Life Insurance Corporation (LIC) has made positive aspects of Rs 42,000 crore from investments within the fairness market within the monetary 12 months ended March 31, 2022. This is 16.6% extra in contrast with the Rs 36,000-crore positive aspects made in FY21, managing director Raj Kumar instructed reporters a day after the insurer introduced its first quarterly outcomes after itemizing. Of its whole belongings below administration (AUM), 25% stays in equities, whereas the remainder is allotted to bonds and different devices. “Our investment strategy is based on the regulations prescribed and we are mandated to invest 50% in government securities,” Kumar stated on Tuesday.
The administration additional stated that LIC would deal with non-participating merchandise sooner or later to spice up development. In FY22, 29% of the brand new enterprise, when it comes to premium, got here from non-participatory merchandise, whereas the sale of insurance coverage insurance policies contributed 7% to the brand new enterprise. Going ahead, LIC plans to deal with ULIPs (unit-linked insurance coverage merchandise), medical health insurance and group safety merchandise. LIC’s claims paid in FY22 stood at Rs 1.2 trillion, a spike of 19% y-o-y, primarily because of the residual impression of Covid and in addition resulting from funds made towards maturity of a number of merchandise.
However, the corporate has created a Covid-19 reserve value Rs 7,400 crore for pandemic-related claims. “Some residual impact of Covid-19 and payments made for maturity of four high-value products, with claims of more than Rs 5 lakh, led to high claims paid,” Kumar stated. He additional added that the worst of the pandemic is over now.
LIC’s yield on investments dropped to eight.55% in FY22 towards 8.69% in FY21. “While investing the money of policyholders, the main concern of any life insurer is the protection of the invested money, rather than the return. An 8.55% return in a depressed market is very good. We do invest in corporate bonds, which give us a little higher yield. At the same time, we are also very aggressively investing in the equity markets,” Kumar stated.
The insurer’s senior administration, nevertheless, stated that the numbers for the fourth quarter introduced on Monday weren’t comparable with the numbers throughout the identical interval final 12 months, as the corporate had began together with quarterly numbers solely from September 2021. Much to the Street’s disappointment, the insurer has additionally not disclosed its embedded worth whereas disclosing its outcomes.
While the quarterly numbers dissatisfied, for the total monetary 12 months 2021-22, LIC’s revenue after tax rose 39% to Rs 4,043.12 crore from Rs 2,900.57 crore reported a 12 months in the past. Kumar stated that the corporate was within the strategy of finalising the embedded worth numbers. “As soon as the exercise is completed, LIC shall make the required public disclosures of the same,” he stated. According to the provide paperwork filed by LIC forward of its itemizing, its embedded worth stood at Rs 5.4 trillion. Embedded worth is among the key indicators of an insurer’s company worth.
LIC’s share worth fell 3.05% to shut at Rs 811.50 on the BSE.
Kumar stated that as the corporate’s enterprise grows additional, it can require larger capital, which in flip will profit the shareholders because the income enhance.
Source: www.financialexpress.com”