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With the equity markets on a roll, Life Insurance Corporation of India has raked in a whopping 145 per cent jump in profit on sale of equity investments in the first quarter of the current financial year.
India’s largest life insurer made a profit of ₹6,100 crore in the April-June 2017 quarter as against ₹2,489 crore in the year-ago period, according to Chairman VK Sharma.
In FY17, while an investment of ₹43,800 crore was made in equities by LIC, it realised a profit of ₹19,302 crore by sale of equity during the past year. It had invested ₹2.62 lakh crore in government securities.
Double-digit growth “We are seeing double-digit growth in business (premiums and policies)… equity investments are in line with the Corporation’s growth… We are targeting ₹38,000 crore premium on the individual side,” said Sharma at a conference to announce the steps taken by the Corporation to ease insurance claims settlement for the flood-affected people of Assam and Gujarat.
Sunita Sharma, Managing Director, said the LIC had invested about ₹16,000 crore in equities in the reporting quarter. “The equity investment was much less in the year-ago period,” she said. The Chairman said the LIC will be investing in the IPO of GIC Re. As far as investment in the IPOs of public sector general insurers goes, the investment committee will take a call. However, LIC will not participate in the IPOs of other life insurers.
LIC currently has non-performing loans amounting to ₹18,000 crore. Of this ₹13,000 crore is being tackled by the joint lenders forum.
To a question on the insurance regulator asking LIC to reduce stakes in companies where it holds more than 15 per cent, Sharma said the Corporation is expected to be within the prescribed stakeholding limit for all those stocks which are non-strategic to LIC. Sharma said the outlook for life insurance is very positive. “Whatever activities and steps that the government has taken, positive results have started coming in. The awareness about life insurance and insurance in general has been significantly high… and there is demographic dividend.”
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