Life Insurance Corp. Of India · NSE:LICI
Life Insurance Corp. Of India — Life Insurance Corporation of India — Q1 FY2025 Earnings Presentation
63 slides from Life Insurance Corp. Of India's earnings presentation, Aug 8, 2024
Slide 1: Exchange filing cover letter for analyst call presentation
Ref. No.: LIC/SE/2024-25/71 Date: August 08, 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 Mum
Slide 2: Investor Presentation Q1FY2025
INVESTOR PRESENTATION Q1FY2025 August 8, 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 24 Non Participating Products (Including four Annuity Products) 11 Group products (incl. one credit life and one annuity product)¹ 8 Riders Source: Corporation data as on 30st June, 20
Slide 7: 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. 6
Slide 8: Business and Financial Updates
BUSINESS AND 2 FINANCIAL UPDATES
Slide 9: Business performance parameters
Business performance parameters Amount INR Crore Q1FY25 INR 1,13,770 Cr Q1FY25 INR 46,578 Cr Total Group Business Total Premium Income +15.66% +30.87% Premium Q1FY24 INR 98,363 Cr Q1FY24 INR 35,590 Cr Q1FY25 INR 11,892 Cr Q1FY25 64.02% Individual New Business Market Share in +2.6% +13.67% Premium Pr
Slide 10: Business performance parameters
Business performance parameters Amount INR Crore Q1FY25 INR 6871 Cr Q1FY25 INR 1,06,649 Cr Weighted Received Total New Business Sum Premium +8.70 % +6.22% Q1FY24 INR 6,321 Cr Assured Q1 FY24 INR 1,00,400 Cr Q1FY25 1,86,667 Q1FY25 5,467 Cr Total Number of Death Claims (Individual) - 0.75% Total Death
Slide 11: Financial performance parameters
Financial performance parameters Amount INR Crore Q1FY25 INR 10,461 Cr Q1FY25 95.31% +1.54% Profit After Tax¹ +9.61% Claim Paid Ratio Death Q1 FY24 INR 9,544 Cr Q1FY24 93.77% (Absolute) Q1FY25 1.99 +0.10 Number of Policies sold Q1FY25 35,65,519 +10.86% Solvency Q1FY24 1.89 (Absolute) (Individual) Q1
Slide 12: Performance ratios
Performance ratios Q1FY25 8.54 % -0.24% Q1FY25 6.30% Yield on Investment Yield on Investment -0.34% (Policyholders Fund)² Q1 FY24 8.78 % (Absolute) (Shareholders Fund)² Q1 FY24 6.64 % (Absolute) Q1FY25 1.95% Q1FY25 93.35% -0.53% +0.37% Total Gross NPA Ratio¹ Conservation Ratio Q1 FY24 2.48% (Absolut
Slide 13: Actuarial Updates
3 ACTUARIAL UPDATES
Slide 14: 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. 13
Slide 15: Annualized Premium Equivalent (APE)
Annualized Premium Equivalent (APE) INR Crore Year on Year Line of Business Q1FY24 Q1FY25 Growth A Individual Par 5,342 5,132 (3.93) % B Individual Non Par¹ 608 1,615 165.63% 1 Individual Saving 102 788 672.55% 2 Protection 33 38 15.15% 3 Annuity 289 359 24.22% 4 ULIP 184 431 134.24% C Total Individ
Slide 16: 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 (Q1FY24) Breakup of Individual APE (Q1FY25) Non- Par Non- Par 89.78% 10.22% 76.06% Par 23.94% Par Source: Corporation data; 1. Within India Business 15
Slide 17: Value of New Business (VNB)
Value of New Business (VNB) Amounts INR crore LIC of India Q1FY24 Q1FY25 Net VNB1 1,302 1,610 Net VNB Margin 13.7% 13.9% Individual Business Group Business Q1FY24 Q1FY25 Q1FY24 Q1FY25 Net VNB 804 1,047 Net VNB 498 563 Net VNB Margin 13.5% 15.5% Net VNB Margin 13.9% 11.7% Par Business Non-Par Busines
Slide 18: VNB Walk Q1FY24 to Q1FY25
VNB Walk Q1FY24 to Q1FY25 Source: Corporation Data 17
Slide 19: Improvement in Persistency Ratios
Improvement in Persistency Ratios Uptick in persistency ratios by policies seen in 13th and 49th Month Persistency ratio by # policies 66.15% 67.81% 59.28% 59.24% 57.72% 54.73% 52.04% 54.08% 50.79% 49.39% 13th Month 25th Month 37th Month 49th Month 61st Month Q1FY24 Q1FY25 Uptick in persistency rati
Slide 20: Policyholders Age and Policy Term
Policyholders Age and Policy Term Average Age in Years1 Average Policy Term in Years1 57 69 37 37 31 27 31 24 16 2.83 Annuity Protection ULIP Non Par Savings Par Annuity Protection ULIP Non Par Savings Par Source Corporation data as on 30.6.2024, Note ¹Age and Term for Individual New Business polici
Slide 21: Marketing and Distribution Strengths
MARKETING AND 4 DISTRIBUTION STRENGTHS
Slide 22: Robust agency force
Robust agency force Largest agency force # Agents in lacs 14.80 15.05 14.15 14.25 13.47 12.81 12.09 10.70 Higher Vintage: 54.98% > 5 Years FY20 FY23 FY24 Q1FY25 Others LIC LIC has dominant agency force – 48.64% of life insurance Industry. Source: Corporation data and life council data as on 30.06.20
Slide 23: 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 54.98% 12% 12% 31-35 yrs 45.02% 11% 51-60 yrs 23% 36-40 yrs 13% 41-50 yrs Up to 5 Yea
Slide 24: Agents' training
Agents’ training Training in Sales Training 1,789 Agents fulfilling the MDRT Total number of training criteria¹ Centres and Zonal infrastructure - 732 Training Centres – 82,546 Total 1,02,157 agents trained in 80% 78.92 % Agents recruited within Q1FY25 the 18-40 years age group Imparted training to
Slide 25: Feet on Street – LIC's Core Distribution Strength
Feet on Street – LIC’s Core Distribution Strength Organizational Structure Agents Training Infrastructure CO 2.18% Employees Office 8 Zonal Training Centers 8 Zonal Office 2.99% Employees 35 Sales Training Centers 113 Divisional Office² 13.86% Employees 113 Divisional Training Centers 2,130 Branch O
Slide 26: Differentiated business model with deep competitive moats
Differentiated business model with deep competitive moats Geographic Distribution of Individual Agents (%) 59.40% 51.84% 48.16% 40.60% Q1FY24 Q1FY25 Rural Urban Pan India presence of Agents which shows our feet on street Source Corporation data as on 30.06.2024 25
Slide 27: 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 +2,746 MICRO 14.25¹ lacs Agents exclusive to LIC 40,007³ Insurance Premium Points 83 2 Corporate Agents 280 Brokers 153 Insurance Marketing Firms 36 Covering 92% districts vs
Slide 28: 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 & Alt channel (INR Crore) Q1FY 24 Particulars Others 411.3 +22.27% Banca & Alt 3.22 % 336.4 Digital Mar
Slide 29: Focus on Increasing Share of Non-Par Products
Focus on Increasing Share of Non-Par Products Breakup of Individual New Business Breakup by premium (Q1FY25) Breakup by no. of policies (Q1FY25) Non- Par Non- Par Non Par NB Par Non Par Particulars share Particulars Par NBP share (# policy) Term 0.18 % 90.73% Term 0.22 % 53.54% Health Insurance 0.04
Slide 30: Group Business Segment
Group Business Segment INR in Crore New Business Premium Market Share ( by premium) 76.59% 72.50% Q1FY24 Q1FY24 Q1FY25 Q1FY25 45,570 34,398 Q1FY24 Q1FY25 Q1FY24 Q1FY25 Source: Corporation data. 29
Slide 31: Achieving Operational Efficiencies
ACHIEVING OPERATIONAL 5 EFFICIENCIES
Slide 32: 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 33: 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/UTs² 43% 43% 42% 30% 30% 28% 27% 23% Out of the tot
Slide 34: 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 35: Empowering policyholders and agents in a digital world
Empowering policyholders and agents in a digital world Source Corporation data 34
Slide 36: 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 37: 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 38: 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 39: Strengthening Digital Process – Customer Service
Strengthening Digital Process – Customer Service Services offered Verified Automated conversation messages WhatsApp services started in Dec-22 and 2.05 crore customers opted/enabled until Streamlined June-24 Ease of customer interaction services Uptrend in LIC customer APP users Rising website regis
Slide 40: Strengthening Digital Process – Driving Operational Efficiency
Strengthening Digital Process – Driving Operational Efficiency Increasing digital collection across channels (percentage to total transaction) 28.53% 27.01% 25.63% 24.60% Other App includes: 23.90% 23.00% Amazon Pay ,Bajaj Finserv, CRED, Free Charge, GPay , InstaPay, JustDial, Mobikwik, PhonePe and
Slide 41: Customer care – at our core philosophy
Customer care – at our core philosophy Settled total death claims of Rs. 5,467 crore in Q1FY25 as against Rs. 5,147 crore in Q1FY24. Claim paid ratio (Death) in Q1FY25 is 95.31% by number as against 93.77% in Q1FY24. The number of policyholders complaints per 10,000 policies sold in Q1FY25 is
Slide 42: Key Focus Areas
6 KEY FOCUS AREAS
Slide 43: Strategy – Key Focus Areas
Strategy – Key Focus Areas #1I. Focus on Enhancing Market Share – across categories. #2I. Diversify Product Mix – enhancing Non Par Share within individual business. #3I. Launch new products to plug any gap in product portfolio. #4I. Maintain focus on agency channel while developing the Banca and al
Slide 44: Appendix
APPENDIX
Slide 45: 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 Chief Executive Officer & Government Nominee Shri M Jagannath Shri Tablesh Pandey Managing Director Managing Director Managing Director Director Shri Sat Pal Bhano
Slide 46: Financials - Standalone Balance Sheet
Financials - Standalone Balance Sheet (INR lakhs) For the Year ended For the three months ended Particulars March 31, 2023(Standalone) March 31, 2024(Standalone) June 30, 2023(Standalone) June 30, 2024(Standalone) Sources of funds Shareholders' funds: Share capital 6,32,499.77 6,32,499.77 6,32,499.7
Slide 47: Financials - Standalone Statement of Revenue (Policyholders' Account)
Financials - Standalone Statement of Revenue (Policyholders’ Account) (INR lakhs) For the year ended For the three months ended Particulars March 31, 2023(Standalone) March 31, 2024(Standalone) June 30, 2023(Standalone) June 30, 2024(Standalone) Premiums earned - net (a) Premium 4,74,66,813.63 4,75,
Slide 48: Financials – Standalone Statement of Profit & Loss (Shareholders' Account)
Financials – Standalone Statement of Profit & Loss (Shareholders’ Account) (INR lakhs) For the year ended For the three months ended Particulars March 31, 2023(Standalone) March 31, 2024(Standalone) June 30, 2023(Standalone) June 30, 2024(Standalone) Amounts transferred from/to the Policyholders 36,
Slide 49: 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 50: 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 51: 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 52: 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 53: 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 54: 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 55: 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 50.01% agents in India reside in rural areas “Bima Gram” ini
Slide 56: 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 57: 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 58: 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 59: Awards & Accolades
Awards & Accolades 58 Source: Corporation data as on 30.06.2024.
Slide 60: 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 61: 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 62: 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 63: 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 — Q1 FY2025 Earnings Presentation on 6ix