Profit jumps 68%: LIC’s equity investment down 38% in 9 months

Total assets rise 12.81% to `24.41 lakh crore; ‘demonetisation impact over’

By: ENS Economic Bureau | Mumbai | Published: February 28, 2017 1:13 am

Despite equity markets going up in the current financial year, Life Insurance Corporation of India (LIC), the largest stock market player, invested a lower amount of Rs 39,705 crore in the nine months ended December of the financial year 2016-17, compared with Rs 64,000 crore invested in the same period last year, a decline of 38 per cent. However, the insurer, with assets of Rs 24.41 lakh crore booked profits of Rs 16,000 crore from the market in the nine-month period compared to Rs 9,500 crore in FY 16, a rise of over 68 per cent. “This year in equity investments we are subdued and this was a deliberate decision as markets have gone up very high. We are a contrarian player in the market and our primary goal is to invest for long term and not play trader in the market,” LIC chairman VK Sharma said.

“But let me tell you that… LIC wants to buy public sector stocks and we don’t get it sometimes. Recently it has happened in BEL in which we have not got a single stock though we had applied for 60 per cent. The market is becoming deeper and more players are coming, so LIC coming out to only for PSUs is becoming irrelevant,” he said. Currently, LIC has equity investments of Rs 4.8 lakh crore while in debt it has Rs 17.35 lakh crore. During the nine months ended December, LIC invested Rs 1.98 lakh crore in debt, of which Rs 1.83 lakh crore went into government securities and state development loans.

LIC posted a robust growth of 12.43 per cent in the total premium income at Rs 1,45,031 crore compared to Rs 1,29,001 crore during the previous year. Total assets also showed a phenomenal growth to Rs 24,41,946 crore as against Rs 21,64,652 crore in the previous year an increase of 12.81 per cent. The corporation’s gross total income grew 15.76 per cent to Rs 3,37,465 crore against Rs 2,91,511 crore last year. The new business performance of the corporation for nine months ended December 2016 saw an impressive increase of 40.11 per cent in the first year premium.

On demonetisation, Sharma said, “for the first 15 days, there was a sharp fall in our collections, but later within three weeks we came to normal collections. But the difference is that earlier we had 50 per cent cash and another 50 per cent by cheque and other means. It’s now 25 per cent cash and remaining in online or bank transfers. After roughly 40 days our collections have become normal.”

Under Social Security Schemes, the vertical has insured 5.81 crore lives. For the period ended December 2016, the total policy payments amounted to Rs 112,194 crore as against Rs 94,576 crore showing an increase of 18.63 per cent.

 

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