Page 12 - Insurance Times July 2022

"The retention of other earnings is for "Once completed and after requisite state-run insurer has come down to Rs
the growth of the organisation and ben- approvals, the required public disclo- 4.19 lakh crore from Rs 6 lakh crore
efit of shareholders," he stressed. sures of the same, will be made in this (based on the upper end of its IPO price
regard," LIC added. (Rs 949)), wiping a total of Rs 1.81 lakh
The insurer, which also announced its
crore.
financial results, said the results for the LIC expects to give a public disclosure
fourth quarter of 2021-22 are not com- on the embedded value by July 15, 2022. Amid this gloom and doom, what should
parable with that of the fourth quarter those investors, who are stuck with LIC
An embedded value is a common valu-
of 2020-21. "Earlier, profits were de- shares at IPO price of Rs 949, do? Ac-
ation indicator that represents a life
clared at the year-end. So the fourth cording to equity market analysts, while
insurance company's estimated value
quarter numbers are not comparable," this sharp decline is a big disappoint-
to shareholders. The EV is calculated
Raj Kumar said, adding that the full fi- ment, investors should remain patient
by adding the insurer's present value of
nancial year numbers would be a cor- as the stock may stage a comeback. VK
future profits to the net asset value
rect measure for comparison. Vijayakumar, chief Investment Strate-
(NAV).
gist at Geojit Financial Services said that
LIC had reported standalone net profit
It needs to be noted that the future in-
of Rs. 2,371.55 crore in Q4-FY22, down LIC stock's performance post IPO has
come of a life insurer is the premiums
18 per cent from Rs. 2,893.44 crore a been a big disappointment. He, how-
they received from policyholders, while
ever, says that it is too early to conclude
year ago. For 2021-22, its net profit rose
future outgoings are the claims they
that the share price won't reach the
39.4 per cent to Rs. 4,043.12 crore
pay to policyholders along with other
(from Rs. 2,900.56 crore in 2020-21. IPO price in the next one year. If the
expenses. The difference between fu-
Q1FY23 results of LIC are good, the stock
Kumar said the numbers from the sec- ture income and outgoings combined
may stage a comeback but it is likely to
ond quarter would be comparable as LIC with income on and release of statu-
underperform if there is a rally in the
had started releasing quarterly perfor- tory reserves results in future profit.
market."
mance figures from September 2021.
Meanwhile, NAV is the difference be-
In the fourth quarter of 2021-22, LIC
tween the total assets and liabilities of
reported a profit of Rs 2,409 crore (17%
LIC: Determination of em- the company.
lower YoY) on May 30, which by no
bedded value to complete On BSE, LIC shares closed at Rs. 678.90 means is a small number. However, this
apiece up by 2.34%. At the closing price, could not lift the investor sentiments
soon
LIC's market valuation is Rs. amid weak global cues and the stock's
LIC said the exercise to determine the
4,29,404.09 crore. downfall escalated afterward. Even MD
Indian Embedded Value (IEV) as of
Rajkumar's commentary that they
March 31, 2022, will take some more
LIC share price dips 30 per would be working to increase the share
time to complete. It expects the
cent, experts advice pa- of non-participatory products in their
completion before July 15.
portfolio to improve profitability and
tience
In its update on stock exchanges, LIC that they are now working on deter-
said, "it is informed that the exercise of The sharp correction in the share prices mining the crucial Indian Embedded
determining the Indian Embedded Value of LIC post its discounted listing on May Value (IEV) for March 31, 2022, that
(IEV) as of March 31, 2022, may take 17 has dealt a major blow to its inves- would be ready by June quarter could
some more time to get completed." tors as the market capitalisation of the not arrest the downfall.
Edelweiss General Insurance partners NBFC Avanse for student travel insurance
Edelweiss General Insurance (EGI) has partnered with Avanse Financial Services, an education-focused NBFC, to pro-
vide student travel insurance to overseas academic aspirants financed by Avanse. EGI's student travel insurance takes
care of medical expenses and protects students from emergencies and losses. EGI's plan offers complete coverage
against medical, stay and travel inconvenience-related covers, thereby ensuring a worry-free, study and stay period
for students. Students will also have the choice to customize their plan with optional covers as per their needs and
requirements from universities, said the firm.
Shanai Ghosh, executive director & CEO, Edelweiss General Insurance, said, "We are happy to partner with Avanse
Financial Services in empowering the students to realize their aspiration of studying in universities overseas without
having to worry about the financial stress arising out of studying and living overseas."
12 The Insurance Times, July 2022