LIC books record profit in April-November

By Administrator_ India

LIC’s profits primarily come from sale of shares in the insurer’s large, non-linked portfolio, which includes traditional life insurance policies

LIC has booked its highest ever profit of ₹25,908 crore from selling stocks in the eight months ended 30 November, three people, including a top LIC official, said, as the state-run insurer prepares for India’s biggest initial public offering.

The profit is a 66.3% jump from the ₹15,578 crore gains in the year-ago period and more than 80% of its full-year target of ₹32,000 crore which, if realized, will be the insurer’s highest earnings from equity investments in its 64-year history. Last fiscal, LIC had booked a profit of ₹25,625 crore from stock sales.

The bumper gains have been helped by a resurgent stock market. The BSE’s benchmark Sensex gained 56.4% since 1 April.

An LIC spokesperson said the insurer is a contrarian investor and focuses on long-term growth. “We are basically buyers when the market sells, and we are sellers when the market buys. This year has been exceptionally good. Along with good buying, leading to an increase in our equity portfolio, we have booked record profits in equity,” the spokesperson said in response to an emailed query.

Regulatory data shows LIC’s combined new business from individual and group single premium policies rose 22.4% to ₹95,840 crore in April-November. This, along with record profits from share sales, could increase interest in the LIC IPO.

LIC’s profits primarily come from sale of shares in the insurer’s large, non-linked portfolio, which includes traditional life insurance policies.

LIC’s record profits essentially mean: one, the insurer will be able to pay better bonuses and returns; two, it expands LIC’s investible surplus, which can provide vital support to stock markets at an uncertain time; and, three, the ability to generate such profits may attract new customers.