LIC Q2 net profit slips 4 pc to Rs 7,621 cr

New Delhi, Nov 8 (PTI) State-owned insurer LIC on Friday reported a 3.8 per cent decline in net profit to Rs 7,621 crore for the quarter ended September 30 on lower other income and amortisation of Rs 464 crore due to an increase in family pension.

The country’s biggest insurer had reported a net profit of Rs 7,925 crore in the year-ago period, LIC said in a regulatory filing.

Its net premium income eased to Rs 1,19,901 crore in the second quarter of the current fiscal from Rs 1,07,397 crore in the same period a year ago.

Other income of the insurer almost halved to Rs 145 crore from Rs 248 crore in the same quarter in the previous year.

However, the total income rose to Rs 2,29,620 crore in the latest September quarter compared to Rs 2,01,587 crore in the year-ago period, it said.

Total expenses rose to Rs 2,22,366 crore in the quarter against Rs 1,94,335 crore in the same period a year ago.

The solvency ratio increased to 198 per cent from 190 per cent at the end of September 30, 2023.

At the same time, Gross NPAs came down to 1.72 per cent from 2.43 per cent at the end of the second quarter of the previous year.

For the first half ended September 2024, LIC recorded profit growth of 3.5 per cent to Rs 18,082 crore compared to Rs 17,469 crore for the half year ended September 30, 2023, the insurer said in a statement.

In terms of market share measured by First Year Premium Income (FYPI) (as per IRDAI), LIC continues to be the market leader in the Indian life insurance business with an overall market share of 61.07 per cent for the half-year ended September 30, 2024, compared to 58.50 per cent for H1 of the previous financial year.

The total premium income increased to Rs 2,33,671 crore compared to Rs 2,05,760 crore for the six months ended September 30 2023, registering a growth of 13.56 per cent.

Individual New Business premium income also rose to Rs 29,538 crore against Rs 25,184 crore for the H1 of the previous fiscal, a growth of 17.29 per cent.

On an Annualized Premium Equivalent (APE) basis, the total premium was Rs 28,025 crore for the six months ended September 30, 2024.

The value of the new business (VNB) rose by 38 per cent to Rs 4,551 crore from Rs 3,304 crore in the first half of the previous fiscal.

LIC MD and CEO Siddhartha Mohanty said the margin trajectory is on the upswing and VNB margin for H1 FY25 is 16.2 per cent compared to 14.6 per cent for a similar period last year.

"Our strategy on enhancing market share, along with changes in product and channel mix, without compromising on profitability, is yielding very visible results," he said.

Further, he said, LIC has aligned products with the new regulatory guidelines by redesigning them in such a manner that the interests of customers, shareholders and various marketing channel partners are taken care of.

"At LIC we are confident that all such changes which are friendly to customers will eventually expand the life insurance market in the country. We are committed to continuing to play a significant role in the further development of the life insurance market with the support of all our stakeholders," he said.

Mohanty also said LIC is planning to enter into the bond forward rate agreement (FRA) market soon.

This move is aimed at mitigating risks in its non-participatory (non-par) segment.

FRAs are contracts between banks and insurance companies that enable insurers to lock interest rates for a future date and get protection from market volatility. By entering such agreements, insurers can offer guaranteed returns to policyholders.

"We are already in talks with 5-6 banks to start FRA trades. We will implement soon," he said. PTI DP DP BAL BAL