LIC Q1 Results: Net Profits Surge Multifold To Rs 9,544 Crore On Shareholder Fund Transfer, GNPA Improves

LIC reported a net profit of Rs 9,544 crore for the first quarter of the financial year 2023-24 (Q1 FY24). The insurer had reported a net profit of Rs 683 crore in Q1 FY23.

Life Insurance Corporation of India (LIC) on Thursday reported a multifold rise in its April-June quarter as it moved money to a shareholders’ fund to strengthen its financial position. The state-run life insurance behemoth reported a net profit of Rs 9,544 crore for the first quarter of the financial year 2023-24 (Q1 FY24). The insurer had reported a net profit of Rs 683 crore in the year-ago period.

LIC in a statement said, "The Corporation had changed its accounting policy in September 2022 regarding the transfer of amount (Net of Tax) pertaining to the accretion on the Available Solvency Margin from Non-Participating Policyholder’s Account to Shareholder’s Account and accordingly transferred total amount of Rs 27,240.75 crores (Net of Tax) during FY2022-23, which includes Rs 4,148.77 crores (Net of Tax) pertaining to the quarter ended June 30, 2022. An amount of Rs 7,491.53 crores (Net of Tax) has been transferred for
the quarter ended June 30, 2023."

The company noted that due to this the profit shown for the Q1FY24 ended is not comparable with the financial results of Q1FY23.

LIC reported that its total earnings for Q1 FY24 went up to Rs 1,88,749 crore, compared to Rs 1,68,881 crore in the same period last year. However, the amount collected as first-year premiums during this reporting quarter decreased to Rs 6,811 crore, down from Rs 7,429 crore in the same period a year ago. Net premium income for Q1 FY24 stood at Rs 98,362 crore, compared with Rs 98,351 crore in the year-ago period.

LIC MD and CEO Sidharth Mohanty said that the drop in the number of policies is largely due to changes in the ticket size model.

"We worked on changing our ticket size models and profitability factors. But we see the number of policies rising in the coming quarters," Mohanty said.

The income from investments during this quarter rose to Rs 90,309 crore as compared to Rs 69,571 crore in the April-June period of the previous fiscal year (Q1 FY23).

LIC's solvency margin, which indicates its financial strength, improved slightly to 1.89 per cent, up from 1.88 per cent in the same quarter last year.

On the quality of its assets, LIC reported that the proportion of gross non-performing assets (bad loans) eased to 2.48 per cent from 5.84 per cent in the same period a year ago.

The Assets Under Management (AUM) increased by Rs 5.09 Lakh crore to Rs 46.11 lakh crore as on June 30, 2023, as compared to Rs 41.02 lakh crore on June 30, 2022, registering an increase of 12.41 per cent.

LIC's shares closed down 0.35 per cent ahead of the Q1 results.