Life Insurance Corporation (LIC) reported its highest-ever half-yearly profit of Rs. 17,469 crore for the first half of FY24. This was primarily due to the transfer of Rs. 13,768 crore, or the accretion on available solvency margin, from the nonparticipating policyholders' fund to the shareholders' account.
The profit after tax of Rs. 16,635 crore for the same period last year is not fully comparable because it included a similar transfer of Rs. 4,542 crore for the same six-month period. As a result, the comparable PAT is Rs. 12,093 crore, meaning that the profit for the first quarter of FY24 increased by 44.5% year over year. Regarding the transfer of this sum (net of tax), LIC modified its accounting policy in September 2022. As a result, in FY23, it transferred Rs. 27,241 crore to the shareholders' account.
The total premium income for the upcoming quarters is expected to be Rs. 2.1, a decrease of 10.72% year over year.
With a 58.5 percent market share, LIC continued to lead the industry in first-year premium income. The market share for individual businesses was 40.35 percent, while for group businesses it was 70.26 percent.
At Rs. 3,304 crore, value of new business (VNB) decreased 10.1% year over year. The net VNB margin remained constant at 14.6% from the prior year.
The concentration on nonpar products, the realignment of product benefits and readjustment of margins under nonpar policies, and the degree of pricing competitiveness in the nonpar segment all contributed to the flat margins.
