LIC Q2 Results: Net profit at Rs 7925 cr, net premium income falls to Rs 1.07 lakh crore

The insurer, in the first six months of FY24, sold 80.60 lakh policies versus 83.59 lakh policies in corresponding period last year.

Life Insurance Corporation (LIC) of India on November 10 reported a 50 percent fall in net profit at Rs 7925 crore for the quarter ended September 30, 2023. The insurance behemoth had reported a net profit of Rs 15,952 crore in the year-ago period.

The insurer, in a press release said that it had changed its accounting policy in September 2022 regarding transfer of amount (Net of Tax) due to which YoY profit figures cannot be compared.

"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.

LIC's net premium income fell 19 percent to Rs 1.07 lakh crore in the quarter under review from Rs 1.32 lakh crore in the year-ago period.

The insurer's gross non-performing assets (GNPAs) stood at 2.43 percent as against 5.60 percent in the previous year. Its net NPA remained unchanged from the year-ago period.

VNB

The value of new business (VNB) for the six-month period ended September 30, 2023, was Rs 3,304 crore as compared to Rs 3,677 crore for the six month ended September 30,2022. The net VNB margin for the same period remained flat at 14.6 percent.

On this, Siddhartha Mohanty, Chairperson, in the post-results press conference said that the insurer worked on realigning some of its products due to which VNB margins were affected.

Additionally, Dinesh Pant, Executive Director, said that competition and revision in rates affected the margin too.

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"There is competition and change in our product mix and revision rates which has affected our VNB margins," Pant said in the press conference.

Income from investments grew to Rs 93,942 crore from Rs 84,103 crore last year. The solvency ratio, a key metric, improved marginally from 1.88 percent last year to 1.90 percent in Q2Fy24.

First year premium of the insurer improved to Rs 9988 crore in Q2Fy24 from Rs from Rs 9142 crore in Q2Fy23. Net commission for the quarter improved to Rs 6077 crore from Rs 5807 crore.

Group business

The group business total premium income of the insurer for H1FY24 fell to Rs 70,977 crore as compared to Rs 1.02 lakh crore in the corresponding period last year.

Here, Mohanty said that group business will see good growth in the coming quarters of FY24. "Our group business will continue to contribute significantly," Mohanty said.

Similarly, Pant said that some business here is cyclic in nature and it is expected to improve going ahead.

The assets under management (AUM) of the insurer increased to Rs 47.43 lakh crore compared to Rs 42.93 lakh crore last year, increasing by 10.47 percent.

The stock ended the day Rs 610.55 on BSE, down 0.68 percent from the previous close.