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Informist, Thursday, Aug 8, 2024

 

--LIC Apr-Jun net profit 104.61 bln rupees vs 95.44 bln 

--LIC Apr-Jun net premium income 1.138 trln rupees vs 983.63 bln 

--LIC: Solvency ratio at 1.99 times as on Jun 30 

--LIC: Value of new business 16.1 bln rupees Apr-Jun, up 23.7% YoY 

--LIC: 13th month persistency at 72.35% Jun 30 vs 71.86% a qtr ago 

--LIC: AUM at 53.59 trln rupees as on Jun 30, up 16.2% on year 

--Govt will take call at appropriate time regarding divestment 

--LIC: In talks with bks to start fwd-rate agreement trades in near-term 

--LIC: Exploring picking up stake in standalone health insurance co 

--LIC: Expect to see expense ratio improving in coming quarters

--LIC: Growth in non-par segment has come from savings segment 

--LIC on surrender value regulations: Trying to chart our way out 

--LIC: Focussing on increasing non-participating product segment 
--LIC: Main focus is on growth of value of new business 

 

MUMBAI – Life Insurance Corp of India's net profit increased 9.6% on year to 104.61 bln rupees for the quarter ended June, due to rise in premiums. The net premium income of the life insurance company crossed the 1-trln-rupee mark in Apr-Jun.

 

Net interest income for Apr-Jun stood at 1.14 trln rupees, higher than 983.63 bln rupees reported a year ago. The total premium income increased by 15.66% on year to 1.14 trln rupees

 

The solvency ratio of the country's largest life insurer stood at 1.99 times as on Jun 30, higher than the regulatory requirement of 1.50 times. The metric was at 1.89 times in the year-ago period.

 

In terms of annualised premium, the 13th month persistency ratio, which tracks how long customers stay with their policies, fell to 72.35% in Apr-Jun from 75.10% a year ago, according to the exchange filing. The 61st month persistency ratio was 58.41%, lower than 59.25% a year ago, according to an exchange filing.

 

The value of new business for the quarter ended June was 16.10 bln rupees, up 23.66% on year. The net value of new business, or VNB margin, for the quarter ended June increased by 20 basis points to 13.9% as compared to 13.7% as reported a year ago. The life insurer is focussing on improving the value of new business going forward, and they also aim to increase the VNB margin to 20% from the current levels in 2-3 years, the management of the company said in a post-earnings call.

 

As per the press release issued by the company, the total annualised premium equivalent, including individual and group, increased by 21.3% on year to 115.60 bln rupees in the reporting quarter.

 

The product mix of individual annualised premium equivalent, saw a rise towards non-participating products. The share of non-participating product increased to 23.9% as on Jun 30 from 10.22% a year ago, while the share of participating products fell to 76.06% from 89.78% a year ago.

 

The life insurance company showed a rise of 16.2% on year in its assets under management to 53.59 trln rupees as on Jun 30, the company said in its press release. The overall expense ratio for the quarter ended June improved to 11.87% as compared to 12.85% reported a year ago. The company expects the ratio to continue to see improvement going forward.

 

When asked about media reports regarding the government planning to divest from the life insurance company, the management said, "Actually, the government will take a call. We have no such information, but the government will take a call at the appropriate time."

 

On the issue of using the forward rate agreement route, the management said that they have already got a policy approved and will soon start with it. "We are already tied up with the banking partners also in this area," the management said.

 

Separately, when asked about the impact of the surrender values on the life insurance company, "We are trying to chart our way out, how to proceed about it, how to implement it. So we will come up to as per the regulations, whatever will be the timeline, we will engage with the regulator and industry will also engage with the regulator, and we will find out the best way for implementation of the requirements," management said.

 

Previously, the life insurance company had shown interest in venturing into the health insurance space. In the post-earnings call, the management said that they are awaiting the guidelines on the composite licence. However, for now, they want to explore the possibilities of holding a majority stake in a standalone health insurance company. 

 

Today, the shares of LIC closed 0.2% higher at 1,125.60 rupees on the National Stock Exchange.  End

 

Reported by Kshipra Petkar

Edited by Deepshikha Bhardwaj

 

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