FY24 H1FY23 H1FY24 Net VNB 2,314 2,137 Net VNB 1,363 1,167 Net VNB Margin 15.8% 14.6% Net VNB Margin 12.9% 14.6% Par Business² Non-Pa
Slide 21: VNB Walk H1FY23 to H1FY24
VNB Walk H1FY23 to H1FY24 Source: Corporation Data 20
Slide 22: Improvement in Persistency Ratios
Improvement in Persistency Ratios Persistency ratios largely maintained despite increasing competition Persistency ratio by # policies 65.21% 66.80% 61.63% 58.79% 54.93% 57.61% 52.46% 51.73% 51.61% 50.35% 13th Month 25th Month 37th Month 49th Month 61st Month H1FY23 H1FY24 Uptick in persistency rati
Slide 23: Policyholders Age and Policy Term
Policyholders Age and Policy Term Average Age in Years1 Average Policy Term in Years1 57 29 39 23 23 37 32 32 32 16 10 2.25 Annuity Protection ULIP Non Par Par Overall Protection ULIP Non Par Par Overall Annuity Savings Savings Source Corporation data, Note ¹Age and Term for Individual New Business
Slide 24: Marketing and Distribution Strengths
MARKETING AND 4 DISTRIBUTION STRENGTHS
Slide 25: Robust agency force
Robust agency force Largest agency force # Agents in lakh 13.81 13.47 13.46 12.81 12.09 10.70 Higher Vintage: 58% > 5 Years FY20 FY23 H1FY24 Others LIC LIC has dominant agency force – 49% plus of life insurance Industry. Source: Corporation data and life council data as on 30.09.2023; 24
Slide 26: 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 11% 15% 57.47% 51-60 yrs 31-35 yrs 21% 12% 42.53% 36-40 yrs 13% 41-50 yrs Up to 5 Yea
Slide 27: Agents' training
Agents’ training Training in Sales Training 5,849 Agents fulfilling the Total number of training MDRT criteria¹ Centres and Zonal infrastructure - 732 Training Centres – 1,07,117 Total 1,51,101 agents trained in 80% 75.99% Agents recruited within H1FY24 the 18-40 years age group Imparted training to
Slide 28: Feet on Street – LIC's Core Distribution Strength
Feet on Street – LIC’s Core Distribution Strength Organizational Structure Agents Training Infrastructure CO 2.15% Employees Office 8 Zonal Training Centers 8 Zonal Office 3.01% Employees 35 Sales Training Centers 113 Divisional Office² 14.30% Employees 113 Divisional Training Centers 2,130 Branch O
Slide 29: Differentiated business model with deep competitive moats
Differentiated business model with deep competitive moats Geographic distribution of individual agents (%) 53.51% 52.15% 47.85% 46.49% H1FY23 H1FY24 Rural Metropolitan, Urban & Semi Urban PAN India presence of Agents which shows our feet on street Source Corporation data as on 30.09.2023 28
Slide 30: 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 +2,725 MICRO 13.46¹ lacs Agents exclusive to LIC 39,777³ Insurance Premium Points 1532 Corporate Agents 296 Brokers 138 Insurance Marketing Firms 36 Covering 92% districts vs
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 Distribution mix by individual NBP (%) Individual NBP sourced in India via the banca 0.34% 0.26% and alternate channels (INR Crore) 0.13% 0.17% 3.37% 858.6 3.42% +04.02% 96.16% 96.16% 825.4
Slide 32: Focus on Increasing Share of Non-Par Products
Focus on Increasing Share of Non-Par Products Breakup of Individual New Business Breakup by premium (H1FY24) Breakup by no. of policies (H1FY24) Non- Par Non- Par Non Par NB Par Non Par Particulars share Particulars Par NBP share (# policy) 60.27% Term 0.28 % Term 0.30 % 93.96% Health Insurance 0.09
Slide 33: Group business segment
Group business segment INR in Crore Market share (premium) New Business Premium 80.34% 99,707 70.26% H1FY24 67,505 H1FY24 H1FY23 H1FY23 H1FY24 H1FY23 H1FY24 H1FY23 Growth (–) 32.30% YoY basis in Group new business premium 32 Source: Corporation data as on 30.09.2023.
Slide 34: Achieving Operational Efficiencies
ACHIEVING OPERATIONAL 5 EFFICIENCIES
Slide 35: 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 36: Share of women in policies issued
Share of women in policies issued Rising Share of women in policies sold¹ In 16 States/UTs, the share in number of policies bought by women to the total policies sold was higher than the all-India average of 34.7%² 45% 44% 42% 42% 41% 30% 30% 27% 26% 26% Out of the total 6,99,429 women agents, the s
Slide 37: 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 38: 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 39: Empowering policyholders and agents in a digital world
Empowering policyholders and agents in a digital world Source Corporation data 38
Slide 40: 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 41: Strengthening Digital Process – Customer Service
Strengthening Digital Process – Customer Service Online service requests Loan payment and repayment 8 1 e-NACH2 Change of Nomination & 7 PAYMENT RELATED 2 POLICY RELATED Assignment Unit Linked fund switch PAN1 data registration 6 3 NEFT3 registration Aadhaar based change of address 5 4 Change of Mod
Slide 42: Strengthening Digital Process – Customer Service
Strengthening Digital Process – Customer Service Services offered Verified Automated conversation messages WhatsApp services started in Dec-22 and 1.88 crore customers opted/enabled until Streamlined September-23 Ease of customer interaction services Uptrend in LIC customer APP users Rising website
Slide 43: Strengthening Digital Process – Driving Operational Efficiency
Strengthening Digital Process – Driving Operational Efficiency Increasing digital collection across channels (percentage to total policies) 27.63% 28.00% 25.67% 24.36% Other App includes: 23.70% Amazon Pay ,Bajaj 22.51% Finserv, CRED, Free Charge, GPay , InstaPay, JustDial, Mobikwik, PhonePe and Pay
Slide 44: Customer care – at our core philosophy
Customer care – at our core philosophy Settled total death claims of Rs. 10,826 crore in H1FY24 as against Rs. 11,665 crore in H1FY23. Claim settlement ratio (Death) in H1FY24 is 96.10% by number as against 95.57% in H1FY23. The number of policyholders complaints per 10,000 policies sold in H1
Slide 45: Key Focus Areas
6 KEY FOCUS AREAS
Slide 46: Strategy – Key Focus Areas
Strategy – Key Focus Areas #1I. Diversify Product Mix – Focus on enhancing Non Par Share. #2I. Launch New Products based not only on customer needs but also channel needs. #3I. Increase digital processes all across to drive higher efficiency. #4I. Create optimum mix of distribution channels while re
Slide 47: Appendix
APPENDIX
Slide 48: 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 Government Nominee Shri M Jagannath Shri Tablesh Pandey Whole-time Chairperson Managing Director Managing Director Director Shri Sat Pal Bhanoo Shri R Doraiswamy D
Slide 49: Financials - Standalone Balance Sheet
Financials - Standalone Balance Sheet (INR lakhs) For the Year ended For the half Year ended Particulars March 31, 2022(Standalone) March 31, 2023(Standalone) Sept. 30, 2022(Standalone) Sept. 30, 2023(Standalone) Sources of funds Shareholders' funds: Share capital 6,32,499.77 6,32,499.77 6,32,499.77
Slide 50: Financials - 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) March 31, 2023(Standalone) Sept. 30, 2022(Standalone) Sept.30, 2023(Standalone) Premiums earned - net (a) Premium 4,28,02,497.15 4,74,66
Slide 51: Financials – 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) March 31, 2023(Standalone) Sept. 30, 2022(Standalone) Sept 30, 2023(Standalone) Amounts transferred from/to the 12,19,345.85 36,04,
Slide 52: 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 53: 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 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 54: 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 55: 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 56: Well positioned to ride the growth in a highly underinsured market
Life Insurance Penetration %age FY 2022 Insurance Density (in US$)1 FY 2022 20 9000 8433 18 17.3 8000 16 7000 14 6000 5414 12 11.6 5000 10 4234 10 8.9 3772 4000 8 7.5 2866 6.1 6.1 3000 2654 5.8 2347 6 1971 1837 3.9 2000 4 3.4 3.2 1321 1000 698 623 2 444 253 246 160 69 0 0 WELL POSITIONED TO RIDE THE
Slide 57: 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 58: 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 12 of the 17 SDGs 46.49% agents in India reside in rural areas “Bima Gram” ini
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 12 of the 17 SDGs Support to various other sanitation projects by LIC GJF. C
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 12 of the 17 SDGs Outstanding investments worth INR 14.1bn¹ in renewable energy
Slide 61: 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) 4,252 4,969 3,826 4,471 2,966 2,856 3,376 3,141 2,051 1,812 2,254 2,024 FY 2019 FY 2020 FY 2021 FY 2022 FY2023 H1FY24 FY 2019 FY 2020 FY 2021 FY 2022 FY2023 H1FY2
Slide 62: Awards & Accolades
Awards & Accolades 61 Source: Corporation data
Slide 63: 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 64: 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 65: 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 66: 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 — H1 FY2024 Earnings Presentation on 6ix