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    Home / News / Business News / LIC records 18% fall in standalone net profit; announces dividend
    Business

    LIC records 18% fall in standalone net profit; announces dividend

    LIC records 18% fall in standalone net profit; announces dividend
    Written by Athik Saleh
    May 31, 2022, 12:13 pm 2 min read
    LIC records 18% fall in standalone net profit; announces dividend
    LIC will pay a dividend of Rs. 916 crore to the government (Photo credit: Moneycontrol)

    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.

    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.

    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.

    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.

    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.

    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.

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