Life Insurance Corporation of India (LIC), a mammoth insurer, recently presented its financial results for the December quarter (Q3FY23). The insurer claims that because the premium income improved and it transferred ₹5,670 crores to its shareholders’ fund to strengthen its net worth, the net profit of the company rose to ₹8,334 crores in the third quarter.
In the same quarter of the last fiscal year, the world’s largest insurer reported a profit of ₹235 crores. The company saw a net profit of ₹15,952 crores for the period from July to September. In the three months from April to June, LIC posted a net profit of ₹682.9 crores. In the reporting quarter, LIC’s net premium revenue increased to 1.11 lakh crore, up 14.5% from ₹97,620 crores in the last quarter.
The company continues to work in a focused mode to build a portfolio mix to optimize value for all stakeholders, and in that context, extending the amount of Non-par business invariably and profitably, LIC Chairperson MR Kumar noted.
The first-year premium (new business premium), increased from 8,748.55 crores in the similar quarter of the last fiscal to 9,724.71 crores in the December quarter. Single premium went from 32,190 crores to 42,117 crores, a 31% increase.
Net gain on investments sold insurance and other sources.
Net investment income increased 11% YoY to 84,889 crores from 76,574 crores in the corresponding period last year. The insurer, which relies heavily on an army of agents, reported that the number of policies sold in the nine months that concluded on December 31, 2022, increased by as much as 2% YoY to more than 1 crore. More specifically, 1.29 crore policies were sold for the nine months ending December 31, 2022, a rise of 1.92 percent from over nine months ending December 31, 2021, after 1.26 crore policies were sold.
A bar of an insurer’s ability to service its long-term debt requirements, LIC’s solvency ratio increased from 1.77 to 1.85 from the earlier year. The company’s gross value of the new business (VNB), a crucial indicator of future growth that quantifies projected profit from new premiums, came in at 7,187 crores, with VNB margins of 19.1%.
In comparison to the December quarter of the earlier year, the operating expense ratio for the nine months ended December 2022 grew by 27 bps to 15.26% from 14.99%. Assets under management (AUM) for LIC increased by 10.54% YOY at the end of 2017 to reach 44.34 lakh crore from 40.12 lakh crore.
For the nine months that ended December 31, 2022, the total premium, calculated on an APE (annualized premium equivalent), was Rs 37,545 crore. Of this, the group business accounted for Rs 14,126 crore (37.62 percent), and the individual’s Rs 23,419 crore (62.38%).
In comparison to the nine months ending December 31, 2021, which had a PAT of Rs. 1,672 crores, the nine months ending December 31, 2022, had a PAT of Rs. 22,970 crores.
From its non-participating fund, LIC has transferred ₹5,670 crores to the shareholders’ fund. According to sources, the insurance giant planned to move about $22 billion from policyholder money into a fund designated to pay dividends or give bonus shares.
The head of the Adani Group will soon meet with the LIC Chairman.
The insurance has been under fire from the nation’s opposition political parties, who have been calling for a detailed probe about the claims made against the Adani Group by a short-seller located in the US. According to the LIC Chairman, he will shortly meet with the top managers of the Adani Group.
Since US-based short-seller Hindenburg Research convicted the Adani family of laundering money and stock manipulation, the Adani Group has been in a situation of panic. The research sounded alarmed over the corporations’ exorbitant levels of debt and valuations. According to Hindenburg, it has shorted derivatives and bonds traded outside of India by Adani. LIC reportedly spent more than $4 billion on the Adani group, according to reports.
The shares of the major insurer decreased 13% in January. Its 52-week high was 920 on May 17, 2022, and its 52-week low was 582.45 on February 1 of this year. On the BSE, LIC’s market value increased to 3.88 lakh crore.
The last call.
The insurance has insisted that its customers do not need to be concerned about the exposure to Adani enterprises despite investing more than $4 billion, or around 1% of the investments in control, in Adani Group companies. Before the release of the results, LIC shares on the BSE ended 0.53% higher at 613.35 per share. For the past few days, the stock has increased.
