LIC Q2FY24 profit DROPS 50% to Rs 15,952 cr
Mumbai: Life Insurance Corporation (LIC) of India declared a 50 percent decrease in net profit, amounting to Rs 7,925 crore, for the quarter ending on September 30, 2023. This marks a massive drop from the net profit of Rs 15,952 crore reported during the corresponding period last year.
LIC clarified in a press release that a modification in its accounting policy regarding the transfer of amounts (Net of Tax) was implemented in September 2022. Consequently, the year-on-year profit figures are not directly comparable.
"An amount of Rs 13,768 crore (net of tax) has been transferred for the six months ended September 30, 2023 (Rs 6,277 crore for the Q2FY24 quarter and Rs 7,491 crore for the Q1FY24 quarter) due to which the profit for the quarter ended 30.09.2023 is not comparable with the corresponding figures last year," the insurer said in the press release.
During the quarter in question, LIC's net premium income experienced a 19 percent decline, dropping from Rs 1.32 lakh crore in the year-ago period to Rs 1.07 lakh crore.
The insurer's gross non-performing assets (GNPAs) were recorded at 2.43 percent, a notable decrease from the 5.60 percent reported in the previous year. Meanwhile, the net non-performing assets (NPAs) remained unchanged compared to the corresponding period in the previous year.
The value of the new business (VNB) for the six-month period ending on September 30, 2023, stood at Rs 3,304 crore, a decrease from Rs 3,677 crore reported for the same period in the previous year, ending on September 30, 2022. Despite this decline, the net VNB margin for this period remained constant at 14.6 percent.
During the post-results press conference, Siddhartha Mohanty, the Chairperson, explained that the insurer had undertaken a realignment of some of its products, which had an impact on the VNB margins.
Furthermore, Dinesh Pant, the Executive Director, pointed out that competition and revisions in rates were contributing factors that influenced the margin during the same period.
The income from investments showed growth, reaching Rs 93,942 crore compared to Rs 84,103 crore in the previous year. The solvency ratio, a critical metric, saw a slight improvement from 1.88 percent in the previous year to 1.90 percent in Q2FY24.
In Q2FY24, the first-year premium for the insurer increased to Rs 9,988 crore, up from Rs 9,142 crore in Q2FY23.
The net commission for the quarter also demonstrated improvement, rising to Rs 6,077 crore from Rs 5,807 crore.
For the first half of FY24, the total premium income from the insurer's group business declined to Rs 70,977 crore compared to Rs 1.02 lakh crore in the corresponding period of the previous year.
The insurer's assets under management (AUM) experienced growth, reaching Rs 47.43 lakh crore, a 10.47 percent increase from Rs 42.93 lakh crore reported last year.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
