Aanalysts said the State-owned insurer Life Insurance Corporation of India faces several key challenges. These include a declining market share, higher exposure to the group business segment, and over-reliance on the agency distribution channels, according to experts.
Under Siddhartha Mohanty, who demitted office on June 7, LIC reported a modest rise in total premium collections, from Rs 4.74 trillion in FY23 to Rs 4.88 trillion in FY25.The new business premium (NBP) grew to Rs 62,495 crore in FY25, from Rs 58,757 crore in FY23. However, this slow growth contributed to a drop in market share, which declined to 57.05 per cent in FY25 from 62.3 per cent in FY23.
"One of the key challenges for LIC is its over-reliance on group business. There is a pressing need to grow its individual premium base. A critical concern is its declining market share, which can be addressed by expanding its individual business," an analyst said.
"Moreover, there is a demographic gap with LIC largely catering to an older population while private players tend to be focused more on the younger population," they added.
Amid the change in surrender value norms, effective October 1, 2024, that dented overall premium growth in the life insurance industry in FY25, LIC's new business premium (NBP) rose just 2 per cent year-on-year (Y-o-Y) to Rs 2.23 trillion.
In contrast, NBP had grown by 16.67 per cent Y-o-Y to Rs 2.32 trillion in FY23. Of the total business, group business accounted for 74.71 per cent in FY23 as against 97.95 per cent in FY25.
-- Aathira Varier, Business Standard
