FY22: LIC clocks report Rs 42K-cr revenue from market

Life Insurance Corp of India (LIC), the most important capital market participant, has made a report revenue of Rs 42,000 crore from fairness gross sales in FY 2021-22, increased by 16.66 per cent from Rs 36,000 crore within the yr in the past interval.

The rise in revenue got here regardless of the inventory market exhibiting big volatility in the course of the monetary yr. LIC has been a contrarian participant out there.

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The company which introduced its outcomes on Monday noticed its standalone web revenue declining by 18 per cent to Rs 2,371.55 crore within the quarter ended March 2022, in comparison with Rs 2,893.48 crore within the year-ago interval.

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However, clarifying on the drop of web earnings, Raj Kumar, MD, LIC, mentioned,” Earlier the earnings have been declared on the finish of the yr solely. So that’s why the quarterly numbers usually are not comparable. This yr’s (FY22) This autumn quantity will not be comparable with the This autumn of final yr (FY21) as a result of it was for the complete yr (FY21).” From September 2022 onwards, the comparable knowledge factors can be accessible, he mentioned.

Kumar mentioned the company’s product combine is dominated by the taking part (par) enterprise however going additional its driver of progress can be non-participating (non-par) enterprise. “We have already decided that in future we will be launching only non-par products. With the product mix changing towards the non-par side in the future at a greater pace than the par side, the value of new business will be created. That is the strategy we are adopting,” he mentioned.

A taking part (par) life insurance coverage coverage permits policyholders to take part within the earnings of a life insurance coverage firm, whereas a non-participating (non-par) plan doesn’t provide any dividend payouts.

“The exercise of determination of Indian embedded value as on March 31, 2022 is under progress and is expected to be completed by June 30, 2022. As soon as the exercise is completed, LIC will make the required public disclosures of the same,” Kumar mentioned.

“It is a long exercise (determination of Indian EV). We are implementing a new IT solution for calculation of Indian embedded value and we need to cross-check all the data,” he instructed reporters on Tuesday.

The embedded worth is a measure of the consolidated worth of shareholders’ curiosity within the life insurance coverage enterprise. It represents the value of shareholders’ pursuits within the earnings distributable from the belongings allotted to the enterprise after enough allowance for the combination dangers within the enterprise. LIC’s embedded worth was pegged at about Rs 5.4 lakh crore as on September 30, 2021 by worldwide actuarial agency Milliman Advisors

Total claims paid in the course of the quarter elevated 19% yr on yr to Rs 1.21 lakh crore. Kumar mentioned. The increased claims have been a residual influence of the Covid pandemic and likewise as a result of maturity of 4 excessive worth merchandise for which funds have been made in the course of the quarter, LIC mentioned.

LIC has a Rs 7400 crore reserve fund to deal with Covid claims. “The worst of the pandemic is behind us,” he mentioned.

“There was some residual impact of Covid and covid related claims. Overall Covid impacted the company last fiscal and one hopes that we do not see any more waves. Four of our products where the sum assured of each policy was Rs 5 lakhs also matured adding to the higher claims,” he mentioned.

“We have 285 products which need to be modelled into a new system. We have to check the consistency of the output for each of the products, and it is taking time. We don’t want to rush into any number which can be questioned tomorrow. We want to be absolutely sure and hence we are taking a little more time,” he mentioned.