LIC sees 20% decline in death claims in Q1 FY23 as Covid impact ebbs

Insurance behemoth LIC witnessed a decline of nearly 20 per cent in death claims in the first quarter of this fiscal with the COVID impact seen to be ebbing, though the amount is still higher than pre-2020 levels, officials said.

In the June quarter of the previous fiscal, settlement of death claims was to the tune of Rs 7,111 crore, which for Q1 of this year was Rs 5,743 crore, LIC Chairman M R Kumar said in a post-earnings call with analysts.

"So there is quite a decrease, and it's quite obvious that whatever decrease was there based on COVID... going away now, Q1 to Q1 of the previous year," Kumar said.

The claim rates had been very stable before the pandemic, said Dinesh Pant, Executive Director and Appointed Actuary, Life Insurance Corporation (LIC).

He added that there was a spike in claims in the last two years due to COVID.

"Now, from the current quarter (ending September 30, 2022), we see it settling down towards more normal. It is still not back to pre-2020 figures because we would appreciate that the effects will take some time and there will be some IBNR (Incurred But Not Reported) cases which will get reported late also," Pant said.

The official said these issues seem to be settling down now and the COVID effect seems to be less threatening.

"So we are optimistic that over the next year or so, this should settle down to the pre-COVID level," Pant said.

For Q1 FY23, LIC's net profit jumped to Rs 682.88 crore as against Rs 2.94 crore in the year-ago period on the back of record premium income.