Life Insurance Corporation of India (LIC) has reported a net profit of Rs 7,925 crore for the September quarter, a decrease from Rs 15,952 crore in the year-ago period, as the insurer’s income declined. LIC’s net premium income eased to Rs 1,07,397 crore in the second quarter of the current fiscal, down from Rs 1,32,631.72 crore in the year-ago period. The first-year premium for the reporting quarter increased to Rs 9,988 crore, compared to Rs 9,125 crore in the same period last year.
LIC mentioned that the latest quarterly numbers are not directly comparable with the year-ago quarter due to changes in its accounting policy related to the transfer of amounts pertaining to the available solvency margin. LIC’s total income declined to Rs 2,01,587 crore in the quarter, compared to Rs 2,22,215 crore in the year-ago period.
The insurer’s net income from investments during the quarter rose to Rs 93,942 crore, an increase from Rs 84,104 crore in the same period of the previous fiscal. The solvency margin of LIC increased to 1.90 percent in the September quarter this year, up from 1.88 percent in the same quarter a year ago.
On the asset quality front, the gross non-performing assets ratio eased to 2.43 percent, down from 5.60 percent in the same period last year. During the first half of the financial year, LIC earned its highest-ever half-yearly profit after tax at Rs 17,469 crore, compared to Rs 16,635 crore in the same period a year ago.
New business premium income during the first half increased marginally to Rs 25,184 crore, up from Rs 24,535 crore in the same period of the previous fiscal. Total premium also rose slightly to Rs 1,34,783 crore, compared to Rs 1,27,738 crore in the year-ago period.
Siddhartha Mohanty, Chairman of LIC, mentioned, “The current VNB (value of new business) margins are an indicator of our initiatives delivering the objective of maintaining profitability as we change direction.” He added that LIC is conscious of market dynamics in certain parts of the business and is working toward profit-oriented consolidation.
LIC’s distribution mix has become more diversified with an increase in the share of bancassurance and alternative channels. The company is in discussions with two more banks for a tie-up.
The recent changes and initiatives taken by LIC reflect a directional change aimed at enhancing the share of non-participating products in its overall individual business.
