Life Insurance Corp. Of India · NSE:LICI
Life Insurance Corp. Of India — Life Insurance Corporation of India — Q1 FY2023 Earnings Presentation
66 slides from Life Insurance Corp. Of India's earnings presentation, Aug 12, 2022
Slide 1: Exchange filing cover letter for analyst call presentation
IILIC �vflq;:f� � LIFE INSURANCE CORPORATION or INOIA Ref. No.: LIC/SE/2022-23/54 Date: August 12th , 2022 To, The Manager The Manager Listing Department Listing Department BSE Limited The National Stock Exchange of India Ltd. Phiroze Jeejeebhoy Tower Exchange Plaza, 5 th Floor, Plot C/1, Dalal Stre
Slide 2: Life Insurance Corporation of India Investor Presentation Q1-FY2023
Life Insurance Corporation of India Investor Presentation Q1- FY2023 1
Slide 3: Agenda
Agenda I - INTRODUCTION TO LIC II - BUSINESS AND FINANCIAL PERFORMANCE III - ACTUARIAL UPDATES IV - MARKETING AND DISTRIBUTION STRENGTHS V - ACHIEVING OPERATIONAL EFFICIENCY VI - WAY FORWARD APPENDIX 2
Slide 4: I Introduction to LIC
I INTRODUCTION TO LIC 3
Slide 5: Largest Life Insurer in India with Longest Legacy and Trust
Largest Life Insurer in India with Longest Legacy and Trust Built Over the Year 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$8,655mn brand value
Slide 6: Our Products Designed to Suit Customer Life Cycle
Our Products Designed to Suit to Customer Life Cycle Participating Products Non-participating Products 5 Product list indicative and not exhaustive.
Slide 7: Cross cyclical and comprehensive life insurance solutions
Cross cyclical and comprehensive life insurance solutions Comprehensive Product Portfolio 16 Participating products 18 Non Participating Products (Including three Annuity Products) 11 Group products (incl. one credit life and one annuity product) 8 Riders LIC’s Bima Ratna, LIC’s Dhan Sanchay and LIC
Slide 8: II Business and Financial Performance
II BUSINESS AND FINANCIAL PERFORMANCE 7
Slide 9: Business Performance Parameters
Business Performance Parameters INR Crore Q1-FY 23 INR 49,283 Cr Q1-FY 23 65.42% Total New Business Market Share in -2.10% Premium +34.38% Q1-FY 22 INR 36,673 Cr Premium¹ Q1-FY 22 67.52 % (Absolute) Q1-FY 23 INR 10,938 Cr Q1-FY 23 INR 38,345 Cr Individual New Business Group Business +36.04% + 33.92%
Slide 10: Business Performance Parameters
Business Performance Parameters INR Crore Q1-FY 23 INR 1,19,933 Cr Q1-FY 23 INR 6,595 Cr Weighted Received Total New Business Sum +36 % Assured Q1-FY 22 INR 74,616 Cr +61% Premium Q1-FY 22 INR 4,861 Cr Q1-FY 23 INR 2,334 Cr Total COVID 19 Claims Paid¹ +614 % Total APE Q1-FY 23 INR 10,270 Cr Q1-FY 22
Slide 11: Financial Performance Parameters
Financial Performance Parameters INR Crore Q1-FY 23 Rs. 682.88 Cr Q1-FY 23 INR 42,23,372 Cr Profit After Tax Total Assets + 7.61% Q1-FY 22 Rs. 2.94 Cr Q1-FY 22 INR 39,24,600 Cr Q1-FY 23 INR 1861 Cr Q1-FY 23 1.88 Solvency Value of New Business FY 22 INR 9920 Cr Q1-FY 22 1.73 FY 21 INR 6440 Cr Q1-FY 2
Slide 12: Performance Ratios
Performance Ratios Conservation Ratio Q1- FY 23 97.99% VNB Margin Gross Q1- FY 23 14.38% (Individual Par) Q1- FY 22 96.88% Q1- FY 23 0.00 % VNB Margin Gross Q1- FY 23 84.20% Total Net NPA Ratio (Individual Non Par) Q1- FY 22 0.05 % Q1- FY 23 5.84% VNB Margin Gross Q1- FY 23 15.26% Total Gross NPA Ra
Slide 13: III Actuarial Updates
— am ACTUARIAL UPDATES ditt 12
Slide 14: Value of New Business (VNB)
Value of New Business (VNB) - Before TVFOG, FC and CRNHR² INR in Crore LIC of India Q1FY23 1,861 FY 22 9,920 FY 21 6,440 Individual Business Group Business Q1FY23 1,278 Q1FY23 583 FY 22 7,101 FY 22 2,819 FY 21 5,215 FY 21 1,225 Non Par Businessˡ Par Business Q1FY23 421 Q1FY23 856 FY 22 2,624 FY 22 4
Slide 15: Value of New Business (VNB) Margin
Value of New Business (VNB) Margin LIC of India Q1FY23 13.60% (Net) FY 22 15.1% (Net) FY 21 9.9% (Net) Individual Business Group Business Q1FY23 19.80% (Gross) Q1FY23 15.26% (Gross) FY 22 19.96% (Gross) FY 22 19.02% (Gross) FY 21 16.54% (Gross) FY 21 11.51% (Gross) Non Par Businessˡ Par Business Q1F
Slide 16: Annualised Premium Equivalent (APE) Product Mix
Annualised Premium Equivalent (APE) APE Product Mix INR in Crore Segment Q1- FY 2023 % of Total APE Individual Par 5,950 57.94% Individual Non Par 500 4.87% Group 3,819 37.19% Total APE 10,270 100.00% 15 Source Corporation data Figures may not add up to total due to rounding off
Slide 17: Persistency ratios by month
70% 64% 61% 60% 56% 54% 52% 51% 50% 49% 48% 48% 45% 40% Q1FY23 30% Q1FY22 20% 10% 0% 13th Month 25th Month 37th Month 49th Month 61st Month 16 Source Corporation data as per IRDAI guidelines
Slide 18: Persistency ratios by month
80% 76% 72% 70% 68% 67% 64% 63% 61% 60% 59% 60% 56% 50% 40% Q1FY23 Q1FY22 30% 20% 10% 0% 13th Month 25th Month 37th Month 49th Month 61st Month 17 Source Corporation data as per IRDAI guidelines
Slide 19: VNB Walk March 2022 to June 2022
VNB Walk March 2022 to June 2022 0.8% (2.3%) 15.1% 13.6% Opening VNB Margin Impact of Product Impact of change in VNB Margin as on Mix assumptions 30th June 2022 18 Source: Corporation Data
Slide 20: Policyholders Age and Policy Term
Policyholders Age and Policy Term¹ Average Age in Years Average Policy Term in Years 70 30 27 60 58 25 22 22 22 50 20 40 36 35 15 34 32 33 15 14 29 30 10 20 Average Age Average Term 5 10 1.75 0 0 19 Source Corporation data, ¹ Age and Term for Individual Products for FY 2022.
Slide 21: V Marketing and Distribution Strengths
MARKETING AND DISTRIBUTION V STRENGTHS 20
Slide 22: Robust Agency Force
Robust Agency Force 1600000 LARGEST AGENCY FORCE 14.00% GROWTH IN NO. OF AGENTS {2019 to 2022} growth {Q1FY23 over Q1FY22} 12.48% 1400000 1353808 1326432 12.00% 11.29% 1208826 1116175 1179229 1101268 1200000 +3% 1069640 9.91% 1015518 10.00% 1000000 8.00% 800000 -1% +8% 600000 6.00% 400000 4.00% 2000
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, 70% More than 5 8.85%, 9% 18-30 yrs, Years 16.71%, 17% 60% 59% 50-60 yrs, 30-35 yrs, 19.44%, 1
Slide 24: Agents' Training
Agents’ Training Training in Sales Training 19,393 Agents fulfilling the Training in External MDRT criteria in FY22 Centres and Zonal Training Institutes -17,678 Training Centres - 2,85,290 Total 4,08,152 agents trained in 80% 80% Agents recruited in FY22 FY 22 within the 18-40 years age group Impar
Slide 25: Feet on Street – Our core distribution approach
Feet on Street – Our core distribution approach Organisational Structure Agents Training Infrastructure CO 1.42% Employees 8 Zonal Training Centers Office 8 Zonal 2.55% Employees Office 35 Sales Training Centers 113 Divisional Office 14.29% Employees 113 Divisional Training Centers 2048 Branch Offic
Slide 26: Differentiated business model with deep competitive moats
Differentiated business model with deep competitive moats Geographic distribution of individual agents (%) 54% 53% 53% 52% 51% 50% 49% 48% 47% 47% 46% 45% 44% Metropolitan, Urban Rural & Semi-urban PAN India presence of Agents which shows our feet on street 25 Source Corporation data
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 1.33 mn. Agents exclusive to LIC 77 Bancassurance partnerships 74 Corporate Agents 226 Brokers 118 Insurance Marketing Firms 39,358 Premium points + 4398 MICRO Insurance Premium Points 19,7
Slide 28: 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 0.15% and alternate channels (INR mn) 0.67% 0.16% 0.21% 1.54% 2.66% 2,905 +135..41 % 1,234 97.6% 97.0% Q
Slide 29: Annualised Premium Equivalent – Segment Wise
Annualised Premium Equivalent – Segment Wise INR in Crore INDIVIDUAL APE Q1FY23 12000 10270 10000 8000 5950 6000 3819 4000 2000 500 0 APE NON PAR APE PAR GROUP APE TOTAL APE Total APE INR 10,270 Crore as on June 2022 28 Source: Corporation data Note: Data for Q1FY23 on an India-only basis unless oth
Slide 30: Break up of Business – PAR and Non PAR
Break up of Business – PAR and Non PAR % Share to Total NB NON PAR Share in New Business Premium Premium 0.69% 0.40% 5.15% Saving 0.14% 29.67% Term Non- Par Annuity/Pension Par 70.33% 23.29% Health ULIP Share to total New Business NON PAR Share in New Business (Number of Policies Policies) 0.60% 4.3
Slide 31: Customer Satisfaction – Our Focus
Customer Satisfaction – Our Focus Surrender Ratio 2.4 2.36 2.36 2.35 2.32 2.3 2.25 2.21 2.2 2.15 2.1 2018-19 2019-20 2020-21 2021-22 Source: Corporation data. ¹¹surrender Ratio of Total Surrender amount to Total Investments as per summary of Financial Statements. 30
Slide 32: Group Business Segment
Group Business Segment INR in Crore 79.5 MARKET SHARE (PREMIUM) NEW BUSINESS PREMIUM 79 45000 78.5 40000 78 35000 77.5 30000 25000 77 78.87 20000 38,345 76.5 15000 28,633 76 76.43 10000 75.5 5000 75 Q1FY23 Q1FY22 0 Q1FY23 Q1FY22 Growth – 33.92% YoY basis in Group New Business Premium 31 Source: Corp
Slide 33: VI Way Forward
VI WAY FORWARD 32
Slide 34: Deeply entrenched into Bharat
Deeply entrenched into Bharat Extensive domestic distribution network… Assam Jammu & Arunachal Breakup of our Business Statewise Kashmir; Ladakh Pradesh Meghalaya Punjab Himachal Pradesh Chandigarh Uttarakhand Tripura Haryana Delhi Sikkim Uttar Pradesh Rajasthan Bihar Madhya Pradesh Jharkhand Gujara
Slide 35: 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 70 69 68 Apr-21 75 64 70 65 62 May-21 65.31 64.96 65.42 59 60 59 59 65 60 Jun-21 60 55 50 Jul-21 55 50 47 Aug-21 50 45 Sep-
Slide 36: LIC Marketing Distribution - geared to recover/enhance market share
LIC Marketing Distribution - geared to recover/enhance market share LIC BUSINESS PERCENTAGE IN INDUSTRY BY LIC BUSINESS PERCENTAGE IN POLICIES INDUSTRY BY POLICIES 80 77 80 75 74 74 75 75 72 73 72 69 70 66 64 Apr-21 65 60 May-21 75 55 Jun-21 50 Jul-21 45 Aug-21 70 71 Apr-22 40 Sep-21 70 69 May-22 35
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 customers face to face Time to Policy conclusion is less than 8 Minutes. Now ANANDA
Slide 38: 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 39: Empowering Policyholders and Agents in a Digital World
Empowering Policyholders and Agents in a Digital World 42 Source Corporation data
Slide 40: 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 41: Online Service Requests
Online Service Requests 2020-21 2021-22 394,542 231,179 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 40 Source Corporation data
Slide 42: Modes of Premium Collection and Percentage to Total Policies
Modes of Premium Collection and Percentage to Total Policies 30 26.54 26.14 26.95 26.4 25 24.33 23.19 20 15 13.41 12.23 10 9.35 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 Q1FY22 Q1FY23 41 Source Corporation data
Slide 43: No. of Customers
LIC Customer App Users Portal Registered Customers Figures in Figures in App Rating Lakh Lakh 4.10/ 5.00¹ 70 200 197.5 195 193.8 60 57.5 58.2 190 50 185 No. of Customers 45.4 40 180 175 30 170 169 20 165 10 160 155 0 FY21 FY22 Q1FY23 150 FY21 FY22 Q1FY23 42 Source Corporation data,.¹App Rating as on
Slide 44: Customer Care – At our core Philosophy
Customer Care – At our core Philosophy Settled Death Claims of 13,835.59 crore in FY22 as against 9,593.11 crore in FY21. Claim Settlement ration (Death) in FY22 is 98.74% by Number as against 98.62% in FY21. Every 1.18 second 1 claim settled by the LIC of India during FY22. The Number of Po
Slide 45: Way Forward – Strategic Initiatives
Way Forward – Strategic Initiatives 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 whi
Slide 46: Appendix
APPENDIX 45 45
Slide 47: Highly experienced management team, distinguished Board and strong governance
Highly experienced management team, distinguished Board and strong corporate governance framework Shri Mangalam Shri Suchindra Shri Raj Kumar Shri Siddhartha Ramasubramanian Misra Managing Director Mohanty Kumar Government Managing Director Whole-time Nominee Director Chairperson Smt. Ipe Mini Shri
Slide 48: Financials - Restated standalone balance sheet
Financials - Restated standalone balance sheet (INR lakhs) For the Year ended For the three Months ended Particulars March 31, 2021(Standalone) March 31, 2022(Standalone) June 30, 2021(Standalone) June 30, 2022(Standalone) Sources of funds Shareholders' funds: Share capital 10,000.00 6,32,499.77 10,
Slide 49: Restated standalone statement of revenue (Policyholders' account)
Financials - Restated standalone statement of revenue (Policyholders’ account) (INR lakhs) For the year ended For the nine months ended Particulars March 31, 2021(Standalone) March 31, 2022(Standalone) June 30, 2021(Standalone) June 30, 2022(Standalone) Premiums earned - net (a) Premium 4,03,28,655.
Slide 50: Restated Standalone statement of profit & loss (Shareholders' account)
Financials – Restated Standalone statement of profit & loss (Shareholders’ account) (INR lakhs) For the year ended For the three months ended Particulars March 31, 2021(Standalone) March 31, 2022(Standalone) June 30, 2021(Standalone) June 30, 2022(Standalone) Amounts transferred from/to the Policyho
Slide 51: 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 52: 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 Chaina 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
Slide 53: 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 54: 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 55: 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 5.8 3000 2329 2050 5 4 3.4 3.2 2000 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 56: 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 57: 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 a
Slide 58: 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 Contribution to Clean Ganga Fund by LIC GJF. Contributed Rs.
Slide 59: 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 14.1 lakh crore in renewab
Slide 60: 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) 4000 3500 3500 2966 3376 3000 2856 3141 3000 2500 2500 2051 2254 2000 1812 2024 2000 1500 1500 1000 1000 500 500 0 0 FY 2019 FY 2020 FY 2021 FY 2022 FY 20
Slide 61: Awards won by LIC during 2021-22
Awards won by LIC during 2021-22 60
Slide 62: Awards won by LIC during 2021-22
Awards won by LIC during 2021-22 61
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, Seventh Floor, East Wing, Jeevan Bima Marg, Nariman Point, Mumbai- 400021. Contact # +91 66599479 Email - investorrelations@licindia.com Website – www.licindia.com 65
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