Mumbai, August 10, 2023 – The state-owned behemoth, Life Insurance Corporation of India (LIC), has reported an astounding fourteen-fold surge in its net profit for the first quarter of FY2024. LIC’s net profit skyrocketed to Rs 9,544 crore, a significant leap from Rs 683 crore reported a year ago.
Key takeaways from the LIC Q1 2024 Earnings:
- LIC attributed the massive increase in profits primarily to higher income on investments, which touched Rs 90,309 crores in Q1 FY24, up from Rs 69,570 crores in the same period last year.
- Despite the surge in profits, the company observed a minor dip in the first-year premium, which stands as a key indicator of business growth. The premium declined by 8.3% to Rs 6810 crore, as compared to Rs 7429 crore a year ago.
- The non-par annualised premium equivalent (APE) showcased a robust growth of 21.6%, increasing from Rs. 500 crore in the previous year to Rs 608 crore in Q1 FY2024.
- LIC’s Gross NPA dropped remarkably to 2.48% from 5.84% last year. The Net NPA remained unchanged at nil.
- The company’s strategic initiatives led to a drastic reduction in the transfer of funds from shareholders’ accounts, plummeting to Rs 1.48 crore from a staggering Rs 799 crore in the previous year.
- In terms of the volume of policies, the company saw a slight decline, selling 32.16 lakh policies in the individual segment, compared to 36.81 lakh policies during the same period in 2022.
Dinesh Pant, Appointed Actuary & Executive Director Actuarial, LIC, commented on the strategic changes, “We have been focusing on enhancing our product portfolio and revising the ticket size to improve profitability. We are optimistic about seeing growth in the upcoming quarters.”
Sidharth Mohanty, CEO and MD, LIC, echoed this sentiment, emphasizing strong growth margins in the coming quarters and anticipating a rise in VNB margins.
Additionally, LIC’s solvency ratio, an essential metric highlighting an insurer’s capability to fulfill its long-term debt commitments, witnessed a slight improvement, reaching 1.89 from 1.88 the previous year.
Despite the overwhelmingly positive report, LIC’s shares experienced a minor dip, closing at Rs 641.60, down by 0.36% from the last closing price.
Market analysts and stakeholders are eagerly awaiting the company’s strategies and performance in the upcoming quarters, given the monumental results in Q1 FY2024.
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