Life Insurance Corporation of India (LIC) advanced 2.47% to Rs 628.50 after the state-run life insurer reported a standalone net profit of Rs 6,334.2 crore in Q3 FY23, steeply higher than Rs 234.91 crore recorded in Q3 FY22.
The insurer's total premium income rose 14.51% to Rs 1,11,787.60 crore in the quarter ended 31 December 2022 as against Rs 97,620.34 crore reported in the corresponding quarter previous year.
For 9 Months FY23, the company's net profit surged to Rs 22,969.58 crore in 9M FY23 from Rs 1,671.57 crore posted in 9M FY22. Total premium income jumped 20.65% year on year to Rs 3,42,243.51 crore in 9M FY23.
The life insurer said that the current period profit has increased due to transfer of an amount of Rs 19,941.60 crore (net of tax), pertaining to the accretions on the available solvency margin, from non par to shareholders account. The amount of Rs 19,941.60 crore comprises of Rs 5,669.79 crore for the quarter ended 31 December 2022 besides Rs 5,580.72 crore, Rs 4,148.78 crore and Rs 4,542.31 crore for the preceding three quarters respectively.
LIC stated that the business momentum continues to be strong for the company and as a result the overall market share by first year premium income (as per IRDAI) was 65.38% for the nine month ended 31 December 2022 as compared to 61.40% for the corresponding period last year.
On an annualised premium equivalent (APE) basis the total premium was Rs 37,545 crore for the nine months ending 31 December 2022. Of this Rs 23,419 crore (62.38%) was accounted for by the Individual business and Rs 14,126 crore (37.62%) by the Group business. Within the Individual business, the share of par products on APE basis was 90.55% and balance 9.45% was due to non par products.
The insurance behemoth sold 1.29 crore policies in the individual segment in 9M FY23, registering an increase of 1.92% from 1.26 crore policies sold in the same period last year.
For 9 Months FY23, the insurer said that there was an improvement in persistency ratio on premium basis for both 13th month and 61st month at 77.61% and 62.73% respectively. For the period ended 31 December 2021 the comparable persistency by premium for 13th and 61st month was 76.84% and 61.91% respectively.
Meanwhile, the persistency ratio on number of policies basis for the 13th month and 61st month were 64.99% and 51.42% respectively. The comparable persistency ratios for the corresponding nine months ending 31 December 2021 were 65.47% and 50.85% respectively.
LIC's asset under management increased to Rs 44.34 lakh crore as on 31 December 2022 as compared to Rs 40.12 lakh crore on 31 December 2021, registering an increase of 10.54%.
The yield on investments on policyholders funds excluding unrealized gains was 8.58% for 9M FY23 as against 8.76% reported in 9M FY22.
The Value of New Business (VNB) (Gross) for the nine months ending 31 December 2022 was 7,187 crore and the Gross VNB margin was 19.1% while the net VNB margins for 9M FY23 stood at 14.6%.
The Gross VNB of the Individual business was Rs 4,683 crore and for Group business was Rs 2,504 crore for nine months ending 31 December 2022. The Gross VNB margins for the Individual business and Group business were 20% and 17.7% respectively. Within the Individual business, the Par business, Non-par business (including Linked Business) had Gross VNB margins of 14.4% and 73.5% respectively.
M.R. Kumar, chairperson of LIC said, We continue to remain focussed on creating a portfolio mix to optimise value for all stakeholders, and in that context, increasing the proportion of Non-par business in a consistent and profitable manner. In the Individual business, on an APE basis, the share of Non Par Business has increased to 9.45% for the nine months ended 31 December 2022, as against 7.12% for full year ended 31 March 2022.
Kumar further added, While the relative growth of various products within the Non-par bucket will vary within each quarter, we believe we are firmly on our way to achieving the target product mix changes. We think the market is showing signs of robust growth and we are confident of retaining and also growing our market share going forward.
LIC has been providing life insurance in India for more than 65 years and is the largest life insurer in the country. Shares of LIC debuted on the bourses on 17 May 2022. The scrip was listed at Rs 867.20, representing an 8.62% discount to the issue price of Rs 949.
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