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State-run insurance giant Life Insurance Corporation of India (LIC) reported a surplus of Rs 1,803.05 crore in FY15, up 10.33 per cent over the previous year. The surplus in policy holders’ accounts was after paying an interim bonus of Rs 1,899.75 crore to its policyholders.
Life Insurance Corporation of India has also proposed the entire surplus amount be paid as its final dividend to the shareholder — the Union government. The LIC board approved the audited financial results in its meeting on June 9, the insurer said in a public advertisement.
LIC’s surplus was pushed up by a higher income from investments and lower commissions and operating expenses. Premium income grew marginally by 1.15 per cent to Rs 2.39 lakh crore.
While non-linked business recorded 3.8 per cent growth, linked life policies recorded a lower premium income declining from Rs 1,885 crore to Rs 1,314.66 crore.
‘Interest, dividend and rental income’ jumped by 14.7 per cent to Rs 1.35 lakh crore. In the previous year, LIC earned Rs 1.18 lakh crore under this head.
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Profit-booking on investments was the next major contributor, rising Rs 3,908 crore or 16.75 per cent over the previous year to Rs 27,234 crore. Bulk of this income came from non-linked or traditional life policies. These policies accounted for 75 per cent of the interest and dividend income and 66 per cent of the profit on sale/redemption, almost in line with the previous year. LIC had a good year booking significant profits on scrips such as State Bank of India, Business Standard had reported on Monday.
Loss on sale and redemption of investments also increased significantly, but on a low base. Such losses totalled Rs 1,051 crore, up 62 per cent from FY14.
LIC cut down its expenses on commission by Rs 1,589.19 crore or 9.5 per cent. Its operating expenses also fell by 5.8 per cent to Rs 22,392 crore.
Life Insurance Corporation cut its provision for doubtful debts to Rs 932 crore, from Rs 1571.35 crore in FY14.
However, the insurer made significantly higher provision for taxation at Rs 3,698 crore, up 46 per cent from the previous year.
