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Business News/ Companies / Company Results/  LIC Q3 profit up 49% at 9,444 cr, net premium income grows 4.6%

LIC Q3 profit up 49% at ₹9,444 cr, net premium income grows 4.6%

The improved performance was mainly driven by an increase in net income from investments and growth in net premium income.

The PSU insurer's board approved interim dividend of ₹4 per sharePremium
The PSU insurer's board approved interim dividend of 4 per share

The Life Insurance Corporation of India (LIC) saw a 49% year-on-year increase in net profit during the December quarter of FY2024, reaching 9,444.4 crore compared to 6,334.2 crore last year same period.

The improved performance was mainly driven by an increase in net income from investments and growth in net premium income. India’s largest insurer’s net premium income grew by 4.6% to 1.17 trillion compared to 1.11 trillion in Q3 FY24.

The company's board proposed an interim dividend of 4 per share for FY24, with the record date set for 21 February 2024. Additionally, LIC's net income from investments during the December quarter rose by 12% year-on-year to 95,266.8 crore from 84,869 crore in Q3FY2023, while management expenses increased by 32% year-on-year to 18,193.8 crore.

“Our consistent and focused approach towards diversifying and changing our product mix is now yielding results at a faster pace, LIC chairman Siddhartha Mohanty said.

“We want to make sure that every action of ours is value accretive to all stakeholders. We will relentlessly pursue our targeted product and channel mix with the support of all our employees, agency force and channel partners. We are committed to developing new products designed to meet the evolving needs of our customers. With our digital transformation project underway, we are confident of making significant improvements in our business processes," he added.

The company reported a decrease in other incomewhich fell to 163.83 crore from 209.75 crore compared to the same quarter last yearDespite this, LIC managed to reduce its gross non-performing assets (NPA) to 2.15% in Q3 FY2024 from 2.43% in the previous quarter.

LIC share soared to an all-time high of 1,145 following positive remarks from the Prime Minister regarding the company's performance. Furthermore, the insurer's market capitalization surpassed 7 trillion for the first time. LIC has delivered a healthy return of 26.3% to its investors since its listing on 17 May, 2022, exceeding its issue price of 949 per share.

“LIC's recent rally is driven by a confluence of factors like LIC's chairman expressing confidence in achieving a double-digit growth in new business premiums for the financial year 2024, boosting investor sentiment. Reduced embedded value losses in the last quarter signal improved financial health, implying potential for higher profitability in the coming years," said Pravesh Gour, senior technical analyst, Swastika Investmart Ltd.

For the nine-month period ending December, LIC's net profit increased by 17.2% to 26,913 crore, including a significant amount attributed to accretions on the available solvency margin transferred from the non-par fund to the shareholders' account.

In terms of market share, LIC held 38.74% in individual business and 72.24% in group business for the nine months ending December 2023. However, total premium income for the same period decreased by 5.7% to 3.42 trillion compared to the previous year.

Despite the decline in premium income, LIC maintained a strong sales volume, with 12.55 million sold in the individual segment during the nine-month period, though slightly lower than the previous year's figure.

The company's assets under management (AUM) witnessed a significant increase, reaching 49.66 trillion as of 31 December 2023, representing an 11.98% year-on-year growth. Additionally, the yield on investments on policyholders' funds showed improvement, rising to 9.14% compared to 8.58% in the previous year.

LIC’s solvency ratio as on 31 December 2023 improved to 1.93 as against 1.85 on 31 December 2022. On Thursday, LIC share closed 5.82% up at 1,105.25 apiece on the BSE.

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Mayur Bhalerao
"Mayur spearheads data-driven reporting on IPOs for Mint. He also covers market trends, and corporate announcements to ensure comprehensive coverage of the financial landscape. Mayur believes in harnessing the power of Bloomberg Terminal and Capital Line to extract and disseminate critical financial data to cross-functional teams within the newsroom and beyond. disseminate critical financial data to cross-functional teams within the newsroom and beyond."
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Published: 08 Feb 2024, 06:19 PM IST
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