New Delhi: Life Insurance coverage Company (LIC), forward of its preliminary public providing (IPO), on Friday posted a internet revenue of Rs 234.91 crore within the September – December quarter (Q3FY22).
The surge in internet revenue is due to the change in surplus distribution mannequin, whereby shareholders will now get a bigger share of the excess than earlier.
The state-run insurer clocked a internet revenue of Rs 0.91 crore. For the 9 months ended FY22 (April – December), internet revenue of the LIC stood at Rs 1,642.78 crore, in the identical interval final fiscal yr.
Based on stories, premiums of the insurance coverage behemoth rose to 0.8 per cent to Rs 97,761 crore in Q3FY22 from Rs 97,008 crore within the year-ago interval. Within the first 9 months of FY22 (9MFY22), premiums of the insurer, which incorporates first yr premiums, renewal premiums, and single premiums, totaled to Rs 2.84 trillion, up 1.67 per cent year-on-year (YoY).
LIC had a single life fund earlier than Part 24 of the LIC Act was amended by the federal government to convey its surplus distribution mechanism at par with personal life insurers.
Now, the life fund has been segregated into two funds – taking part policyholders fund and non-participating policyholders’ fund. The excess distribution within the taking part policyholders’ fund has been modified to 90:10 in a phased method, whereby 90 per cent will go to policyholders and 10 per cent to shareholders. Additionally, 100 per cent of the excess generated out of the non-participating enterprise will probably be obtainable for distribution to all shareholders.
Based on M R Kumar, chairman LIC, the change will assist LIC enhance its profitability, a metric that will probably be carefully tracked as soon as it will get listed.
The non-performing belongings (NPA) ratio of the agency additionally witnessed sharp enchancment, with the NPA ratio on the finish of Q3FY22 standing at 6.32 per cent in comparison with 7.78 per cent in the identical interval a year-ago.
In the meantime, the LIC had filed its draft papers for IPO on February 13. The federal government is aiming to promote shut to five p.c stake within the life insurance coverage main via the IPO. The revenue from gross sales of investments, largely fairness belongings, had been already at 63 p.c of the report income amassed by the life insurer of Rs 46,187 crore for the monetary yr ended March 2021.
The central authorities is eyeing to launch the IPO as quickly as inventory market volatility, sparked by the Russian-Ukraine warfare, recedes.