Life Insurance Corporation (LIC), the country’s largest insurer, on Wednesday, announced its financial results for the fourth quarter that ended in March. The company reported a standalone net profit of Rs 13,428 crore, growing 466 per cent over the corresponding period in the last fiscal.
According to the government-owned insurers’ exchange filing, the standalone net profit for the Q4 of FY22 stood at Rs 2,371.5 crore. The sequential growth in profit was 112 per cent.
During the reporting quarter, LIC’s net premium income, however, declined by 8 per cent to Rs 1.31 lakh crore compared to Rs 1.43 lakh crore in the same period of the previous year. On sequential basis, the premium income increased by 17.9 per cent.
“The first year premium fell by 12.33 per cent on-year to Rs 12,811.2 crore, but the renewal premium increased by 6.8 per cent to Rs 76,009 crore compared to year-ago period,” the filing said.
LIC’s net commission rose by 5 per cent to Rs 8,428 crore for the last quarter. Additionally, the solvency ratio, a crucial measure of an insurer’s financial strength, improved to 1.87 at the end of the March quarter.
13th month persistency ratio, a measure of the number of policyholders who continue to pay premiums after the first year, stood at 70.16 per cent at the end of the fourth quarter. Although there was a slight dip from the previous quarter, LIC maintained a healthy persistency ratio, showcasing its ability to retain policyholders over the long term.
The 25th-month persistency ratio fell to 63.84 per cent in Q4 of FY23, from 68.23 per cent in the corresponding period last fiscal.
The government’s stake dilution of 3.5 per cent in Life Insurance Corporation of India (LIC) through its historic initial public offering (IPO) last year resulted in raising Rs 20,557 crore. However, the listing of LIC shares on the stock market has seen a significant decline in value, causing investors to incur losses of nearly Rs 2.5 lakh crore.
When LIC shares were listed on the Bombay Stock Exchange (BSE), they were priced at a discount of 8.62 per cent at Rs 867.20 per share, lower than the IPO issue price of Rs 949 per share. The government had sold over 22.13 crore shares, representing a 3.5 per cent stake in LIC through the IPO. The price range for the IPO was set at Rs 902-949 per share, but shares were ultimately allocated to investors at the upper end of the price band on May 12, 2022.