NEW DELHI: Insurance behemoth Life Insurance Corporation made a whopping Rs 42,000 crore gains from selling its equity investments in FY22. The gains made this fiscal is 16.6% more than Rs 36,000 crore gains made in FY21, managing director of LIC Raj Kumar said on Tuesday in a press briefing.
LIC invests nearly 25% of its assets under management (AUM) in the equity markets, while the remaining sum is invested in government bonds and other instruments. LIC’s total AUM stands at Rs 42 lakh crore. According to Kumar, they don’t book profits in a single year, regardless of the gains in the equity markets but over a period of time as they have to issue bonuses to the policyholders. LIC’s yields on the investment, however, witnessed a year-on-year slump from 8.69% in FY21 to 8.55% in FY22. According to Kumar, this is a good return in an otherwise depressed market.
Going forward, Kumar said they would be working to increase the share of non-participatory products in their portfolio to improve profitability and that the insurer would be launching only non-par products this year. In the LIC’s product portfolio, 29% of new business came from non-par products even as only 7% of the policies sold were non-par in FY22. Kumar added that in the next five years LIC’s value of new business margin will be on a par with private players.
The state-run insurer on Monday reported over a 17% drop in its net profit to Rs 2,409 crore in Q4FY22. However, the company’s net profit for the entire fiscal FY22 was Rs 4,043 crore, up 39%. The quarterly result was not welcomed in the street as the recently listed stock fell over 3% to hit new closing low of Rs 811.50 a piece on the BSE. Since its discounted listing on May 17, the stock has fallen by 7.30%