LIC’s embedded value at Rs 5.44 trillion in September-end

The country’s largest insurance company Life Insurance Corporation of India’s (LIC) Embedded Value (EV) was at Rs 5.44 trillion at the end of September 2022, as compared to Rs 5.39 trillion at the end of September last year.

LIC had reported an Embedded Value of Rs 5.41 trillion at the end of March this year.

Also Read: LIC profit zooms 11x; net premium up 27%

Backed by Rs 14,271.80 crore transfer from non-participating policyholders’ accounts to shareholders’ accounts and Rs 6,795 crore other income, the insurer has registered an 11 times year-on-year jump in its standalone net profit at Rs 15,952 crore for the second quarter this tax. “The amount of Rs 14,271.80 crore comprised of Rs 5,580.72 crore for the quarter ended September 30, 2022 besides Rs 4,148.78 crore and Rs 4,542.31 crore for the preceding two quarters, respectively,” LIC said in a release. Other income included interest amounting to Rs 6626.98 crore received during Q2FY23 towards refund of income tax for the earlier financial years.

The company’s net premium income rose to Rs 1.32 trillion in the second quarter, up 27% yoy from Rs 1.04 trillion in the year-ago period. The total income in the quarter under review stood at Rs 2.22 trillion as against Rs 1.85 trillion in the second quarter last fiscal. For the half year ended September 30, 2022, LIC registered an increase of 23.87% in the total premium income at Rs 2.30 trillion as compared to Rs 1.86 trillion for the half year ended September 30, 2021. Net profit for H1FY23 was Rs 16,635 crore as compared to Rs 1,437 crore for H1FY22.

Also Read: LIC to dip into non-par funds to boost dividend, Board decision soon

A total of 8.35 million policies were sold in the individual segment during H1FY23 thereby registering an increase of 13.55% over H1FY22 when 7.36 million policies were sold, the company said in the release. MR Kumar, chairperson, LIC, said, “The results signify our gradual and consistent move towards diversifying our product mix aimed at increasing the Non Par business share. In the Individual business, on an APE basis, the share of Non Par business has increased to 8.99% for the half year ended September 30th, 2022, as against 7.12% for full year ended March 31st, 2022.”

On an Annualized Premium Equivalent (APE) basis, the total premium was Rs 25,228 crore for H1FY23. Of this, Rs 14,643 crore (58.04%) was accounted for by the individual business, and Rs 10,585 crore (41.96%) by the group business. Within the individual business, the share of Par products on APE basis was 91.01% and balance 8.99% was due to Non Par products.

Kumar said the “philosophy of diversification” was visible in the company’s distribution channel mix where the share of new business premium being sourced from bancassurance and alternate channels had also increased. The Value of New Business (VNB) for the six-month period ended September 30, 2022, was Rs 4,836 crore. The VNB margin for H1FY23 was 14.6% (Net) as compared to 9.3% (Net) for H1FY22.

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