Life Insurance Corporation of India (LIC) reported a 466% year-on-year (YoY) increase in its standalone net profit for the January-March period of FY23 to Rs 13,421 crore.
“As per the board's approved policy on distribution of surplus, out of the total surplus of participating fund the corporation has transferred 92.5% (95% in FY 2021-22) for the current financial year i.e. FY2022-23 to the participating policyholders' fund and balance 7.5% (5% in FY 2021-22) to the shareholders fund,” LIC said in a stock exchange filing.
For the full financial year 2022-23, the insurance behemoth reported a net profit of Rs 36,397 crore as compared to Rs 4,043 crore during the previous financial year.
“The profit for 2022-23 comprises an amount of Rs 27,240.75 crore (net of tax), which is pertaining to the accretion on the available solvency margin, transferred from non-par fund to shareholders account,” LIC said in a statement.
The net premium income of the corporation declined 8.3% to Rs 1.31 trillion during the reporting period, while the first-year premium income registered a decline of 12.3% to Rs 12,811 crore.
On an annualised premium equivalent (APE) basis, the total premium was Rs 56,682 crore for FY23, as compared to Rs 50,390 crore in the previous year, representing growth of 12.49% YoY.
The value of new business (VNB) margin for 2022-23 was 16.2% (net) as compared to 15.1% (net) in the previous year.
“The gross VNB of the individual business was Rs 7,571 crore and for group business was Rs 3,982 crore for the year ended March 31, 2023. Gross VNB margins for the individual and group business were 19.6% and 22.1%, respectively,” LIC said.
Within the individual business, the par business, and non-par business (including linked business) had Gross VNB margins of 14.6% and 70.4%, respectively.
The board of LIC recommended a final dividend of Rs 3 per share with a face value of Rs 10 for the year ended March 2023.
“Our efforts towards enhancing the share of non-par products in the overall product mix are bearing fruits,” said Siddhartha Mohanty, chairperson, LIC. “With the increase in profit, net VNB margin and IEV we are well positioned to continue our growth journey,” he added.
The Indian embedded value (IEV) of LIC was Rs 5.82 trillion as on March 31, 2023, as compared to Rs 5.41 trillion as on March 31, 2022, and Rs 5.44 trillion as on September 30,2022. IEV recorded YoY growth of 7.53%.
LIC sold 2.04 crore policies in the individual segment during FY23. Income from investments during the quarter grew marginally to Rs 67,846 crore, from Rs 67,498 crore.
During the year, an estimated additional provision of Rs 11,543 crore has been made for employee retirement benefits due to wage revision, which became due from Aug 1, 2022, LIC said.
The solvency ratio was 1.87 at the end March 2023 as compared to 1.85 at the end of December 2022 and March 2022. For the year ended March 31, 2023, the persistency ratios, on a premium basis, for the 13th month and 61st month were 77.09%, and 61.80%, respectively. The comparable persistency ratios for the corresponding period were 75.59% and 61%, respectively.
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