By Dimpal Gulwani, Siddhi Nayak and Nikunj Ohri
BENGALURU (Reuters) -Life Insurance Corporation of India, the country’s biggest insurer, forecast a 2%-3% higher value for new-business margin in fiscal 2025 and said it is eying a majority stake in a health insurance company.
“Work is going on” to buy a majority stake in a standalone health insurer, Siddhartha Mohanty, LIC’s chief executive officer, said in a media briefing, without disclosing details.
In May, LIC had said that it is exploring inorganic growth opportunities in the health insurance space.
Its value of new business (VNB), which measures expected profit from new premiums, rose 23.7% year-on-year for the June quarter. The net VNB margin for the period rose to 13.9% from 13.7% a year ago.
LIC reported a 9.6% rise in first-quarter profit to 104.61 billion rupees on Thursday, helped by increasing sales of high-margin non-participating policies and strong growth in its group business.
It also made transfers of 94.70 billion rupees ($1.13 billion) from non-par fund to shareholders’ funds during the quarter compared to a transfer of 74 billion rupees last year, the company said.
The premium LIC collects from non-par policies is parked in a non-participating fund. Since 2022, the company has been transferring some of this premium every quarter to a shareholders’ fund, aiding profit and shoring up its solvency ratio.
LIC’s solvency ratio, a measure of an insurer’s ability to meet its long-term debt obligations, rose to 1.99 from 1.89 a year earlier.
The group business’ total premium income rose 30.9% year-on-year during the quarter, LIC said in an exchange filing.
Group insurance covers people in the same plan and is generally taken by companies to provide insurance cover for their employees.
The insurer has been focusing on increasing the share of higher-margin non-participating policies in total policies sold.
Its net premium income rose nearly 16% to 1.14 trillion rupees.
($1 = 83.9350 Indian rupees)
(Reporting by Dimpal Gulwani in Bengaluru; Editing by Sonia Cheema and Maju Samuel)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.