LIC of India has a solvency ratio of 1.85 as of March 2022. LIC is a public sector and financially a well stable company. Solvency ratio is a very important factor to consider while selecting an insurer. IRDAI publishes the solvency ratio of LIC on quarterly basis (i.e. June, September, December and March) in their annual reports.
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Solvency Ratio of LIC of India from 2005 to 2023
Solvency ratio is a key factor to consider when selecting an insurance company as it gives the idea of the financial strength and stability of the insurer. We have made a year wise list of solvency ratios declared by ICICI Prudential life insurance on a quarterly basis.
| Financial Year | June | September | December | March | Average Solvency Ratio |
| 2022-23 | 1.89 | 1.88 | 1.85 | 1.87 | 1.87 |
| 2021-22 | 1.73 | 1.83 | 1.77 | 1.85 | 1.78 |
| 2020-21 | 1.60 | 1.65 | 1.64 | 1.76 | 1.66 |
| 2019-20 | 1.60 | 1.55 | 1.52 | 1.55 | 1.56 |
| 2018-19 | 1.52 | 1.51 | 1.50 | 1.60 | 1.53 |
| 2017-18 | 1.53 | 1.51 | 1.51 | 1.58 | 1.53 |
| 2016-17 | 1.73 | 1.52 | 1.51 | 1.58 | 1.59 |
| 2015-16 | 1.52 | 1.56 | 1.55 | 1.55 | 1.55 |
| 2014-15 | 1.52 | 1.53 | 1.51 | 1.55 | 1.53 |
| 2013-14 | 1.58 | 1.58 | 1.57 | 1.54 | 1.58 |
| 2012-13 | 1.60 | 1.60 | 1.58 | 1.54 | 1.58 |
| 2011-12 | 1.57 | 1.59 | 1.56 | 1.54 | 1.57 |
| 2010-11 | 1.62 | 1.66 | 1.58 | 1.54 | 1.60 |
| 2009-10 | 1.74 | 1.72 | 1.66 | 1.54 | 1.67 |
| 2008-09 | 2.02 | 1.79 | 2.27 | 1.54 | 1.91 |
| 2007-08 | – | – | – | 1.52 | 1.52 |
| 2006-07 | – | – | – | 1.50 | 1.50 |
| 2005-06 | – | – | – | 1.30 | 1.30 |
What is a Solvency Ratio?
Solvency ratio is an important metric used to measure the ability of an insurance company to meet its short-term and long-term financial liabilities. It indicates the insurer’s financial strength and stability.
How is Solvency Ratio Calculated?
Solvency ratio is calculated by dividing the Available Solvency Margin (ASM) to the Required Solvency Margin (RSM) of the company. In simpler terms it is the ratio of net operating income to the debt liabilities and calculated by the formula:
Solvency Ratio = (Total Income + Depreciation) / (Short Term Liabilities + Long Term Liabilities)
More the assets are against the liabilities, higher will be the solvency ratio.
LIC of India Regulatory Requirement (IRDAI) on Solvency Ratio?
IRDAI has made it mandatory for all insurance companies to have minimum solvency ratio of 1.5 and minimum solvency ratio margin* of 150%
*The solvency margin is the extra capital the companies must have over and above the death claim amounts they are likely to incur. It acts as financial support in extreme situations.
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LIC of India Solvency Ratio FAQs
LIC of India has a solvency ratio of 1.85 in 2021-22.
Solvency ratio is a measure of the insurance company’s ability to meet its short-term and long-term financial liabilities.
Sahara India life insurance has the 8.8 as highest solvency ratio in 2022.
As per IRDAI 1.5 is considered as a good solvency ratio.
Solvency Ratio = (Total Income + Depreciation) / Liabilities
This covers all the points on LIC of India solvency ratio. In case you have any suggestions or questions, please write in the comment box and we will get back to you.