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Life Insurance Corporation of India’s (LIC) second quarter standalone net profit declined about 4 per cent year-on-year (y-o-y) to ₹7,621 crore against ₹7,925 crore due to higher outgo on account of benefits paid, change in actuarial liability and transfer of funds to policy holders account.
India’s largest life insurer reported a healthy 12 per cent y-o-y growth in net premium income (net of re-insurance) at ₹1,19,901 crore (₹1,07,397 crore in the year ago quarter).
Income from investments (net of amortisation and losses (including capital gains)) was up 16 per cent y-o-y at ₹1,08,972 crore ( ₹93,942 crore). Transfer of funds from shareholders account at ₹601.52 crore was substantially higher against ₹0.33 crore in the year ago period, boosting the total income.
On the expenses side, benefits paid (net, including maturity benefits and death claims) rose about 12 per cent y-o-y to ₹1,19,901 ( ₹83,364 crore) and change in actuarial liability increasing by 16 per cent y-o-y to ₹1,08,246 crore (₹91,340 crore).
Further, net commission paid rose about 8 per cent to ₹6,542 crore (₹6,077 crore). Transfer of funds to policy holders account jumped to ₹1,058 crore (₹0.33 crore).
Referring to the healthy trend in premium growth and market share in the first half increasing to 61.07 per cent as compared to 58.50 per cent in the year ago period, Siddhartha Mohanty, CEO & MD, LIC, said: “I am very much hopeful that the second half will be even better. This is despite all regulatory changes (we have realigned our products, margins, etc). Already, we are showing good growth in value of new business (VNB).”
LIC’s investment portfolio increased by about 17 per cent y-o-y to ₹52,59,590 crore, with about ₹37 lakh crore being invested in bonds, including government securities, State development loans and corporate bonds, and the rest in equities.
Heath insurance
To a question on when LIC will start its health insurance business, Mohanty said: “The ground work is going on. We will have some stake in a standalone health insurance company. This (transaction) will happen within this financial year.
“Our board will take a call on how much stake we can take. There is no restriction on how much stake a life insurance company can take in a standalone health insurance company.”
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