With an eye on expansion, the management outlined plans to penetrate Tier-2, Tier-3, and rural areas, and to fortify its position against private competitors

Life Insurance Corporation (LIC) maintained its stronghold in the Indian insurance sector, commanding a 58.8 percent market share in first premium income for the fiscal year ending in March 2024.

With an eye on expansion, the management outlined plans to penetrate Tier-2, Tier-3, and rural areas, and to fortify its position against private competitors.

"We are committed to enhancing our presence in Tier-2, 3, and rural areas. In August 2023, we deployed approximately 6,000 probationary officers to cover every panchayat. Our agency transfer project, Jeevan Suraksha, will be intensified further," the management stated during a post-earnings analyst conference call on May 28, 2024.

As of March 2024, LIC's market share in individual single premium stood at 58.8 percent, towering over private players with a mere 12.1 percent, according to data from the Insurance Regulatory and Development Authority of India (IRDAI). LIC commanded a market share of 38.44 percent in individual business and an impressive 72.3 percent in group business.

In Q4FY24, the state insurer recorded a 2.5 percent year-on-year (YoY) increase in net profit, reaching Rs 13,762 crore, while net premium income surged by 15 percent YoY to Rs 1.5 lakh crore.

However, profit growth was tempered by a one-time wage revision in the quarter that ended in March 2024. LIC's management expenses rose by 15 percent YoY to Rs 24,709 crore in Q4FY24, up from Rs 21,435 crore in the corresponding quarter of the previous year. Particularly, employee remuneration and welfare expenses soared by 32 percent YoY to Rs 13,749 crore in Q4FY24 from Q4FY23.

Looking forward, the management underscored its strategic focus on maximising market share across various segments. The insurer plans to fuel top-line growth through the introduction of multiple products and diversification of channel mix.

Following the Q4 release, brokerages expressed optimism regarding LIC's growth prospects. JPMorgan analysts maintained an 'overweight' rating on LIC, setting a target price of Rs 1,340 per share, implying a 29 percent upside from the current levels. Similarly, Citi recommended a 'buy' rating, with a target price of Rs 1,295 per share.