Q4 FY22 Results
The life insurer reported an 18% increase to Rs 1.44 lakh crore in its consolidated net premium income for the quarter. Also, first-year premium income, i.e. new business, grew by 33% to Rs 14,614 crores.
Renewal premiums formed half of the gross premiums earned during the quarter. Before-tax profit margins stood at 1.13% versus 1.54% in the same period last year. Earnings per share increased to Rs 6.52 from Rs 4.70.
Comparison with Peers
LIC’s retail first-year premium grew by 18%. For comparison, SBI Life Insurance’s first-year premium rose by 5.3% for the quarter, while HDFC Life Insurance clocked a 7.8% growth.
What Were the Key Concerns?
In its debut results post listing, LIC witnessed an 18% decline in its net profits to Rs 2,409 crores, undoubtedly an area of concern. Also, the dividend announcement of a mere Rs 1.5/share failed to cheer investors. Also, loss of market share to private players and high costs remain the other two pain points.
Outlook for Investors
An essential aspect of the life insurance industry is that high growth is witnessed in the fourth quarter of every financial year as people rush to buy life insurance to meet their tax exemptions for the financial year. And LIC is a big gainer of this trend!
Also, LIC said that it is in the process of determining the Indian embedded value as of March 31, 2022, and that is expected to be complete by June 30.
Although premium income may be rising, loss of market share to private players might weigh on the company in the long term, which should be of concern to investors!
