LIC to take more time in determining embedded value, likely to disclose by 15 July | Mint – Mint

life
  • LIC has recorded an increase of 6.1% in net premium income to 4,27,419 crore in FY22 compared to 4,02,844 crore in the previous financial year ended March 31, 2021.

Life Insurance Corporation of India (LIC) on Wednesday said the exercise to determine the Indian Embedded Value (IEV) as of March 31, 2022, will take some more time to complete. It expects the completion before July 15. Earlier, LIC had expected to determine the embedded value by June 30.
In its update on stock exchanges today, LIC said, “it is informed that the exercise of determining the Indian Embedded Value (IEV) as of March 31, 2022, may take some more time to get completed.”
“Once completed and after requisite approvals, the required public disclosures of the same, will be made in this regard,” LIC added.
LIC expects to give a public disclosure on the embedded value by July 15, 2022.
An embedded value is a common valuation indicator that represents a life insurance company’s estimated value to shareholders. The EV is calculated by adding the insurer’s present value of future profits to the net asset value (NAV).
It needs to be noted that the future income of a life insurer is the premiums they received from policyholders, while future outgoings are the claims they pay to policyholders along with other expenses. The difference between future income and outgoings combined with income on and release of statutory reserves results in future profit.
Meanwhile, NAV is the difference between the total assets and liabilities of the company. 
On BSE, LIC shares closed at 678.90 apiece up by 2.34%. At the closing price, LIC’s market valuation is 4,29,404.09 crore.
On May 30, LIC announced an increase of 6.1% in net premium income to 4,27,419 crore in FY22 compared to 4,02,844 crore in the previous financial year ended March 31, 2021. Net profit in FY22 stood at 4,043.12 crore as against 2,900.57 crore in FY21 – registering an increase of 39.39%.
Meanwhile, the yield on investment on policyholders’ funds excluding the unrealized gains was 8.55 % in FY22 as against 8.69% in FY21.
Notably, LIC was able to increase its marketing activities and ended the year with significant growth of 18.70% in the quarter of Jan to March 2022 in Individual First year premium Income as compared to the corresponding quarter last year. LIC registered a growth of 6.31% in Weighted Received Premium (WRP) for FY22. LIC completed 2.17 crore of New Policies during the year with a growth of 3.56% over the last year.
As of March 31, 2022, the market share of LIC in individual policies was 74.60%. In the Group business, the market share of LIC stood at 89.07% by the number of policies/schemes and 76.16% by first-year premium. The market share of LIC is at 63.25% in composite First Year Premium income.
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