On November 10, Life Insurance Corporation (LIC) of India disclosed a 50 percent decline in net profit, reaching Rs 7,925 crore for the quarter concluding on September 30, 2023, compared to Rs 15,952 crore in the corresponding period last year. The insurer clarified that changes in its accounting policy in September 2022, specifically in the transfer of amounts (Net of Tax), render year-on-year profit comparisons invalid.
The press release highlighted a transfer of Rs 13,768 crore (net of tax) for the six months concluding on September 30, 2023, impacting Q2FY24 (Rs 6,277 crore) and Q1FY24 (Rs 7,491 crore). Consequently, the profit for the quarter ending on September 30, 2023, is not comparable to the previous year.
LIC’s net premium income saw a 19 percent decrease, falling to Rs 1.07 lakh crore in the current quarter from Rs 1.32 lakh crore in the same period last year. Notably, the insurer’s gross non-performing assets (GNPAs) dropped to 2.43 percent from 5.60 percent, while net NPAs remained unchanged year-on-year.
The value of new business (VNB) for the six-month period ending September 30, 2023, totaled Rs 3,304 crore, down from Rs 3,677 crore in the same period last year, with a flat net VNB margin of 14.6 percent. Siddhartha Mohanty, Chairperson, attributed the impact on VNB margins to a realignment of products, while Dinesh Pant, Executive Director, pointed to competition and rate revisions affecting margins.
Income from investments grew to Rs 93,942 crore from Rs 84,103 crore last year. The solvency ratio slightly improved from 1.88 percent to 1.90 percent in Q2FY24. The first-year premium increased to Rs 9,988 crore from Rs 9,142 crore, and net commission for the quarter rose to Rs 6,077 crore from Rs 5,807 crore.
Group business total premium income for H1FY24 fell to Rs 70,977 crore from Rs 1.02 lakh crore in the corresponding period last year. Mohanty expressed confidence in the group business’s future growth, while Pant anticipated improvements in cyclically affected business.
LIC’s assets under management (AUM) increased to Rs 47.43 lakh crore, a 10.47 percent rise from Rs 42.93 lakh crore last year. The stock closed at Rs 610.55 on BSE, marking a 0.68 percent decline from the previous close.