LIC posts 145% jump in profit from sale of equities in first quarter

Mumbai: Life Insurance Corporation of India (LIC) has registered a whopping 145% jump in profit from sale of equities in the April-June quarter of the current financial year. The insurance behemoth is looking at a double-digit growth in business in the current fiscal.

The state-owned life insurer has registered a growth of more than 10% in terms of new business premium in the first quarter of the current fiscal. “LIC made a profit of Rs6,100 crore in the April- June quarter through sale of equities from Rs2,489 crore in the year-ago period, thus showing a growth of 145%,” V.K. Sharma, LIC chairman, told reporters here on Friday.

“We have invested around Rs16,000 crore in equities until July-end from Rs43,800 crore which had been invested by us in equities in the last fiscal,” he said. Typically, LIC invests Rs50,000 crore in equities, the only exception was in 2014-15 when it shot up to Rs65,000 crore, largely due to our investments in the OFS of Indian Oil and ONGC, Sharma said.

“So even in this year we expect equity investments to remain in the same range,” he added. In equity investment, LIC will invest in line with its business growth in the current fiscal. “We expect to increase our investments in double digit in equities too.” LIC has made a total investment in debt at Rs2.62 trillion in the year gone by. According to Sharma, LIC is eyeing a double-digit growth in business (in terms of both premium and policy as well for the current fiscal.

LIC, he said, has set a premium collection target from new business on individual basis at Rs38,000 crore in the fiscal from Rs37,800 collected by it in FY17. “In the first quarter we have grown roughly by 10-11% and in July also our growth is more on that, so we are on track, in terms of new business premium,” he said. Commenting on LIC’s plan to invest in the forthcoming IPOs of the state-owned non-life insurance companies and also GIC Re, Sharma said, “We will participate in GIC Re’s forthcoming IPO.

For rest of companies I might not able to say because first the proposal will go to investment committee and they will take a view on that.” Speaking about NPAs, he said LIC has done 100% provisioning against all the NPAs amounting to Rs18,000 crore, which includes lending of Rs13,000 crore through joint lending with other lenders. LIC is targeting 17% increase in premium income from Jeewan Akshay in the current fiscal, he said.

Talking on the performance of Jeewan Umang, he said “We have already issued 54,652 policies under the scheme.” Finance Minister Arun Jaitley had recently launched LIC administered pension scheme, Pradhan Mantri Vaya Vandana Yojana (PMVVY) for the elderly with 8% fixed rate of interest on their savings. “We have already issued 65,836 policies under the scheme so far, moping up Rs3,000 crore,” he said.

To a query on ongoing Gujarat-flood related claims, Sharma said “We have already settled one claim so far from one such individual scheme in Rajkot amounting to Rs 13.31 lakh.” Our zone, division and branch authorities are in touch with state and district authorities for settlement of claims due to flood, he added. “LIC currently enjoys a market share of 71% in terms of premium and 76% in terms of policies,” LIC managing director Sunita Sharma said.