he net profit of Life Insurance Corporation of India(LIC) rose a mere 2.5% year-on-year(y-o-y) in January-March due to a sharp rise in expenses of management.
The company posted a net profit of Rs 13,763 crore in the quarter under review, up nearly 46% quarter-on-quarter.
The company’s board has recommended a final dividend of Rs 6 per share in 2023-24. Earlier during the year, an interim dividend of Rs 4 per share was declared and paid to shareholders of the corporation. Therefore the total of interim and recommended final dividend aggregates to Rs 10 per share.
The latest dividend is LIC’s highest-ever payout to its shareholders.
The company’s expenses of management rose Rs 24,709 crore in the March quarter from Rs 21,435 crore a year ago due to the impact of the wage revision. In March, the government had notified the wage revision of employees effective from August 1, 2022.
In the notes to account accompanying the result, the company said that additional pension liability due to wage revision to employees of the corporation amounts to Rs. 6,306 crore.
The expenses of management ratio stood at 16.20% in the March quarter.
The life insurer’s net premium income rose to Rs 1.5 trillion in the March quarter from Rs 1.3 trillion a year ago. The first year premium rose to Rs 13,810 crore in the March quarter from Rs 12,811 crore a year ago. Renewal premium rose to Rs 61,364 crore in the quarter under review from Rs 43, 144 crore a year ago.
LIC continues to be the market leader by market share in Indian life insurance business with overall market share of 58.87%, the company said in a press release. LIC had a market share of 38.4% in the individual business and 72.30% in group business.
The total premium income rose to Rs 4.8 trillion in 2023-24(April-March) from Rs 4.7 trillion a year ago. The total individual business premium rose to Rs 3 trillion from Rs 2.9 trillion a year ago. The group business total premium income fell to Rs 1.7 trillion from Rs 1.8 trillion a year ago.
The value of new business (VNB) rose to Rs 9,583 crore in 2023-24 from Rs 9,156 crore a year ago. The net VNB margin rose 60 basis points (bps) to 16.80% as on March 31. The solvency ratio rose to 1.98 as on March 31 from 1.87 a year ago.
The company’s assets under management rose to Rs 51.2 trillion as on March 31 from nearly Rs 44 trillion a year ago. The amount of bonus allocated to participating policy holders was at nearly Rs 52,956 crore in 2023-24, higher than Rs 49,440 crore a year ago.
“We intend to focus our strategic interventions to maximize our market share across categories. At the same time, our sharp focus on various parameters which create superior value for all stakeholders shall continue, as demonstrated,” Siddhartha Mohanty, chairperson, Life Insurance Corporation of India said.
“We look forward to this current year as the one in which our topline growth trajectory will be back in focus,” he added.