Life Insurance Corporation (LIC) on Thursday said its Indian embedded value (IEV) has been fixed at Rs 5.41 lakh crore as on March 31 this year, against Rs 5.39 lakh crore at the end of September 2021. Its RoEV (return on embedded value) for March 2022 stood at 11.9 per cent as compared with 36.9 per cent for March 2021.
“As on March 31, 2022, the IEV of LIC of India has been determined to be Rs 5,41,492 crore (Rs 5,414.9 billion) as compared to Rs 95,605 crore (Rs 956 billion) as on March 31, 2021, and Rs 5,39,686 crore (Rs 5,397 billion) 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 fund that was carried out by LIC pursuant to changes in the LIC Act during the FY 2021-22,” the insurance behemoth said in a regulatory filing. The value has been determined by Milliman Advisors, it said.
The embedded value (EV) is a measure of the consolidated value of shareholders’ interest in the life insurance business. It represents the worth of shareholders’ interests in the earnings distributable from the assets allocated to the business after sufficient allowance for the aggregate risks in the business.
LIC said its value of new business (VNB) for the year ended March 31 has been determined to be Rs 7,619 crore as compared with Rs 4,167 crore for the year ended March 31, 2021. Also, the VNB for the six-month period ended September 30, 2021, stood at Rs 1,583 crore. “The VNB margin, for the year ended March 31, 2022 is 15.1 per cent as compared to VNB margin of 9.9 per cent for the year ended March 31, 2021”
Its annualised premium equivalent (APE) for the year ended March 31, 2022, was Rs 50,390 crore. The APE for year ended March 31, 2021 was Rs 45,588 crore and the APE considered for arriving at VNB for the the period ended March 31, 2021, was Rs 42,170 crore.
“Further, for the period ended March 31, 2022, the APE of Individual business and Group business was Rs 35,572 crore and Rs 14,818 crore, respectively. Therefore, the individual business accounted for 70.59 per cent of APE and Group business accounted for 29.41 per cent of APE. Also, within the individual business, the par business share on APE basis was 92.88 per cent, while the remaining 7.12 per cent was from the non-par business,” the company added.
LIC’s RoEV (return on embedded value) for March 21, 2022, stood at 11.9 per cent as compared with 36.9 per cent for March 2021. “It is clarified that these calculations take into account the bifurcation impact of the split of single life fund into par and non-par fund during the FY 2021-22.”
LIC reported a net profit of Rs 2,409 crore for the quarter ending March 2022, which was 17.41 per cent lower as compared to Rs 2,917.33 crore reported in the year-ago period. The company’s net profit for the entire fiscal was reported as Rs 4,043.12 crore, which was 39.4 per cent higher as compared to Rs 2,900.56 crore in FY21.
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