Life Insurance Corporation of India (LIC) rallied 5.21% to Rs 660.75 after the state-run life insurer reported a standalone net profit of Rs 15,952.49 crore in Q2 FY23, steeply higher than Rs 1,433.71 crore posted in Q2 FY22.
The insurer's total premium income jumped 26.62% to Rs 1,32,104.14 crore in the quarter ended 30 September 2022 as against Rs 1,04,331.53 crore reported in the corresponding quarter previous year.
On half-yearly basis, the company' standalone net profit surged to Rs 16,635.38 crore in H1 FY23 from Rs 1,436.66 crore recorded in H1 FY22. Total Premium Income surged 23.87% year on year to Rs 2,30,456 crore in H1 FY23.
The life insurer said that the current period profit has increased due to transfer of an amount of Rs 14,271.80 crore (net of tax), pertaining to the accretions on the available solvency margin, from non par to shareholders account. The amount of Rs 14,271.80 crore comprises of Rs 5,580.72 crore for the quarter ended 30 September 2022 besides Rs 4,148.78 crore and Rs 4,542.31 crore for the preceding two quarters respectively.
The company said that the business momentum continues to be strong for LIC and as a result the overall market share by First Year Premium Income (as per IRDAI) increased to 68.25% for the half year ended 30 September 2022 as compared to full year market share of 63.25% for FY 2021-22.
On an annualised premium equivalent (APE) basis the total premium was Rs 25,228 crore for the six month period ended 30 September 2022. Of this Rs 14,643 crore (58.04%) was accounted for by the Individual Business and Rs 10,585 crore (41.96%) by the Group business. Within the Individual business, the share of Par products on APE basis was 91.01% and balance 8.99% was due to Non Par products.
The insurance behemoth sold 83,59,029 policies in the individual segment in H1 FY23, recording a growth of 13.55% from 73,61,410 policies sold in the same period last year.
For the half year ended 30 September 2022, the insurer's persistency ratios on premium basis for the 13th month and 61st month were were 77.62% and 62.77% respectively. The comparable persistency ratios for the corresponding half year ending 30 September 2021 were 78.77% and 60.57% respectively.
Meanwhile, the persistency ratio on number of policies basis for the 13th month and 61st month were 65.21% and 51.61% respectively. The comparable persistency ratios for the corresponding half year ended 30 September 2021 were 67.69%and 49.38% respectively. Therefore the persistency has improved both on premium and number of policies basis for the 61st month.
LIC's asset under management (AUM) increased to Rs 42,93,778 crore as on 30 September 2022 as compared to Rs 39,50,633 crore on 30 September 2021, registering an increase of 8.69% year on year.
The yield on investments on policyholders funds excluding unrealized gains was 8.32% for H1 FY23 as against 8.62% for H1 FY22.
On the asset quality front, the net non-performing assets (NPAs) in the policyholders fund declined to Rs 12.72 crore in H1 FY23 as against Rs 191.56 crore posted in the same period a year ago.
The gross non-performing assets (NPA) reduced to Rs 26,111.02 crore in H1 FY23 from Rs 28,928.83 crore reported in H1 FY22 and gross NPA ratio decreased to 5.60% in Q1 FY23 as against 6.57% posted in Q1 FY22.
The value of new business (VNB) (Gross) for the six month period ended 30 September 2022 was 4,836 crore. The Gross VNB margins for the Individual and Group business were 20.3% and 17.6% respectively. The Gross VNB of the Individual business was Rs 2,974 crore and for Group business was Rs 1,862 crore for half year ended 30 September 2022. Within the Individual business, the Par business, Non Par business (including Linked Business) had Gross VNB margins of 14.5% and 79.5%respectively.
The VNB margins for the HY FY23 were 14.6% (Net) as compared to 9.3% (Net) reported in H1 FY22.
The Indian Embedded Value (IEV) as on 30 September 2022 has been determined as Rs 5,44,291 crore as compared to Rs 5,39,686 crore as on 30 September 2021.
M.R. Kumar, chairperson of LIC said, The results signify our gradual and consistent move towards diversifying our product mix aimed at increasing the Non Par Business share. In the Individual business, on an APE basis, the share of Non Par Business has increased to 8.99% for the half year ended 30 September, 2022, as against 7.12% for full year ended 31 March 2022. The same philosophy of diversification is visible in our distribution channel mix where the share of New Business Premium being sourced from banca and alternate channels has also increased. We are committed to doing our best for all stakeholders 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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