LIC is India’s most privileged insurer. So why is it losing its way?
Subscribe to enjoy similar stories. India’s insurance sector is the 10th largest in the world, expected to be worth $170 billion by 2027. Driven by increased digitisation and awareness of the importance of insurance, the sector has grown at leaps and bounds since the pandemic.
Still, only 18% of India’s insurance-eligible population has cover, meaning there’s ample scope for the sector to grow. LIC is the unparalleled leader in this massive and fast-growing industry. Formed in 1956 and backed by the government, it currently houses policies with a combined sum-assured of ₹60 trillion, has a share of more than 60% in new business premiums, 70% of individual insurance policies, almost 90% in group insurance policies, and ₹55 trillion in assets under management (AUM).
For perspective, the AUM of India’s entire mutual fund industry is ₹67 trillion. Also read: This stock rallied 500% in four months. Now, its aiming for 6X revenue by 2029.
In 2000, the government opened up the insurance industry to private firms. Competition has increased and the rules of the game have been changing frequently since then. Faced with new regulations that require agility, LIC has ceded market share to private competitors.
As a result, LIC’s clout has been declining. It was listed on the bourses in May 2022 after a record-breaking initial public offering (IPO), but its stock has remained flat even as those of its competitors have rallied. LIC’s influence continued to wane in the December 2024 quarter (Q3FY25), during which net premium income fell 8.7% year-on-year to Rs.1.07 trillion.
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