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LIC Q4 Results: Profit Falls 17%; To Disclose Embedded Value By June-End

LIC’s profit was down 17% year-on-year to Rs 2,409 crore in the quarter ended March.

<div class="paragraphs"><p>Insurance policy. (Source: Unsplash)</p></div>
Insurance policy. (Source: Unsplash)

Life Insurance Corporation of India’s fourth-quarter profit fell even as net premium rose.

The public insurer’s profit was down 17% year-on-year to Rs 2,409 crore in the quarter ended March, according to an exchange filing. Sequentially, the bottom line jumped tenfold.

The company earned a net premium of Rs 1.44 lakh crore, an 18% increase over a year earlier.

Renewal premiums were around half of the gross premiums earned during the quarter. A year earlier, renewal premiums made up 55% of gross premium revenue.

LIC Q4 FY22 Highlights (YoY)

  • Revenue increased 12% to Rs 2.12 lakh crore.

  • Operating income fell 18% year-on-year to Rs 2,396 crore.

  • Profit before tax margin stood at 1.13% against 1.54% a year ago.

  • The 13th month persistency ratios—or customer retention—fell to 69.24% from 73.94% over the year earlier, while the 61st month persistency ratio improved to 55.62% from 54.43%.

  • Solvency ratio—that measures the extent to which assets cover commitments for future liabilities—stood at 1.85 as of March 2022 versus 1.76 a year earlier. It’s above the minimum requirement of 150%.

The state-owned insurer recommended a dividend of Rs 1.50 apiece.

LIC FY22 Highlights

  • Net premium earned increased 6% to Rs 4.3 lakh crore.

  • After-tax profit rose 39% to Rs 4,125 crore.

  • Earnings per share improved to Rs 6.52 from Rs 4.70.

  • Persistency ratios by premium for the 13th month fell 319 basis points to 75.59%, while it improved for the 61st month by 221 basis points to 61%.

The insurer, in a statement to stock exchanges, said it is in the process of determining Indian embedded value as on March 31, 2022 and that's expected to be completed by June 30. The insurer will also disclose other financial metrics including value of new business growth and VNB margin.

Shares of LIC closed 1.89% higher before the results were announced on Monday, in line the benchmark Sensex’s gain.