LIC IPO: How does LIC's key financials stack up versus top 3 private life insurers?

14 Feb 2022 , 12:29 PM

Life Insurance Corporation (LIC) ended a long wait and finally filed its draft prospectus on Sunday night. We bring you the comparison of its financials with the top private life insurers on important parameters (see table).

Here are the key takeaways:

• LIC’s assets under management or AUM are over 16 times as compared to the second largest life insurer in India — SBI Life Insurance Company (SBI Life)
• LIC’s total premium is 8 times greater than that of SBI Life
• LIC scores higher than most of its peers in terms of profitability as well cash generation
• LIC’s persistency ratio (13^th month) was the lowest while that of HDFC Life Insurance Company (HDFC Life) was the highest at 85.9% as on September 30, 2021
• SBI Life, ICICI Prudential Life Insurance Company (ICICI Prudential Life) had the highest solvency ratio of 2.12 and 2.00, respectively
• ICICI Prudential Life posted highest VNB Margin of 27.3%, while that of LIC was the lowest at 9.3%

Particulars	LIC	SBI Life	HDFC Life	ICICI Prudential Life
Assets Under Management (Rs. bn)	39,558.9	2,442.0	1,912.1	1,814.9
Total premium (Rs. bn)	1,862.9	231.0	192.9	164.0
Total annualized premium equivalent (APE) (Rs. bn)	184.5	56.0	41.1	32.0
Embedded Value (Rs. bn)	5,396	352.9	287.0	302.0
Value of New Business (VNB) (Rs. bn)	15.83	12.2	10.9	8.7
VNB Margin	9.3%	21.8%	26.4%	27.3%
PAT (Rs. bn)	14.3	4.7	5.8	2.6
Solvency Ratio	1.83	2.12	1.90	2.00
Persistency Ratio (13th month)	78.8%	84.5%	85.9%	85.0%
Net cash added (Rs. bn)	370.0	55.2	50.9	22.8

Above figures are as on September 30, 2021
Source: LIC DRHP, Company reports, CRISIL Research

Author of the above article is Sheetal Agarwal, AVP-Content and Communication, IIFL