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The largest life insurer, LIC has registered a breath-taking 23,127.21% rise in standalone net profit to ₹682.89 crore for the quarter ending June 30, 2022 (Q1FY23) compared to a profit of ₹2.94 crore in the same quarter last year. On year-on-year, LIC's overall business witnessed a strong momentum with marketing activity picking up pace. The insurer's total premium income climbed 20.35% to ₹98,351.76 crore in Q1FY23 compared to ₹81,721.41 crore during Q1 of last fiscal. During the quarter, LIC sold 36.81 lakh policies in the individual segment registering a rise of 59.56% compared to 23.07 lakh policies sold in Q1FY22.
However, LIC registered a 71.20% drop in net profit to ₹2,371.55 crore in the preceding quarter. Also, standalone total premium contracted by 31.58% from ₹1,43,745.91 crore in the fourth quarter of FY22.
During the quarter, LIC's overall market share by First Year Premium Income (as per IRDAI) stood at 65.42% - lower than the market share of 67.52% in Q1FY22. However, the latest quarter's market share is higher than the overall share of 63.25% for the entire fiscal FY22.
Also, the market share in individual First Year Premium Income (as per IRDAI) was at 43.86%, while the group First Year Premium Income share stood at 76.43% during the quarter under review.
On an annualized premium basis (APE), LIC's total premium stood at ₹10,270 crore in Q1FY23, as per the regulatory filing. Of the total, 62.80% (about ₹6,450 crore) was accounted for by the individual business and 37.20% (approximately ₹3,819 crore) by the Group Business. Within the Individual business, the share of Par products on an APE basis was 92.25% and the balance of 7.75% was due to Non-par products in Q1FY23.
Further, LIC said, “the persistency has improved across the board both on premium and policies basis, as compared to the quarter ended June 30th, 2021."
In Q1FY23, the insurer's persistency ratios on a premium basis for the 13th month, 25th month, 37th month, 49th month, and 61st month were 75.75.%, 67.78%, 64.34%,60.82% and 58.99% respectively. The comparable persistency ratios for the corresponding quarter ended June 30th, 2021 were 72.49%, 66.53.%, 62.62%, and 59.87, 56%, respectively.
While the persistency ratios on the number of policies basis for the 13th month, 25th month, 37th month, 49th month, and 61st month were 63.85.%, 56.04%, 51.71%, 48.96% and 47.51%, respectively in Q1FY23. This was comparable to the persistency ratios of 61.26%, 53.94.%, 50.58%, 48.22, and 44.87% respectively in Q1FY22.
Meanwhile, the yield on investments on policyholders' funds excluding unrealized gains was 7.74% in Q1FY23 as against 8.39 % in Q1FY22.
In terms of asset quality, LIC's net NPA in the policyholder's fund declined to ₹9 Crore during Q1FY23 as compared to a massive ₹194 crore in Q1FY22. With that, LIC's net NPA was at zero levels in Q1 of this fiscal.
The insurer's gross NPA also improved to 5.84% in Q1FY23 against ₹7.77% of Q1 last fiscal and 6.03% in Q4FY22. In value terms, the gross NPA of the company stood at ₹26,619.66 crore declining from ₹34,884.80 crore in Q1FY22 and ₹27,087.11 crore in Q4FY22.
On the gross NPAs, LIC has made NPA provisions of ₹26,611 crore in the June 2022 quarter.
Meanwhile, the solvency ratio stood at 188.54% in Q1 of this fiscal as against 173.34% in Q1FY22.
Furthermore, LIC's value of new business (VNB) on a gross basis, stood at ₹1,861 crore in Q1FY23, while the VNB margin was at 13.6% on a net basis during the quarter.
On segment-wise performance, the gross VNB of individual business stood at ₹1,277 crore with a margin of 19.80% in Q1FY23. And in the group business, the gross VNB was at ₹583 crore with a margin of 15.26%.
As of June 30, 2022, the asset under management (AUM) came in at ₹41.02 lakh crore compared to ₹38.13 lakh crore as of June 30, 2021 - registering a growth of 7.57%.
By end of the June 2022 quarter, LIC had an agency strength of 1.33 million which is slightly lower than 1.34 million in Q1FY22. LIC said, the percentage of our agents working in rural areas is 48 % whereas the remaining 52% operate in urban areas.
M.R. Kumar, Chairperson, LIC said, “As the Covid situation normalises, we are seeing a larger activity on the ground, therefore bringing us back closer to our model of having 'feet on street' and continuous in-person engagement with our customers. While the growth numbers are very robust for the first quarter as seen in comparison to the same quarter of FY 2021-22, we are aware that the Q1 of the previous year, FY 2021-22 was impacted by a very tough second wave of Covid."
However, Kumar added, "the trajectory seems upwards for sure and we are looking at increased business volumes as is evident in our market share in the year to date since January 2022. Finally, we are glad to inform that LIC has been now included in the Fortune 500 list of companies and is placed at number 98 in the list. With this ranking, LIC is the top-ranked Indian company on the Fortune 500 list."
On BSE. LIC shares closed at ₹682.15 apiece flat compared to the previous closing. The company's market cap is around ₹4,31,459.72 crore.