LIC profit declines 17% in Q4, assets increase
MUMBAI: Life Insurance Corp. of India (LIC) on Monday said its March quarter profit fell 17% from a year earlier in the insurer’s first earnings release as a publicly traded company.
India’s largest insurer, which was listed at a discount two weeks ago and had been slipping ever since, said quarterly profit fell to ₹2,409.39 crore from ₹2,917.33 crore. However, for FY22 as a whole, it managed to report an almost 40% growth in profit at ₹4,124.7 crore from ₹2,947.13 crore in FY21.
The board of LIC proposed a dividend of ₹1.50 per share for FY22, subject to shareholders’ approval at its upcoming annual general meeting.
Net premium income in the fourth quarter rose to ₹1.44 trillion from ₹1.22 trillion a year earlier. In FY22, LIC recorded a total net premium income of ₹4.29 trillion. LIC said its asset base grew 12% to ₹41.83 lakh crore in FY22 from ₹37.46 lakh crore in FY21.
On the back of strong growth both in first-year premium and renewal premium, LIC’S total income for the March quarter increased to ₹2.12 lakh crore from ₹1.9 lakh crore the year earlier. Income in FY22 rose to ₹7.24 lakh crore from ₹7.03 lakh crore in the previous year.
LIC, India’s largest institutional investor, recorded marginal growth in net income from investments at ₹2.94 lakh crore in the year ended March 31 against ₹2.85 lakh crore in the previous year.
During the year, LIC’S commission payments to agents rose to ₹23,305.79 crore from ₹22,358.16 crore in FY21. However, since its ‘other operating expenses’—primarily, expenses towards its non-insurance subsidiary IDBI Bank—more than halved to ₹8,673.50 crore from the previous year, total expenses fell to ₹62,326 crore for FY22 from ₹70,955 crore in the previous year.
Lower expenses may positively impact LIC’S growth prospects since insurance is a cash-guzzling business.
LIC’S shares rose 1.89% to ₹837.05 on BSE on Monday, in line with the benchmark Sensex index’s 1.90% gain. However, its shares are still 15% below their issue price of ₹949.
The earnings were announced after market hours.
LIC said since the onset of the pandemic, it experienced an increase in death claims, including claims due to the covid-19 pandemic. The additional death strain, and its impact on the policy liabilities and solvency, are being closely monitored and being considered in its reserves, the insurer said.