LIC ROE highest among global peers, 4x its nearest competitor!

NEW DELHI: Life Insurance Corporation of India (LIC) had an return on equity (RoE) of 82 per cent in FY21, which was highest among global peers.

This was four times 19.5 per cent of its nearest competitor China's Ping An Insurance.



Return on equity signifies how good the company is in generating returns on the investment it received from its shareholders.

The life insurer's draft red herring prospectus (DRHP) suggests it is the eighth largest life insurer in terms of assets globally, with total assets of $507 billion. LIC reported a compounded annual growth rate (CAGR) growth of 8 per cent over FY17-21. At the end of December 2020, only Ping An Insurance, China Life Insurance Company and Samsung Life Insurance Company were the global peers that had higher CAGR growth in assets.

LIC ranked fifth in terms of net premium earned, with a premium of $56 billion in FY21. Over a period of 12 months ending in Calendar 2020, AXA SA ($113 billion), Ping An Insurance ($110 billion), Allianz SE ($909 billion), China Life Insurance Company ($88 billion) were the only global peers having a net premium higher than LIC.

In terms of growth, Ping An Insurance grew at a CAGR of 15 per cent over the last four years, followed by China Life Insurance Company (9 per cent) and LIC (6 per cent).

Also, nowhere in the world is the difference in market share between the largest and the second largest life insurer as stark as in India, with the second largest player having only 8 per cent market share of GWP compared to LIC’s market share of 64.1 per cent by GWP for Fiscal 2021.

"LIC’s market share in India is unparalleled globally, with no other life insurance player in any other country enjoying such a large market share," LIC said in its DRHP.