LIC Q2 Results: PAT Dips 50% To Rs 7925 On Poor Net Premium Income

On November 10, the Life Insurance Corporation (LIC) of India revealed that its net profit for the quarter that ended on September 30, 2023, had decreased by 50% to Rs 7925 crore. The insurance giant declared a net profit of Rs 15,952 crore for Q2FY23. Net premium income for Q2FY24 was Rs 1.07 lakh crore, a 19% decrease from Rs 1.32 lakh crore during the same time last year. Gross non-performing assets (GNPAs) for the company were 2.43 per cent, compared to 5.60 per cent in the year-ago quarter.

With an overall market share of 58.50% in the Indian life insurance sector, LIC is the market leader in terms of market share as determined by First Year Premium Income (FYPI) (as per IRDAI). LIC held a 40.35% market share in individual business and a 70.26% market share in group business for the six months that ended on September 30, 2023.

From Rs 84,103 crore in Q2FY23 to Rs 93,942 in Q2FY24, income from investments increased. The solvency ratio improved slightly from 1.88 per cent in Q2FY23 to 1.90 per cent in Q2FY24.

The insurer's first-year premium jumped from Rs 9142 crore in the year-ago quarter to Rs 9988 crore in the quarter under review.

Comparing the six-month period ending September 30, 2023, to the same period ending September 30, 2022, the total premium income was Rs. 2,05,760 crore, whereas the previous year's total was Rs. 2,30,456 crore. After rising to Rs. 1,34,783 crore from Rs. 1,27,738 crore in the same period of the previous year, the total individual business premium for the six-month period ended September 30, 2023, was recorded. For the half-year that concluded on September 30, 2023, the Group Business's total premium income was Rs. 70,977 crore, up from Rs. 1,02,718 crore for the same period in 2022.

In the individual category, sales totalled 80,60,725 for the half-year that ended on September 30, 2023, as opposed to 83,59,029 policies sold during the six months that concluded on September 30, 2022. In comparison to the Rs. 3,677 crore for the six months ending September 30, 2022, the Value of New Business (VNB) for the six months ending September 30, 2023, was Rs. 3,304 crore. In comparison to the 14.6% for the six months ending September 30, 2022, the net VNB margin for the six months ending September 30, 2023 was 14.6%.

As of September 30, 2023, the Assets Under Management (AUM) were at Rs. 47,43,389 crore, up 10.47% year on year from Rs. 42,93,778 crore in the same period in 2022. Compared to 16.69% for the half year ended September 30th, 2022, the overall expense ratio for the half year ended September 30th, 2023 was 15.14%.

For the half year that ended on September 30, 2023, the yield on investments for policyholders' funds, excluding unrealized gains, was 9.06%, compared to 8.32% for the same period in 2022. As of September 30, 2023, the policyholders' fund's net non-performing assets (NPA) were at Rs. 8.77 crore, down from Rs. 12.72 crore in the same period in 2022.

Shri 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 an increase in share of Bancassurance and Alternate Channels. We continue to remain focused on creating higher Customer Value through Digital Innovations. We are thankful to all our stakeholders for their continued support."