LIC records lower profit in Q2 at Rs 7,925 Cr as income declines

State-owned insurer LIC has reported a net profit of Rs 7,925 crore for the September quarter, compared to Rs 15,952 crore in the year-ago period, amid a decline in income.

The net premium income eased to Rs 1,07,397 crore in the second quarter of the current fiscal, from Rs 1,32,631.72 crore in the year-ago period, LIC said in a filing.

However, the first-year premium for the reporting quarter increased to Rs 9,988 crore, as against Rs 9,125 crore in the year-ago period, it said.

LIC, in a statement, said the latest quarterly numbers are not comparable with the year-ago quarter as it had changed its accounting policy in September last year regarding 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.

It accordingly transferred Rs 27,241 crore (net of tax) during 2022-23, which included transfer to shareholder's account amounting Rs 14,272 crore (net of tax) in the second quarter of the current fiscal.

"An amount of Rs 13,768 crore (net of tax) has been transferred for the six months ended September (Rs 6,277 crore for September quarter and Rs 7,491 crore for the April-June period), due to which the profit for the quarter ended September 30 is not comparable with the corresponding figures for the September quarter," it said.

LIC's total income declined to Rs 2,01,587 crore in the quarter, compared to Rs 2,22,215 crore in the year-ago period, it said.Net income from investments during the quarter rose to Rs 93,942 crore in the second quarter of this fiscal, compared to Rs 84,104 crore in the same period of 2022-23.

The solvency margin of LIC increased to 1.90 per cent in the September quarter this year, compared to 1.88 per cent in the same quarter a year ago.

On the asset quality front, gross non-performing assets ratio eased to 2.43 per cent, from 5.60 per cent in the same period a year ago.

During the six months ended September, LIC earned the highest-ever half-yearly profit after tax at Rs 17,469 crore, compared to Rs 16,635 crore a year ago.

New business premium income during the first half increased marginally to Rs 25,184 crore, as against Rs 24,535 crore in the same period of the previous fiscal.

Total premium, too, rose marginally to Rs 1,34,783 crore, compared to Rs 1,27,738 crore in the year-ago period.

"Rs 4,542 crore belongs to January-March 2022 (transferred amount to shareholder's account) and therefore has to be excluded from Rs 16,635 crore for calculation of H1 profit of FY23.

"The profit comes to be Rs 12,093 crore. If you compare this figure with the H1 FY24 number, the profit after tax of the corporation has jumped 44.45 per cent," the statement said.

"During the first six months of this financial year, we have been able to implement strategies successfully to enhance the share of Non-Par products in our overall individual business," said Siddhartha Mohanty, Chairman, LIC.

"The current VNB (value of new business) margins are an indicator of our initiatives delivering the objective of maintaining profitability as we change direction," he added.

LIC is conscious of the market dynamics in certain parts of business and is working towards profit-oriented consolidation, he said.

The distribution mix is also more diversified with an increase in share of bancassurance and alternative channels, he said, adding that LIC is talking to two more banks for a tie-up.

There has been directional change in terms of initiatives taken by LIC recently, he added.