Life Insurance Corporation (LIC) Q4 revenues down -17.41% at Rs2,409 crore on sharply higher claims paid out

31 May 2022 , 02:44 PM

Life Insurance Corporation (LIC) reported 11.64% growth yoy in revenues in the Mar-22 quarter at Rs212,230 crore. While investment income was flat on a yoy basis, the net premium income drove most of the growth in the top line for the quarter for LIC. In terms of premium collection, LIC saw a strong growth across first year premiums as well as renewal premiums as well as in single premium policies.

Despite the revenue growth being positive, the net profits for the year ended over 17% lower on account of the higher claims paid in the quarter compared to Q4FY21.

The company has also transferred a much larger sum to other reserves to take care of actuarial liabilities in the future. LIC had just completed its IPO in the previous month and this is the first quarterly results declared after the listing.

The gross NPAs for the quarter were lower at 6.03% compared to 7.78% in the previous Q4FY21 quarter. However, the net NPAs are just about 0.04%, which indicates that most of the potential losses are already provided for.

One advantage that LIC brings to the table is that its expense management ratio in the range of 13% to 14% is around 300-350 bps lower than the private sector counterparts in life insurance.

For the full year FY22, LIC registered net premium income of Rs427,419 crore, a growth of 6.1% on a yoy basis. For the full year FY22, the profits stood at Rs4,043 crore on PAT basis compared to the FY21 profits of Rs2,901 crore. For FY22, the yield on investments at 8.55% (excluding unrealized gains) is just about 14 bps lower than 8.69% in FY21.

For FY22, the persistency ratio for the 13th month, 25th month, 37th month, 49th month and 61st month were 75.59%, 73.47%, 66.58%, 63.85% and 61.00% respectively.

LIC has declared a dividend of Rs1.50 per share for FY22, resulting in a dividend pay-out ratio of 23.46%. LIC added 2.17 crore new policies during the year, and had a market share in individual policies of 74.6%.

However, in the group business its market share for FY22 stood at 89.07%. LIC’s share of composite first year premium stood at 63.25% for FY22.

Financial highlights for Mar-22 compared yoy and sequentially

	Life Insurance Corp
Rs in Crore	Mar-22	Mar-21	YOY	Dec-21	QOQ
Total Income	₹ 2,12,230	₹ 1,90,099	11.64%	₹ 1,75,277	21.08%
Net Profit	₹ 2,409	₹ 2,917	-17.41%	₹ 211	1040.27%
Diluted EPS	₹ 3.81	₹ 4.61		₹ 0.33
Net Margins	1.14%	1.53%		0.12%
Solvency Ratio	1.850	1.760		1.770
Expense Mgmt Ratio	13.54%	13.67%		14.33%
Policy Holder Liability Ratio	364.01	535.48		450.08