Life Insurance Corporation of India (LIC) reported a standalone net profit of Rs 682.89 crore in Q1 FY23, steeply higher than Rs 2.94 crore recorded in Q1 FY22.
The insurer's total premium income surged 20.35% to Rs 98,351.76 crore in the quarter ended 30 June 2022 as against Rs 81,721.42 crore posted in the corresponding quarter previous year.
The life insurer said that the marketing activity picked up pace, overall business momentum was strong for the firm and as a result the overall market share by First Year Premium income (as per IRDAI) increased to 65.42% for the quarter ended 30 June 2022 as compared to full year market share of 63.25% for FY2021-22. The market share by First Year Premium Income for the quarter ended 30 June 2021 was 67.52%, the company stated.
Also, the market share of LIC in individual First Year Premium Income (as per IRDAI) stood at 43.86% while the group First Year Premium Income (as per IRDAI) was at 76.43% during the period under review.
The insurance behemoth sold 36.81 lakh policies in the individual segment in Q1 FY23, recording a growth of 59.56% from 23.07 lakh policies sold in the corresponding quarter previous year.
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On an annualised premium equivalent (APE) basis the total premium was Rs 10,270 crore in Q1 FY23. Of this 62.80% (Rs 6,450 crore) was accounted for by the Individual business and 37.20% (Rs 3,819 crore) by the Group Business. Within the Individual business the share of Par products on APE basis was 92.25% and balance 7.75% was due to Non par products.
During the quarter, the insurer's persistency ratios on premium basis for the 13th month, 25th month, 37th month, 49th month and 61st month were 75.75.%, 67.78%, 64.34%,60.82% and 58.99% respectively. The comparable persistency ratios for the corresponding quarter ended 30 June 2021 were 72.49%, 66.53%, 62.62%, 59.87, 56%, respectively.
Meanwhile, the persistency ratios on number of policies basis for the 13th month, 25th month, 37th month, 49th month and 61st month were 63.85.%, 56.04%, 51.71%, 48.96% and 47.51%, respectively. The comparable persistency ratios for the quarter ended 30 June 2021 were 61.26%, 53.94.%, 50.58%, 48.22, 44.87% respectively. The persistency has improved across the board both on premium and policies basis, as compared to same period last year, the insurance company stated.
LIC's asset under management increased to Rs 41.02 lakh crore as on 30 June 2022 as compared to Rs 38.13 lakh crore on 30 June 2021, registering an increase of 7.57%.
The yield on investments on policyholders funds excluding unrealized gains was 7.74% in Q1 FY23 as compared to 8.39 % reported in Q1 FY22.
On the asset quality front, the net non-performing assets (NPAs) in the policyholders fund declined to Rs 9 crore in the first quarter as against Rs 194 crore posted in the same period a year ago.
The gross non-performing assets (NPA) reduced to Rs 26,619.67 crore in Q1 FY23 from Rs 34,884.80 crore reported in Q1 FY22 and gross NPA ratio decreased to 5.84% in Q1 FY23 as against 7.77% posted in Q1 FY22. As against gross NPA, LIC has made NPA provision of Rs 26,611 crore in quarter ended 30 June 2022.
Meanwhile, the solvency ratio stood at 188.54% in Q1 FY23 as against 173.34% recorded in the corresponding quarter last year.
The value of new business (VNB) on gross basis, stood at Rs 1,861 crore in Q1 FY23. The net VNB margins for the period ended 30 June 2022 was at 13.6%. The gross VNB of the Individual business was Rs 1,277 crore and for Group business was Rs 583 crore for quarter ended 30 June 2022. The gross VNB margins for the Individual and Group business were 19.80% and 15.26% respectively. Within the Individual business, the Par business, Non Par business (including Linked business) had gross VNB margins of 14.38% and 84.20% respectively.
As at end of 30 June 2022, LIC had agency strength at 1.33 million, as compared to 1.34 million as on 30 June 2021. The percentage of its agents working in rural areas is 48 % whereas the remaining 52% operate in urban areas.
M.R. Kumar, chairperson of LIC said, "As the Covid situation normalises, we are seeing a larger activity on the ground, therefore bringing us back closer to our model of having feet on street and continuous in person engagement with our customers. While the growth numbers are very robust for the first quarter as seen in comparison to the same quarter of FY 2021-22, we are aware that the Q1 of the previous year, FY 2021-22 was impacted by a very tough second wave of Covid. However, the trajectory seems upwards for sure and we are looking at increased business volumes as is evident in our market share in the year to date since January 2022. Finally, we are glad to inform that LIC has been now included in the Fortune 500 list of companies and is placed at number 98 in the list. With this ranking, LIC is the top ranked Indian company on the Fortune 500 list."
LIC has been providing life insurance in India for more than 65 years and is the largest life insurer in the country. Shares of LIC debuted on the bourses on 17 May 2022. The scrip was listed at Rs 867.20, representing an 8.62% discount to the issue price of Rs 949.
Shares of LIC were down 0.03% to settle at Rs 682.15 on Friday, 12 August 2022.
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