Life Insurance Corporation of India (LIC) on Wednesday said the exercise to determine the Indian embedded value (IEV) by March 31, 2022 will take some more time to complete. It expects completion before July 15. Earlier, LIC had expected to determine the embedded price by June 30.
In our update on stock exchanges today, LIC It is informed that the exercise to determine the Indian Embedded Value (IEV) may take some more time to be completed by March 31, 2022.
“Once completed and after necessary approvals, necessary public disclosure in this regard will be made,” LIC said.
LIC is expected to give a public disclosure on the embedded value by July 15, 2022.
An embedded value is a common valuation indicator indicating a life insurance The estimated value of the company to the shareholders. EV is calculated by adding the present value of the insurer’s future profits to the net asset value (NAV).
It needs to be noted that the life insurer’s future income is the premium that they receive from the policyholders, whereas future expenses are the claims they pay to the policyholders along with other expenses. The difference between future income and outgoing income combined with income and future gains from issuing statutory reserves.
Meanwhile, NAV is the difference between a company’s total assets and liabilities.
LIC shares closed on BSE 678.90 each, an increase of 2.34%. The market valuation of LIC at the closing price is 4,29,404.09 crores.
On 30th May, LIC announced an increase of 6.1% in the net premium income 4,27,419 crore in FY22 as compared to Rs. 4,02,844 crore in the previous financial year ended March 31, 2021. Net profit in FY 22 was 4,043.12 crore as against 2,900.57 crore in FY21 – registering a growth of 39.39%.
Meanwhile, the return on investment on policyholders’ money excluding unrealized gains stood at 8.55% in FY12, as against 8.69% in FY2011.
Notably, LIC was able to increase its marketing activities and ended the year with a significant growth of 18.70% in individual first year premium income in the quarter January to March 2022 as compared to the corresponding quarter of the previous year. LIC registered a growth of 6.31% in the Weighted Received Premium (WRP) for FY22. LIC completed 2.17 crore new policies during the year with a growth of 3.56% over the previous year.
As on March 31, 2022, LIC’s market share in individual policies was 74.60 per cent. In group business, LIC’s market share was 89.07% by number of policies/plans and 76.16% by first year premium. LIC has a market share of 63.25 per cent in the overall first year premium income.