The June quarter’s premium income increased by 20.4%, according to the Life Insurance Corporation of India (LIC) (LIFI.NS) announcement on Friday. This increase resulted from the COVID-19 limits being loosened, which boosted policy sales for the insurer, which primarily relies on its brokers.
On Friday, the Life Insurance Corporation of India (LIC) (LIFI.NS) announced a 20.4% increase in premium income for the June quarter. This increase came as a result of the loosening of COVID-19 restrictions, which encouraged sales of policies for the insurer, which relies heavily on its agents.
The renown insurance company drives its business mostly through an army of 1.3 million sales agents. LIC was affected by pandemic-led lockdowns last year that disrupted the operations of its agents who depend on in-person engagement.
LIC comments on increased income
“As the COVID situation normalizes, we are seeing a larger activity on the ground, therefore bringing us back closer to our model of having ‘feet on street’,” Chairperson M R Kumar stated.
LIC, India’s largest insurer, said that its net premium income increased to 983.52 billion rupees ($12.34 billion) from 817.21 billion rupees a year earlier. This increase was attributed to an over 60% increase in the number of policies that were sold.
LIC performs strongly with a 13.6% Value of New Business
The gross value of new business (VNB) of the company stood at 18.61 billion rupees, while the VNB margins came in at 13.6%. VNB is a vital barometer for future growth because it represents the projected profit from new premiums and it can be used to predict future growth.
In a press briefing, Kumar stated that the insurer anticipates a VNB margin of over 15% by the end of the year and that there would not be any market volatility in the foreseeable future that could have an effect on the company’s earnings.
The insurance company’s performance in the Indian share market
Following a record-setting initial public offering of $2.7 billion, the company, which has become synonymous with purchasing protection plans in India, went public in May. It holds more than sixty percent of the market share in terms of the overall premiums.
According to a regulatory filing made by the firm, LIC’s profit for the three months that concluded on June 30 was 6.83 billion rupees. This is in comparison to the 29.4 million rupees that the company made during the COVID-affected period one year before.
Since its first public offering in May, the value of a share of LIC has decreased by around 22%, while the value of a share of no. 2 competitor SBI Life Insurance (SBIL.NS) has increased by 23% during the same time period.
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