Life Insurance Corp. Of India · NSE:LICI
Life Insurance Corp. Of India — Life Insurance Corporation of India — Q1 FY2024 Earnings Presentation
64 slides from Life Insurance Corp. Of India's earnings presentation, Aug 10, 2023
Slide 1: Exchange filing cover letter for analyst presentation
Ref. No.: LIC/SE/2023-24/68 Date: August 10th, 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-40
Slide 2: Investor Presentation Q1FY 2024
7 “ INVESTOR PRESENTATION Q1FY 2024 le i TL in
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 10th largest life insurer globally by total premium volume2 Ranks 107th in the Fortune Global 500 list 2023 Composite business market share of 61.42% for Q1FY24 by First Year Premium Income³ 4 Sourc
Slide 6: Cross cyclical and comprehensive life insurance solutions
Cross cyclical and comprehensive life insurance solutions Comprehensive Product Portfolio 16 Participating products 20 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 Q1FY2024
New products launched during Q1FY2024 LIC’s Group Post-Retirement Name of Products LIC’s Dhan Vriddhi Plan Medical Benefit Plan Introduction date 02.05.2023 23.06.2023 Par/Non Par Non-Par Non-Par Product Categories Savings Endowment Features of product Non linked, Non-participating, life, group Non
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 Q1 FY24 INR 98,363Cr Q1 FY24 61.42 % Market Share in -4.0 % Total Premium Income + .01% Premium¹ (Absolute) Q1 FY23 INR 98,352 Cr Q1 FY23 65.42% Q1 FY24 INR 10,462 Cr Q1 FY24 INR 35,590 Cr Individual New Business Total Group Business -4.35% -7.19% Pre
Slide 11: Business performance parameters
Business performance parameters Amount INR Crore Q1 FY24 INR 6,321 Cr Q1 FY24 INR 1,00,400 Cr Weighted Received Total New Business Sum Premium -4.15 % Assured -16.29% Q1 FY23 INR 6,595 Cr Q1 FY23 INR 1,19,933 Cr Q1 FY24 1,88,080 Q1 FY24 INR 9,532 Cr Total Number of Death -7.19% Claims (Individual) -
Slide 12: Financial performance parameters
Financial performance parameters Amount INR Crore Q1 FY24 INR 9,543.71 Cr Q1 FY24 93.77% Profit After Tax¹ Claim Settlement Ratio +2.26% Q1 FY23 INR 682.88 Cr Death (Absolute) Q1 FY23 91.51% Q1 FY24 8.78% +1.04% Q1 FY24 1.89 +0.01 Yield on Investment Solvency (absolute) (Policyholders Fund)ˡ (absolu
Slide 13: Performance ratios
Performance ratios Q1 FY24 13.7% +0.1% Q1 FY24 92.98% Total VNB Margin Net Conservation Ratio -5.01% Q1 FY23 13.6% (Absolute) Q1 FY23 97.99% (Absolute) Q1 FY24 2.48% Q1 FY24 0.00% -3.36% 0.00% Total Gross NPA Ratio¹ Total Net NPA Ratio¹ Q1 FY23 5.84% (absolute) Q1 FY23 0.00% (absolute) Q1 FY24 12.85
Slide 14: Actuarial Updates
3 ACTUARIAL UPDATES
Slide 15: Indian Embedded Value (IEV)
Indian Embedded Value (IEV) Embedded Value (INR Crore) 5,82,243 5,41,492 5,44,291 5,39,686 30th 30 Sept21¹ th Sept 21 31st Mar 22 30th Sept 22 31st Mar 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: Annualized Premium Equivalent (APE)
Annualized Premium Equivalent (APE) INR Crore Year on Year Line of Business Q1FY23 Q1FY24 Growth A Individual Par 5,950 5,342 (-) 10.22% B Individual Non Par 500 608 21.6% C Total Individual (A+B) 6,450 5,950 (-) 7.75% D Group 3,819 3,582 (-) 6.21% E Total APE (C+D) 10,270 9,532 (-) 7.19% Source Cor
Slide 17: 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 (Q1FY23) Breakup of Individual APE (Q1FY24) Non- Par Non- Par 7.75% 92.25% 89.78% 10.22% Par Par Source: Corporation data; 1. Within India Business 16
Slide 18: Value of New Business (VNB)
Value of New Business (VNB) Amounts INR crore LIC of India Q1FY23 Q1FY24 Net VNB 1,397 1,302 Net VNB Margin 13.6% 13.7% Individual Business Group Business Q1FY23 Q1FY24 Q1FY23 Q1FY24 Net VNB 1,017 804 Net VNB 380 498 Net VNB Margin 15.8% 13.5% Net VNB Margin 10.0% 13.9% Par Business Non-Par Business
Slide 19: VNB Walk Q1FY23 to Q1FY24
VNB Walk Q1FY23 to Q1FY24 Source: Corporation Data 18
Slide 20: Improvement in Persistency Ratios
Improvement in Persistency Ratios Persistency ratios largely maintained despite increasing competition 65.96% 66.15% Persistency ratio by # policies 61.79% 59.28% 55.25% 57.72% 52.98% 52.04% 51.23% 50.79% 13th Month 25th Month 37th Month 49th Month 61st Month Q1FY23 Q1FY24 Uptick in persistency rati
Slide 21: Policyholders Age and Policy Term
Policyholders Age and Policy Term Average Age in Years1 Average Policy Term in Years1 57 29 23 23 37 38 32 32 31 17 14 2.26 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 22: Marketing and Distribution Strengths
MARKETING AND 4 DISTRIBUTION STRENGTHS
Slide 23: Robust agency force
Robust agency force Largest agency force # Agents in lakh 13.47 12.81 12.09 Agent Age 10.70 ~73% agents >35 years Higher Vintage: 58% > 5 Years FY20 FY23 Others LIC LIC has dominant agency force – 50% plus of life insurance Industry. Source: Corporation data and life council data as on 30.06.2023; 2
Slide 24: 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% 18-30 yrs More than 5 10% Years 15% 60% 58 % 51-60 yrs 31-35 yrs 20% 50% Up to 5 12% Years,
Slide 25: Agents' training
Agents’ training Training in Sales Training 3,191 Agents fulfilling the Total number of training MDRT criteria¹ Centres and Zonal infrastructure - 732 Training Centres – 52,567 Total 74,082 agents 80% 77.68% Agents recruited within trained in Q1FY24 the 18-40 years age group Imparted training to new
Slide 26: Feet on Street – LIC's Core Distribution Strength
Feet on Street – LIC’s Core Distribution Strength Organizational Structure Agents Training Infrastructure CO 1.85% Employees Office 8 Zonal Training Centers 8 Zonal Office 3.06% Employees 35 Sales Training Centers 113 Divisional Office 14.38% Employees 113 Divisional Training Centers 2,048 Branch Of
Slide 27: 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 Source Corporation data as on 30.06.2023 26
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 Premium points +2,713 MICRO 13.43¹ lacs Agents exclusive to LIC 40,593³ Insurance Premium Points 1492 Corporate Agents 293 Brokers 125 Insurance Marketing Firms 36 Covering 92% districts vs
Slide 29: 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 0.21% 0.16% and alternate channels (INR Crore) 336.4 0.15% 0.17% 2.66% 3.22% +15.80% 96.98% 96.45% 290.5
Slide 30: Focus on Increasing Share of Non-Par Products
Focus on Increasing Share of Non-Par Products Breakup of Individual New Business Breakup by premium (Q1FY24) Breakup by no. of policies (Q1FY24) Non- Par Non- Par Non Par NB Par Non Par Particulars share Particulars Par NBP share (# policy) Term 0.29 % Term 0.31 % 63.06% Health Insurance 0.08% 94.39
Slide 31: Group business segment
Group business segment INR in Crore Market share (premium) New Business premium 100% 90% 80% 70% 60% 50% 72.50% 76.43% 34,398 37,284 40% 30% 20% 10% 0% Q1FY24 Q1FY23 Q1FY24 Q1FY23 Growth (–) 7.74% YoY basis in Group new business premium Source: Corporation data as on 30.06.2023. 30
Slide 32: Achieving Operational Efficiencies
ACHIEVING OPERATIONAL 5 EFFICIENCIES
Slide 33: 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 34: 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 35: 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 Digital App for Agents to process New Business digitally face to face Key
Slide 36: 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 37: Empowering policyholders and agents in a digital world
Empowering policyholders and agents in a digital world Source Corporation data 46
Slide 38: 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 39: 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 40: Strengthening Digital Process – Customer Service
Strengthening Digital Process – Customer Service Services offered Verified Automated conversation messages WhatsApp services started in Dec-22 and 1.80 crore customers opted/enabled until Streamlined June-23 Ease of customer interaction services Uptrend in LIC customer APP users Rising website regis
Slide 41: Strengthening Digital Process – Driving Operational Efficiency
Strengthening Digital Process – Driving Operational Efficiency Increasing digital collection across channels (percentage to total policies) 27.01% 27.50% 25.58% 25.63% 24.92% Other App includes: 23.90% Amazon Pay ,Bajaj Finserv, CRED, Free Charge, GPay , InstaPay, JustDial, Mobikwik, PhonePe and Pay
Slide 42: Customer care – at our core philosophy
Customer care – at our core philosophy Settled total death claims of Rs. 5,147 crore in Q1FY24 as against Rs. 5,743 crore in Q1FY23. Claim settlement ratio (Death) in Q1FY24 is 93.77% by number as against 91.51% in Q1FY23. The number of policyholders complaints per 10,000 policies sold in Q1FY
Slide 43: Key Focus Areas
6 KEY FOCUS AREAS
Slide 44: 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 45: Appendix
APPENDIX
Slide 46: 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 Smt. Ipe Mini Shri M Jagannath Whole-time Chairperson Director Managing Director Managing Director Shri Tablesh Pandey Shri Sat Pal Bhanoo Dr. R
Slide 47: Financials - Standalone Balance Sheet
Financials - Standalone Balance Sheet (INR lakhs) For the Year ended For the three Months ended Particulars March 31, 2022(Standalone) March 31, 2023(Standalone) June 30, 2022(Standalone) June 30, 2023(Standalone) Sources of funds Shareholders' funds: Share capital 6,32,499.77 6,32,499.77 6,32,499.7
Slide 48: 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, 2022(Standalone) March 31, 2023(Standalone) June 30, 2022(Standalone) June 30, 2023(Standalone) Premiums earned - net (a) Premium 4,28,02,497.15 4,74,
Slide 49: 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, 2022(Standalone) March 31, 2023(Standalone) June 30, 2022(Standalone) June 30, 2023(Standalone) Amounts transferred from/to the 12,19,345.85 36,0
Slide 50: 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 51: 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 52: 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 53: 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 54: 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 55: 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 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 12 of the 17 SDGs Rural areas contributing 22.3% of individual policies sold an
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 12 of the 17 SDGs Support to various other sanitation projects by LIC GJF. C
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 Outstanding investments worth INR 14.1bn¹ in renewable energy
Slide 59: 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) 4,574 4,471 3,914 3,826 3,376 2,966 3,141 2,856 2,254 2,051 2,024 1,812 FY 2019 FY 2020 FY 2021 FY 2022 FY2023 Q1FY24 FY 2019 FY 2020 FY 2021 FY 2022 FY2023 Q1FY2
Slide 60: Awards & Accolades
Awards & Accolades 59 Source: Corporation data
Slide 61: 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 62: 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 63: 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 64: 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 FY2024 Earnings Presentation on 6ix