LIC records 18% fall in standalone net profit; announces dividend
What's the story
State-run insurance giant Life Insurance Corporation of India (LIC) has announced its first quarterly results as a publicly traded company. In Q4 FY22, the insurer's standalone net profit fell to Rs. 2,371.55 crore, down by 18% from the Rs. 2,893 crore posted in Q4 FY21. Also, for the first time in its history, the company has announced dividends for its shareholders.
Context
Why does this story matter?
LIC is India's largest insurer with a market share of over 70%. Although the company hasn't been able to hit its issue price on the stock market after its much-celebrated IPO, many consider it a safe bet to invest in. The decline in profit can be attributed to increased paid claims and bonus payments to policyholders in the last quarter.
Stats
LIC posted a net premium income of Rs. 1.43 trillion
In Q4 FY22, LIC's total revenue was Rs. 2,11,471 crore. The company recorded a standalone net profit of Rs. 2,371.55 crore and a net annual (FY22) profit of Rs. 4,043.12 crore. The consolidated net profit stood at Rs. 2,409 crore. It reported a net premium income of Rs. 1.43 trillion, up from Rs. 1.21 trillion YoY. The income from investments was Rs. 67,498.15 crore.
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The company's board has announced a dividend of Rs. 1.5/share
Earlier this month, LIC made its debut on Dalal Street as the country's largest IPO. Now, the board has announced a dividend of Rs. 1.5 per equity share. It will pay a dividend of Rs. 916 crore to the government for FY22.
Industry stats
Insurer has a healthy solvency ratio of 185% in Q4
In the quarter ended March 2022, LIC's solvency ratio improved from 176% last year to 185%. Income from first year premium, an important metric for an insurance company, was Rs. 14,614 crore. The insurer's 13-month persistency ratio, a measurement of the flow of renewal premiums from policyholders, decreased to 69.24% from 73.94% last year. The company's gross NPA reduced to 6.03% of total assets.
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LIC's shares climbed 1.89% after the quarterly report
After releasing its quarterly report, LIC's shares ended at Rs. 837.05 on Monday, up by 1.89% from the previous close. At the time of writing, the insurer was trading in red at Rs. 818.55 apiece.