High ULIP sales, annuity products' repricing squeezed LIC margins

Analysts expect modest RoEV given lower margin profile than private peers

Despite a rise in the share of its non-participating plans, state-owned Life Insurance Corporation's (LIC's) value of new business (VNB) margins, a measure of profitability of life insurers, has not improved much largely because during this period, it sold more unit-linked plans, which typically have lower margins than non-par savings products.

The VNB margin of the insurer stood at 14.6 per cent in the 9MFY23 period. Margins were also impacted by the revision of annuity rates in August 2022 to be in line with the competition. However, LIC’s management expects growth in annualised premium equivalent (APE) to offset the impact