Life Insurance Corporation (LIC) on Friday reported a multi-fold increase in net profits to Rs 682.88 crore for the quarter ending June compared to a profit of Rs 2.94 crore in Q1 FY22. It may be recalled that business activity in the country had come to a virtual standstill in the June 2021 quarter during the second wave of the Covid-19 pandemic.
Seen sequentially, LIC’s performance was less impressive as the insurer had posted profits of Rs 2,371.55 crore in the three months to March.
The total income in the quarter stood at Rs 1.68 trillion as against Rs 1.54 trillion in the year-ago period, LIC said. The total income stood at Rs 2.11 trillion in the March quarter.
The net premium income during Q1 FY23 at Rs 98,351.76 crore was about 20% higher y-o-y. On a sequential basis the net premium was lower by about 32%.
The first-year premium for the reporting quarter came in at Rs 7,429 crore as against Rs 5,088 crore in the year-ago period, the insurer said in an exchange filing.
“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,” LIC chairperson MR Kumar said.
“The product mix is heavily tilted towards participating businesess. Changing this is a big task for us and we have already started,” Kumar said.
Kumar added that with the stock market not doing well, LIC had refrained from too much profit booking. “Our equity investment has gone up by Rs 41,000 crore, we did make some purchases in the periods when markets were down,” Kumar said.
The chairperson observed that death claims had come down by about 19% year-on-year during the period. The LIC stock was 0.03 % down at Rs 682.15 on the BSE on Friday. The insurer listed on the exchanges at a price of Rs 865 in May this year, a discount to the IPO price of Rs 949.
LIC sold 36.91 lakh policies in the individual segment in Q1 FY23, an increase of 59.52% y-o-y. The solvency margin for the quarter ended June was 188.54 against 173.34 for the year ago period, the chairperson said.
Analysts have observed that LIC is looking to increase its share of high-margin non-participating, pure protection products which currently account for about 5-6% of the portfolio. However, they believe scaling up beyond a certain level could be a challenge since LIC’s agents have been used to pushing products that leave policyholders a significant share of their surplus.