LIC gave 35.9% returns in past year, outperforms market benchmark; is LIC a good buy now? The company aims to expand its non-par segment and enhance its distribution network while exploring entry into the health insurance market. LIC stock has outperformed the market benchmark in the past year. Should you invest in LIC now?
Life Insurance Corporation of India Ltd: The government-owned insurance and investment company reported a good performance in the first half of 2024-25, supported by 24% growth in annual premium equivalent (APE) and 38% growth in the value of new business (VNB) on a year-on-year basis. While the APE growth was led by healthy growth in individual non-par segment (savings/ULIPs/annuity/protection) and traction in the group business, an increased share of non-par products in the product mix aided the VNB growth.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} The embedded value or EV (measure of shareholder value creation) reported 24% growth in the first half, aided by strong equity markets, whereas AUM registered a 17% growth. However, the company’s EV is vulnerable to a sustained downfall in the equity market.
LIC is the fifth largest insurer in the world (according to the 2022 ranking by S&P Global Market Intelligence) with a robust agency force of 14.4 lakh. A diversified product mix catering to varied customer needs and an extensive distribution network facilitating widespread accessibility across urban and rural areas in India are the key strongholds of the company.
It is a beneficiary of the insurance industry’s buoyant growth prospects. Strong economic growth, low life insurance penetration and insurance density in India, rising disposable incomes, favourable demographics, increased risk awareness and digital penetration are some of the factors driving the industry’s growth. The life insurance premiums are expected to grow by 9% annually (in real terms) by 2032, which will position India as the fifth largest life insurance market globally, according to LIC’s 2023-24 annual report.
Finance
A2Z Of Money
By - elearnmarkets, Financial Education by StockEdge
Artificial Intelligence(AI)
Master in Python Language Quickly Using the ChatGPT Open AI
By - Metla Sudha Sekhar, IT Specialist and Developer
Finance
A2Z Of Finance: Finance Beginner Course
By - elearnmarkets, Financial Education by StockEdge
Data Analysis
Learn Power BI with Microsoft Fabric: Complete Course
By - Prince Patni, Software Developer (BI, Data Science)
Design
Microsoft Designer Guide: The Ultimate AI Design Tool
By - Prince Patni, Software Developer (BI, Data Science)
Artificial Intelligence(AI)
Mastering C++ Fundamentals with Generative AI: A Hands-On
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Learn InVideo AI: Create Videos from Text Easily
By - Prince Patni, Software Developer (BI, Data Science)
Strategy
ESG and Business Sustainability Strategy
By - Vipul Arora, Partner, ESG & Climate Solutions at Sattva Consulting Author I Speaker I Thought Leader
Artificial Intelligence(AI)
Generative AI for Dynamic Java Web Applications with ChatGPT
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Digital Marketing Masterclass by Pam Moore
By - Pam Moore, Digital Transformation and Social Media Expert
Finance
Crypto & NFT Mastery: From Basics to Advanced
By - CA Raj K Agrawal, Chartered Accountant
Entrepreneurship
Crafting a Powerful Startup Value Proposition
By - Dr. Anu Khanchandani, Startup Coach with more than 25 years of experience
Entrepreneurship
Boosting Startup Revenue with 6 AI-Powered Sales Automation Techniques
By - Dr. Anu Khanchandani, Startup Coach with more than 25 years of experience
Office Productivity
Mastering Microsoft Office: Word, Excel, PowerPoint, and 365
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Basics of Generative AI: Unveiling Tomorrow's Innovations
By - Metla Sudha Sekhar, IT Specialist and Developer
Data Science
MySQL for Beginners: Learn Data Science and Analytics Skills
By - Metla Sudha Sekhar, IT Specialist and Developer
Web Development
Intermediate Java Mastery: Method, Collections, and Beyond
By - Metla Sudha Sekhar, IT Specialist and Developer
Finance
AI and Generative AI for Finance
By - Hariom Tatsat, Vice President- Quantitative Analytics at Barclays
Artificial Intelligence(AI)
Tabnine AI Masterclass: Optimize Your Coding Efficiency
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Modern Marketing Masterclass by Seth Godin
By - Seth Godin, Former dot com Business Executive and Best Selling Author
Web Development
A Comprehensive ASP.NET Core MVC 6 Project Guide for 2024
By - Metla Sudha Sekhar, IT Specialist and Developer
Legal
Complete Guide to AI Governance and Compliance
By - Prince Patni, Software Developer (BI, Data Science)
Web Development
Mastering Full Stack Development: From Frontend to Backend Excellence
By - Metla Sudha Sekhar, IT Specialist and Developer
The company aims to increase its non-par share through a product mix change to sustain its VNB growth. To improve persistency across products, it is reviewing product designs, repricing products and offering higher incentives for the sale of bigger ticket size and longer duration policies. The management is optimistic that the new product designs and modified commission structure will help in mitigating the effect of new surrender value regulations (effective 1 October 2024).
The management has taken multiple strategic steps to grow its market share. Launching new products to plug any gap in the product portfolio, focus on the agency channel while developing the banca channel, enhancing investment yield while balancing risk, and emphasis on digital transformation are some of the key focus areas of the management.
LIC plans to build a new health insurance business and is preparing to obtain a composite licence. Alternatively, to bypass a composite licence, the management is exploring the option of acquiring a stake in a standalone health insurance company to leverage the expanding health insurance market. The stock has significantly outperformed the market benchmark in the past year with 35.9% returns, compared to BSE Sensex with 18.7% returns.
Selection methodology: We pick the stock that has shown the maximum increase in ‘consensus analyst rating’ during the past three months. The consensus rating is arrived at by averaging all analyst recommendations after attributing weights to each of them (1 for strong buy, 2 for buy, 3 for hold, 4 for sell, 5 for strong sell). An improvement in consensus analyst rating indicates that the analysts are getting bullish on the stock. Only stocks with more than five analysts covering them are considered. You can see similar consensus analyst rating changes during the past week in ETW 50 table.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances
