Life Insurance Corp of India (LIC), the largest insurer in the country, reported a decrease in its new business margin for the fourth quarter, despite a slight rise in profit. The value of new-business margin (VNB) dropped to 17.2% for the quarter ending March 31, down from 19% the previous year.
The decline in VNB margins was attributed to weakness in group business, with LIC’s total group business premium for the year ending March 31 decreasing by 5.5%. Group insurance covers a group of people under the same contract, typically taken by companies to provide insurance for their employees.
Despite the decrease in VNB margins, LIC posted a 2.5% year-on-year increase in fourth-quarter profit to 137.63 billion rupees ($1.66 billion). This was partly due to a one-time gain from transferring funds of around 80 billion rupees to a shareholders’ account and a tax reversal of 76.93 billion rupees.
LIC’s solvency ratio, a measure of its ability to meet long-term debt obligations, improved to 1.98 in the quarter from 1.87 a year ago. The company also made provisions for a 119.60 billion rupees pension liability during the quarter.
Looking ahead, LIC expects premium income to continue growing by double digits in fiscal year 2025. The company’s board also approved a dividend of 6 rupees per share.
Overall, despite challenges in the group business segment, LIC remains optimistic about its future growth and financial stability.