Life Insurance Corporation, among the largest domestic institutional investor, had invested ₹34,000 crore in equities in the first quarter of the financial year.

MR Kumar, Chairman, LIC said, “We are contrarian in our investment philosophy, so we thought this is a good time to buy stocks.”

It bought equities worth ₹46,444 crore but booked a profit of ₹12,444 crore.

In the Q1 earnings conference, Kumar said that owing to the market volatility, the insurer chose to purchase more equities instead of booking profits.

Due to this, LIC’s investment gains fell year-on-year, with the company booking equity profit of ₹5,076 crore in June quarter much lower than ₹11,368 crore logged in the corresponding, he added.

Market share gain

LIC today posted a net profit of ₹683 crore for Q1 FY23, a multi-fold increase from ₹3 crore in the year ago period. The surge was led by an increase of 20 per cent in the premium income of the insurer to ₹98,352 crore.

“While the growth was very robust for the first quarter, it was on a low base as there was second Covid wave impact last year,” Kumar said.

“However, the trajectory is upwards and we are looking at increased business volumes,” he added.

Overall market share of the insurer, in terms of first year premium income, increased to 65 per cent against 63 per cent in FY22.

The number of individual policies sold in Q1 was 60 per cent higher year-on-year due to a low base in the previous year, he said.

The company has been telling its agents to focus on the number of policies sold and not just on the premium amount.

Q1 Earnings

Annualised premium equivalent of LIC was ₹10,270 crore for Q1 FY23, of which individual business accounted for 63 per cent, and group business was 37 per cent. Within the individual business, participating products comprised 92 per cent and non-par products the balance 8 per cent.

Asset quality of the insurer saw a significant improvement in Q1FY23, with net bad loans falling to ₹9 crore from ₹194 crore in the year ago period, as the company made provisions ₹26,611 crore against gross NPA of ₹26,620 crore.

Going ahead, growth in new business is expected to be good as all the company’s agents are back in “full force”, Kumar said.

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