State-owned Life Insurance Corporation of India (LIC) posted a 17% increase in standalone net profit for December quarter to ₹11,056.47 crore compared to ₹9,444.42 crore a year earlier bolstered by lower expenses of management, especially employee related.
The net profit came on a 8% decline in net premium income to ₹1,0,6891.48 crore (₹1,17,016.93 crore). Total income was lower at ₹2,0,1993.68 crore (₹2,12,447.02 crore).
Expenses of management that aided the net profit stood at ₹14,415.80 crore (₹18,193.86 crore). It was ₹16,291.78 in the quarter ended September. Of this, share of employees remuneration and welfare expenses at ₹6,691.23 crore was nearly 30% lower compared to ₹9,543.68 crore year earlier. In the second quarter, it stood at ₹7,739.65 crore.
Senior management team of LIC led by CEO and MD Siddhartha Mohanty attributed reduction in expenditure to the enhanced efforts to improve fiscal discipline.
They said the impact of the new surrender value norms was minimal. The norms introduced lower charges on policyholders closing their policies ahead of maturity and came into force in October.
Describing the change as momentous for the industry, Mr.Mohanty said some impact was there in the third quarter. But gradually, LIC is “improving... as a legacy organisation we have to take time to adapt to the transition. Our agents have to align to the new products, regulations... this quarter will be better and we will definitely achieve the commitments,” he said.
A senior official added that following the new regulations LIC had made changes in product design to ensure compliance and continue to improve value of new business (VNB) margins.
On whether LIC like some of the private life insurers opted for clawback of commissions, following the new regulations, an official said considering its large network of agents it instead realigned the commission rates with a thrust to link persistency experience and reward. It has also enhanced focus on improving ticket size of the policies.
Mr. Mohanty said the yield on investments on policyholders funds excluding unrealised gains was 8.82% for the nine months period ended December, 2024 as against 9.14% in the corresponding period of previous fiscal. “Our focus and strategy remains consistent towards changing our product and channel mix to serve the needs of our customers, in a dynamic environment.
Published - February 07, 2025 05:39 pm IST
