LIC’s Q4FY25 Results: A Clear Look at What’s Working and What’s Not
LIC just released its results for the fourth quarter of FY25, and there’s a lot to unpack. Let’s take a simple, straightforward look at how the company performed, what’s going well, and where things could get tricky.
Why These Results Matter to You
In simple terms:
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LIC is shifting away from its traditional “par” insurance plans, which affects profit margins.
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This shift means growth from new business might slow down a bit in the next few years.
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But the good news is that stock markets have bounced back recently, which should help LIC’s investment income.
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Taking all this into account, the fair value estimate for LIC has been revised upwards to ₹1,260 from ₹1,175 and continues to have a positive outlook.
What Went Well in Q4FY25
Here are the highlights:
| What We Measured | FY24 | FY25 | What It Means |
|---|---|---|---|
Profit Margin on New Business | 16.8% | 17.6% | LIC is making more money on each new policy. |
Product Mix | Par > 50% APE | Par < 50% APE | LIC is offering a more balanced range of products. |
Premium Growth (Bancassurance & Others) | - | 58% Growth | Premiums through banks and other channels grew sharply. |
Profit After Tax (PAT) | ₹13,768 crore | ₹19,000 crore | Profits jumped 38% compared to last year. |
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LIC’s profit margin on new business rose from 16.8% to 17.6%.
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More focus on non-par policies is helping margins improve.
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The mix of products has shifted — now less than half of new premiums come from par plans.
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Premium growth from bancassurance (selling through banks) and other channels grew an impressive 58%.
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LIC’s profit after tax soared by 38% to ₹19,000 crore.
What’s Causing Concern?
Some areas need attention:
| What We Measured | FY24 | FY25 | What It Means |
|---|---|---|---|
Annual Premium Equivalent (APE) | Not specified | -11% | Premiums collected have dropped recently. |
Persistency Rates (Customer Renewal) | Not specified | Sharp Decline | Fewer customers are renewing policies on time. |
LIC’s premium collections declined by 11% in Q4FY25, following an even steeper 24% drop in the previous quarter.
- There was also a significant decline in policy renewals at 13th and 49th months, which shows some customers aren’t staying with LIC long term.
What Does This Mean for LIC?
In short: LIC is improving how much profit it makes on new business and offering a wider variety of products. That’s good news.
But the drop in premiums collected and fewer renewals could slow growth down in the future. Even with stock market gains helping investments, LIC will need to focus on getting more customers and keeping them longer.
Quick Snapshot of LIC’s Performance
| Metric | FY24 | FY25 | Change |
|---|---|---|---|
Profit Margin on New Business | 16.8% | 17.6% | Up 0.8 percentage points |
Premium Growth (APE) | - | -11% | Decline |
Growth from Bancassurance & Others | - | 58% | Strong growth |
Profit After Tax (₹crore) | - | 19,000 | Not specified |
Persistency Rates | - | Sharp Decline | Not specified |
The Bottom Line
LIC’s Q4FY25 results show a company changing its approach—boosting profits and diversifying products, but facing challenges with premium collections and customer loyalty.
The updated fair value of ₹1,260 and positive outlook reflect optimism that LIC can manage these challenges and benefit from better market conditions.
If you’re thinking about investing, keep an eye on how LIC improves its premium collections and keeps customers renewing policies.
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