LIC Q3 net profit drops 87.7% to Rs 26.35 mn; new premium revenue up 20%

Life Insurance Corporation of India (LIC) posted a net profit of Rs 26.35 million for the quarter ended December 31, 2017, which is an 87.7 per cent decrease from a net profit of Rs 215.9 million at the end of the same quarter in the previous financial year.  

The loss seems to be mainly on account of a large drop in the profits made from the sale or redemption of investments (shareholder's account). In the third quarter of FY17, profits on sale or redemption of investments stood at Rs 114.34 million. Whereas, in the third quarter of FY18, this fell to Rs 170,000.    

Premiums earned for the quarter ended December 31, 2017, grew by 10 per cent at Rs 758.9 billion, up from Rs 686.05 billion for the quarter ended December 31, 2016. Further, profits on sale or redemption of investments (policyholder's account) grew by 110 per cent to Rs 75.5 billion at the end of the third quarter of FY18, from Rs 35.95 billion at the end of the third quarter of FY17. 

New premium revenue for the third quarter of FY18 rose to Rs 680.3 billion, which is an increase of 20 per cent, up from Rs 565.7 billion in the same quarter of FY17. The net commission rose to Rs 47.4 billion for the quarter ended December 31, 2017, which is an increase of 26 per cent, up from Rs 37.4 billion in the same quarter in the previous financial year. 

The policy liabilities increased to Rs 24.76 trillion, up by 12 per cent, from Rs 21.86 trillion in the third quarter of FY17. Provisions for linked liabilities increased by five per cent to Rs 598 billion at the end of the third quarter of FY18.

Insurance reserves increased by 13 per cent, to stand at Rs 96.67 billion, for the third quarter of FY18, up from Rs 85 billion in the third quarter of FY17. Whereas, assets held in order to cover linked liabilities are up by eight per cent to Rs 924.3 billion at the end of the third quarter of FY18.

The number of claims at the end of the period was 19,266 for death, 697,986 for maturity, 952,913 for survival benefits, and 101,815 claims towards annuities or pensions.