“We continue to remain focussed on creating a portfolio mix to optimise value for all stakeholders, and in that context, increasing the proportion of Non-par business in a consistent and profitable manner,” said M R Kumar, chairperson, LIC
Mumbai:
Public sector insurer LIC on Thursday reported manifold jump in net income at Rs 6,334.2 crore during the three months ended December 2022 as against Rs 235 crore a year ago.
The profitability of the life insurer was made possible by transfer of Rs 5,670 crore from non-participatory to shareholders’ accounts.
Life Insurance Corporation (LIC) earned Rs 1,11,787.6 crore in net premium income during the reporting quarter as against Rs 97,620.34 crore in the year-ago period, it said in a regulatory filing.
The numbers are strictly not comparable as the insurer was not a publicly traded company earlier.
LIC reported a net premium income of Rs 1.11 trillion in Q3, up 14.51 per cent year-on-year (YoY) from Rs 97,620.34 crore a year ago, with the first-year premium income rising 11 per cent YoY to Rs 9,724.71 crore, renewal premium increasing 6 per cent YoY to Rs 60,194.87 crore, and single premium income jumping 30 per cent YoY to Rs 42,117.10 crore.
“Lately, we have come out with many non-par products. We could see changes in the non-par bucket on a quarterly basis because most of our agents are getting used to these new products. We need 1-2-year visibility before things happen as we want them to. As of now, we are focused on non-par products and we leave it to the customers as to what they want to buy – annuity, ULIP, or term,” said MR Kumar, chairperson of LIC.
He said LIC would reach 25 per cent margins faster than its private sector rivals. “We have come from 9 per cent to 14.6 per cent in hardly any time,” Kumar added.
Value of new business margin, a measure of profitability of life insurance companies, stood at 14.6 per cent for the nine months of FY23, which was the same at the end of the September quarter (6MFY23), despite a rise in the share of non-par business in its portfolio.
“Within the non-par segment, there are different types of businesses. Non-par savings has a higher contribution to margins but that part of our business has not grown, whereas unit-linked plans (ULIPs) have grown. Therefore, the overall margin has not grown,” said KR Ashok, executive director, actuarial, LIC.
Assets under management (AUM) increased to Rs 44.34 trillion as on December 31, 2022, compared with Rs 40.12 trillion in the year-ago period, registering an increase of 10.5 per cent. Its shares closed 0.53 per cent higher on the BSE on Thursday at Rs 613.35 apiece.
LIC’s income from investments rose to Rs 84,889 crore from Rs 76,574.24 crore a year ago, the filing said.
Its investments into the crisis-ridden Adani Group has been under tremendous criticism even though the value of the investment of close to Rs 36,000 crore are still in the green despite those shares losing almost 60 per cent of their value since January 25.
“We continue to remain focussed on creating a portfolio mix to optimise value for all stakeholders, and in that context, increasing the proportion of Non-par business in a consistent and profitable manner,” said Kumar.
In the Individual business, on an APE basis, the share of Non Par Business has increased to 9.45 per cent for the nine months ended December 31st, 2022, as against 7.12 per cent for full year ended March 31st, 2022, he added.
LIC’s assets under management (AUM) increased to Rs 44.34 trillion as on December 31, 2022, compared with Rs 40.12 trillion in the year-ago period, registering an increase of 10.5 per cent.
Its shares closed 0.53 per cent higher on the BSE on Thursday at Rs 613.35 apiece.