NEW DELHI: India’s largest insurer Life Insurance Corporation of India (LIC) on Thursday reported its embedded value (EV) at Rs 5.41 lakh crore as of March 31 2022, a bit higher than its EV announced during the time of its IPO.
“As of March 31, 2022, the IEV of LIC of India has been determined to be Rs 5,41,492 crore as compared to Rs 95,605 crore as of March 31, 2021, and Rs 5,39,686 crore on September 30, 2021. The IEV as of September 30, 2021, was significantly higher than the IEV of March 2021 due to the bifurcation of funds that was carried out by LIC pursuant to changes in the LIC Act during the FY 2021-22,” said LIC in a statement.
LIC also announced that the value of its new business (VNB) margin for FY22 improved to 15.1% as compared to 9.9% in FY21. The VNB for the year ended March 31, 2022, has been at Rs 7,619 Crore as compared to Rs .4,167 Crore for the year ended March 31, 2021.
The embedded value is a measure of the consolidated value of shareholders’ interest in the life insurance business and represents the worth of shareholders’ interests in the earnings distributable from the assets allocated to the business after sufficient allowance for the aggregate risks. LIC shareholders were not happy when its Board did not publish its EV at the time of reporting its Q4FY22 and FY22 results. The delay was one of the reasons, according to share market experts, that led to a sharp fall in its share price.
LIC’s shares closed at Rs 712.15 on the BSE on Thursday and since its discounted listing on May 17, the stock has declined about 18%. Its market capitalisation stood at about Rs 4.50 lakh crore. LIC also informed that Annualised Premium Equivalent (APE) for the year ended March 31, 2022, stood at Rs 50,390 crore.