India’s largest insurer, which was listed at a discount two weeks ago and has been slipping since, said quarterly profit fell 2,409.39 crore from 2,917.33 crore. However, for FY22 as a whole, the insurer reported a 40% increase in profit 4,124.7 crore from 2,947.13 crore in the previous year.
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LIC’s board proposes dividend of 1.50 per share for the fiscal year 2012, subject to the approval of the shareholders at its ensuing Annual General Meeting.
Net premium income up in the fourth quarter from 1.44 trillion 1.22 trillion a year ago. In FY22, LIC introduced . recorded total net premium income of 4.29 trillion. LIC said its asset base grew by 12% 41.83 trillion in FY 2012. From 37.46 trillion in FY 2011.
LIC’s net income for the March quarter has grown on the back of strong growth in both first year premium and renewal premium. to 2.12 trillion 1.9 trillion a year ago. Earnings up in FY22 from 7.24 trillion 7.03 trillion in the previous year.
India’s largest institutional investor LIC reports marginal growth in net income from investments 2.94 trillion in the year ended March 31 2.85 trillion in the previous year.
During the year, LIC’s commission payment to agents increased 23,305.79 crore from 22,358.16 crore in FY 2011. However, since its ‘other operating expenses’ – primarily, expenses towards its non-insurance subsidiary IDBI Bank – more than half 8,673.50 crore from the previous year, total expenditure fell 62,326 crore for FY22 from 70,955 crore in the previous year.
Lower expenses can positively impact the growth prospects of LIC as insurance is a cash consuming business.
LIC shares rose 1.89% 837.05 on the BSE on Monday, compared with a gain of 1.90% over the benchmark Sensex index. However, its shares are still down 15% from their issue price 949. Earnings announced after market hours.
LIC said that since the start of the pandemic, it experienced a surge in death claims, including claims due to the COVID-19 pandemic. The insurer said the additional death strain, and its impact on policy liabilities and solvency, are being closely monitored and considered in its reserves.
“To meet the solvency requirements of all stakeholders, the Corporation has taken a rational approach to realignment of assets and considers those assets which are easily marketable, having good market value and at their book value and liquidity. With appreciation is for longer duration in nature and less risk,” LIC said in a statement.
On April 29, Mint reported that LIC is sitting at a mark-to-market loss. 6,028 crore should be accounted for in its income statement by the end of this financial year.
Losses arising from investments in certain illiquid securities are yet to be reflected in the profit and loss statement of the insurer. The insurance regulator has given LIC time till January 31, 2023 to ensure that the value of loss-making investments is reflected in its income statement.
LIC had said in its share sale prospectus that out of these Incorrectly priced insurance policies, papers of debentures worth Rs 11,264.6 crore 5,350.6 crore are non-performing assets for which full provision has been made at an amortization cost, and if this transaction is shown in the balance sheet, the insurer will have to show the loss 6,028.15 crore.
LIC has a huge amount of assets, and analysts said it can comfortably address 6,028 crore by selling some of its investments, but warned of a possible sale of assets to make up for the loss, which could impact the returns of policyholders. Hence, this has to be done so that the policyholders are not adversely affected.
According to data reviewed by Mint, the country’s largest insurance provider sold 21.7 million insurance policies in the year ended March 31, a 3.54% increase over the previous fiscal.
The life insurance industry sold a total of 29.15 million policies in FY12, of which 74 million were in March, with the lion’s share going to LIC. LIC’s IPO, the biggest ever in India, closed with nearly three times subscriptions, rallied by retail and institutional buyers, but participation from foreign investors remained muted.
The government sold over 221.3 million shares or a 3.5% stake in the insurer through an initial share sale.