LIC Q4 net profit falls 18% to 2,371 cr, board recommends ₹1.50 dividend

The Life Insurance Corporation of India (LIC) reported net profit of ₹2,371.55 crore for the quarter ended March 31, 2022. The insurance major had registered profit after tax of ₹2,893.48 crore in the year-ago period, marking a decline of 18% during the quarter under review.

During the March quarter, net premium income increased to ₹1,43,745.92 crore, compared with ₹1,21,626.06 crore. Of this, the first year premium was ₹14,614.25 crore, against ₹10,957.65 crore a year ago. Renewal premium and single premium also saw increase during the quarter, reaching ₹71,157.90 crore and ₹58,198.16 crore, respectively, against ₹67,455.95 crore and ₹43,365.66 crore in the year-ago period.

Net income from investments improved marginally to ₹67,498.15 crore in Q4 FY22 from ₹67,435.29 crore Q4 FY21.

Net commission during the quarter also saw marginal growth at ₹7,742.56 crore from ₹7,476.20 crore in the year-ago period.

For the entire fiscal, net profit stood at ₹4,043.12 crore, boosted 39% by lower tax provisions against ₹2,900.57 crore in FY21.

Net premium income for FY22 stood at ₹4,27,419.21 crore, compared with ₹4,02,844.34 crore. Net income from investments again saw marginal growth at ₹2,92,894.45 crore from ₹2,78,761.14 crore in the previous fiscal.

Percentage of gross non-performing asset (NPA) ratio for policyholders’ funds decreased to 6.03% from 7.78%. The net NPA ratio declined to 0.04% from 0.05%.

“In view of seasonality of the industry, the financial results for the quarter or interim period are not necessarily indicative of the results that may be expected of any other interim period or full year,” LIC noted in an exchange filing.

The board of LIC has also recommended a dividend of ₹1.50 per equity share with face value of ₹10 each for the year ended March 31, 2022, subject to shareholders’ approval in the upcoming annual general meeting.

“Considering the national statistics as available from Government of India statistical sources on Indian population, duly adjusted and applied on the corporation's data and experience and after adding margin for prudence, a separate reserve for Covid-19 related deaths has been estimated and provided for under both individual and group insurance lines of businesses,” LIC says in its filing.

“This Covid-19 reserve is in addition to the long term mortality reserve provided each year while determining and providing for the policy liabilities,” it further adds.