Siddarth Mohanty, chairman, LIC
“Our premium has fallen in Q1 as our ticket size of the policy has gone up. We would like to grow our bottomline but would ensure that our top line growth is maintained at better than the industry’s growth rate so that our market share remains secured. We are planning to launch innovative products and would also increase the share of non-PAR products in our business that will give better margins,” said Siddarth Mohanty, chairman, LIC
Mumbai:
State owned Life Insurance Corporation of India (LIC) on Thursday reported a jump in its April-June quarter net profit to Rs 9,544 crore.
LIC has clarified that the corporation’s profit after tax (PAT) for the Q1Fy24 was Rs. 9,543.71 crore which comprises of an amount of Rs. 7,491.53 crore (Net of Tax) pertaining to the accretion on the Available Solvency Margin(ASM), transferred from non par fund to shareholders account.
For the quarter ended June 30th, 2022, LIC’s PAT was Rs. 682.88 crore in which an amount of Rs 4,148.77 crore (Net of Tax) pertaining to the accretion on the Available Solvency Margin was not included as this amount was transferred from non par fund to shareholders account on September 30th 2022.
Therefore LIC’s comparable profit figure for quarter ended June 30th, 2022 is Rs. 4,831.65 crore (net of tax), said LIC’s statement.
LIC’s value of new business (VNB) has marginally declined to Rs 1,302 crore in Q1 FY24 from Rs1,397 crore in the year ago period.
The corporation’s value of new business margin inched up to 13.70 per cent in the first quarter of FY 24 from 13.6 per cent in the year ago period
However, the first-year premium for the reporting quarter came down to Rs 6,811 crore as against Rs 7,429 crore in the year-ago period, it said.
Its total premium income for the quarter came in flat at Rs 98,363 crore against Rs 98,352 crore in the year-ago period. The total premium income for Q1FY24 consisted of individual new business premium income of Rs 10,462 crore (Rs 10,938 crore in Q1FY23) and individual renewal premium income of Rs 52,311 crore (Rs 49,069 crore in Q1FY23).
“Our premium has fallen in Q1 as our ticket size of the policy has gone up. We would like to grow our bottomline but would ensure that our top line growth is maintained at better than the industry’s growth rate so that our market share remains secured. We are planning to launch innovative products and would also increase the share of non-PAR products in our business that will give better margins in future,” said Siddarth Mohanty, chairman, LIC.
Mohanty further said in coming days the corporation’s performance will improve in all parameters.
“`We will deliver better results days ahead,” he said.
LIC had invested around Rs 26,000 crore in equity in Q1FY24 and had made a profit of Rs 14,000 crore from its equity portfolio.
`We will take full advantage of the market in terms investment and profit,” said Mohanty.
The total income increased to Rs 1,88,749 crore for the June quarter as against Rs 1,68,881 crore in the year-ago period, LIC said in a regulatory filing.
The insurer earned Rs 53,638 crore as against Rs 50,258 crore in the same period a year ago.
Net income from investments during the quarter rose to Rs 90,309 crore as compared to Rs 69,571 crore in the April-June period of 2022-23.
The corporation’s average yield has improved to 8.78 per cent in Q1 Fy24 from 7.74 per cent in the corresponding quarter of the FY23.
Total assets of the corporation has soared by 12 per cent year on year (Y-O-Y) to Rs 46.16 trillion in the reporting quarter.
Solvency margin of LIC increased to 1.89 per cent as compared to 1.88 per cent in the same quarter a year ago.
On the asset quality front, gross non-performing assets ratio eased to 2.48 per cent from 5.84 per cent in the same period a year ago.
The 13th month persistency ratio at the end of first quarter came in at 75.10%, as against 70.16% in the last quarter. The same stood at 75.75% as of June 2022.
On an Annualised Premium Equivalent (APE) basis the total premium was Rs 9,532 crore for the quarter ended June 30th 2023. Of this 62.42 per cent (Rs 5,950 crore) was accounted for by the Individual business and 37.58 per cent (Rs 3,582 crore) by the group business.
Within the individual business the share of Par products on APE basis was 89.78 per cent (Rs.5,342 crore) and balance 10.22 per cent (Rs.608 crore) was due to Non-Par products.
The non-par APE has increased from Rs. 500 crore for the quarter ended June 30th, 2022 to Rs. 608 crore for the quarter ended June 30th 2023 registering a growth of 21.6 per cent.
Therefore our non-par share of Individual APE which was 7.75per cent for the quarter ended June 30th 2022 has grown to 10.22per cent for the quarter ended June 30th 2023.
A total of 32,16,301 policies were sold in the individual segment during the quarter ended June 30th, 2023 as compared to 36,81,764 policies sold during the quarter ended June 30th, 2022.
Mohanty said their efforts to improve persistency across cohorts are beginning to show results and also there is improvement in the overall expense ratio and so is margin which has been stable.
“Simultaneously we continue to work on strategies for diversifying the channel mix. We believe we are on track to grow our business in a manner which creates superior value for all our stakeholders,” he said.