LIC posts 20% rise in Q2 profit on higher premiums and investment income

Life Insurance Corporation of India (LIC), the country's largest insurer, announced a net profit of Rs 12,114.78 crore for the September quarter, up nearly 20% from Rs 10,098 crore a year earlier. The gain was supported by a 16.2% rise in net premium income to Rs 1.47 lakh crore and a 38% increase in net investment income to Rs 2,855 crore.

Premium growth was led by single-premium collections, which jumped 34% to Rs 68,425 crore, while renewal premiums rose 5% to Rs 68,718 crore. First-year premium income fell 4% to Rs 10,484 crore.

Investment earnings also contributed, with the shareholders' account income rising 11% to Rs 10,527 crore and the policyholders' account investment value reaching Rs 1.15 lakh crore, a 2.2% increase.

Benefits paid, including claims, increased to Rs 1.34 lakh crore from Rs 1.06 lakh crore a year earlier. Management expenses grew 9% to Rs 15,143.38 crore, and net commission expenses rose to Rs 6,089 crore.

The insurer's solvency ratio improved to 2.35 from 2.13 a year ago, although it slipped sequentially from the June quarter. The expense-of-management ratio fell to 10.26% from 12.05% year-on-year, indicating better cost efficiency.

"The strong premium growth and higher investment returns have reinforced our financial position," a spokesperson for LIC said.

The 13th-month persistency ratio declined slightly to 67.67%, while the 25th-month ratio edged up to 63.01%. Investment yield, excluding unrealised gains, fell to 9.04% from 9.33% a year earlier, but including unrealised gains the yield rose to 4.10% from 2.07%.