LIC net at Rs 7,925 cr in Q2 on lower income, ropes in BCG for digital transformation
State-owned insurance behemoth, LIC reported net profit at Rs 7,925 crore for the quarter ended September 30, 2023 on Friday.
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Mumbai, Nov 11 State-owned insurance behemoth, LIC reported net profit at Rs 7,925 crore for the quarter ended September 30, 2023 on Friday.
The state-owned life insurer had a net profit of Rs 15,952 crore in the year-ago period, LIC said.
However, the profit of the September 2023 quarter is not comparable with the corresponding figures for the quarter ended 30th September 2022, clarified LIC.
The Corporation, which has roped in BCG for digital transformation, had changed its accounting policy in September 2022 regarding transfer of amount (Net of Tax) pertaining to the accretion on the Available Solvency Margin from Non Participating Policyholder’s Account to Shareholder’s Account.
Its net premium income eased to Rs 1,07,397 crore in the second quarter of the current fiscal, from Rs 1,32,631.72 crore in the same period a year ago.
The Indian Embedded Value (IEV) as on September 30, has been determined as Rs 6,62,605 crore from Rs.5,44,291 crore in the year-ago period, registering an increase of 21.74 per cent over the previous year.
Siddhartha Mohanty, chairperson, LIC said, “During the first six months of this financial year, we have been able to implement strategies successfully to enhance the share of Non-Par products in our overall individual business. The current VNB margins are an indicator of our initiatives delivering the objective of maintaining profitability as we change direction.”
We are conscious of the market dynamics in certain parts of our business and are working towards profit-oriented consolidation. The distribution mix is also more diversified with increase in share of Bancassurance and Alternate Channels. We continue to remain focused on creating higher customer value through digital innovations, he said.
The Corporation has appointed Boston Consulting Group(BCG) as a consultant to chart out its digital transformation, Mohanty said.
The Solvency Ratio as in Q2 improved to 1.90 from1.88 a year ago.
The Value of New Business (VNB) for the six month period ended September 30 was Rs 3,304 crore from Rs 3,677 crore for the year-ago period.
The net VNB margin for the six month period was 14.6 per cent from 14.6 per cent a year ago.
LIC’s total income declined to Rs 2,01,587 crore in the latest September quarter, compared to Rs 2,22,215 crore in the year-ago period.
The net premium income declined by nearly 19 per cent on year to Rs 1.07 lakh crore.
The Assets Under Management (AUM) increased to Rs. 47,43,389 crore during the period under review from Rs. 42,93,778 crore a year ago, registering an increase of 10.47 per cent.
The Overall Expense Ratio for H1 was 15.14 per cent as compared to 16.69 per cent a year ago.
The Yield on Investments on policyholders funds excluding unrealized gains was 9.06 per cent H1 from 8.32 per cent a year ago.
The Net NPA in the policyholders fund was Rs 8.77 crore as in H1 from Rs 12.72 crore in the year-ago period.
