In the fiscal year ending in March 2024, the Life Insurance Corporation (LIC) maintained its stronghold in the Indian insurance sector, commanding an impressive 58.8 percent market share in first premium income. This significant market share solidifies LIC’s position as a leading player in the industry.
Expansion Plans and Focus on Tier-2, Tier-3, and Rural Areas
To further strengthen its position and expand its reach, LIC’s management has outlined plans to penetrate Tier-2, Tier-3, and rural areas. They are committed to enhancing their presence in these regions and have already taken steps towards this goal. In August 2023, LIC deployed approximately 6,000 probationary officers to cover every panchayat. Additionally, their agency transfer project, Jeevan Suraksha, will be intensified to support their expansion efforts.
LIC’s Dominance in the Indian Insurance Market
As of March 2024, LIC’s market share in individual single premium stood at a remarkable 58.8 percent, towering over private players who held a mere 12.1 percent market share, according to data from the Insurance Regulatory and Development Authority of India (IRDAI). LIC’s dominance is also evident in individual business, where they commanded a market share of 38.44 percent, and in group business, where they held an impressive 72.3 percent market share.
Financial Performance in Q4FY24
In the fourth quarter of fiscal year 2024 (Q4FY24), LIC recorded a 2.5 percent year-on-year (YoY) increase in net profit, reaching Rs 13,762 crore. Their net premium income also saw significant growth, surging by 15 percent YoY to Rs 1.5 lakh crore. However, the profit growth was tempered by a one-time wage revision in the quarter, resulting in a 15 percent YoY increase in management expenses to Rs 24,709 crore. Notably, employee remuneration and welfare expenses rose by 32 percent YoY to Rs 13,749 crore in Q4FY24 compared to Q4FY23.
Strategic Focus and Growth Prospects
Looking ahead, LIC’s management emphasized their strategic focus on maximizing market share across various segments. They plan to achieve top-line growth through the introduction of multiple products and diversification of the channel mix. With these strategies in place, LIC aims to continue its impressive growth trajectory in the Indian insurance market.
Analysts’ Optimism and Recommendations
Following the release of LIC’s Q4 financial results, brokerages expressed optimism regarding LIC’s growth prospects. JPMorgan analysts maintained an ‘overweight’ rating on LIC and set a target price of Rs 1,340 per share, implying a 29 percent upside from the current levels. Similarly, Citi recommended a ‘buy’ rating and set a target price of Rs 1,295 per share, indicating confidence in LIC’s future performance.