LIC Q4 profit drops 18% on lower surplus

MUMBAI: Life Insurance Corporation of India has reported a profit of Rs 2,372 crore for the quarter ended March 2022 — a decline of 18% over Rs 2,896 crore in the corresponding quarter of previous year due to a lower transfer to shareholder accounts from policyholders’ funds. The net profit for the full year was Rs 4,043 crore, an increase of 39% compared to Rs 2,900 crore in FY21.
The corporation’s board declared a dividend of Rs 1.5 per equity share with a face value of Rs 10 for the year ended March 31, 2022. Shares of LIC were up nearly 2% at Rs 837 ahead of the announcement. The results were released after the close of trading on the stock exchanges.
The corporation’s income from first-year premium increased 33% to Rs 14,614 crore, while renewal premium rose 5.4% to Rs 71,157 crore and single-premium rose 34% to Rs 58,198 crore during the quarter. LIC transferred a smaller amount of Rs 2,281 crore from policyholders’ account during the quarter, a drop of 21% compared to Rs 2,889 crore in the year-ago quarter.
According to analysts, LIC’s numbers for the current fiscal and the previous year are not comparable as there have been many changes since the company got its balance sheet IPO-ready. FY22 is also considered to be an exceptional year because of Covid losses. According to LIC, available information in the public domain does not conclusively suggest the need for any long-term change in the expected future mortality experience on account of Covid. “It is, however, considered prudent that a separate reserve is kept as Covid reserve without need for changing long-term mortality assumptions,” the corporation said.
The corporation also said that it has had to set aside Rs 11,124 crore towards giving employees an additional pension option. This provision had to be made over a period of five years. Against this liability, there is a balance provision amounting to Rs 4,449 crore, which has to be funded in the next two years up to March 31, 2024.
The corporation’s income from investments was marginally higher at Rs 67,855 crore, compared to Rs 67,684 crore in the corresponding quarter of previous year. There was a marginal decline in the thirteenth month persistency ratio, which stood at 69.2% compared to 73.9% in the fourth quarter of the preceding year.


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