Page 12 - The Insurance Times September 2022

reporting actuary for LIC in December Due to this, LIC's investment gains fell of Rs 7,111 crore, which for Q1 of this
2020 to compute the embedded value year-on-year, with the company book- yr was Rs 5,743 crore, LIC chairman M
prior to its listing as the exercise was ing equity profit of Rs. 5,076 crore in R Kumar stated in a post-earnings name
never undertaken by the insurer after June quarter much lower than Rs. with analysts. “So, there may be fairly
it segregated its Life Fund into partici- 11,368 crore logged in the correspond- a lower, and it is fairly apparent that no
pating policyholders fund and non-par- ing, he added. matter lower was there based mostly
ticipating policyholders fund. Participat- on Covid… going away now, Q1 to Q1 of
ing policyholders share profits of the the earlier yr,” Kumar stated.
LIC keen to re-enter
participating fund of the insurer, while
The declare charges had been steady
non-participating policies' profits and mediclaim segment: Chair-
earlier than the pandemic, stated
dividends are not shared with policy-
man Dinesh Pant, government director and
holders.
LIC is keen to re-enter the mediclaim appointed actuary, LIC. He added that
LIC had disclosed its embedded value segment as and when the regulator there was a spike in claims within the
for the first time in its draft red herring provides clarity on the issue, its chair- final two years because of Covid.
prospectus (DRHP) that witnessed an man has said. "We are already doing a
increase from Rs 95,605 crore in March lot of long-term health protection and LIC no longer among top 10
2021 to Rs 5.39 trillion in September guaranteed health products. And we
most valued listed firms
2021 after segregation of its fund into are evaluating the suggestion that the
Life Insurance Corporation of India (LIC)
participating and non-participating regulator IRDAI made recently," Chair-
has lost its spot among the top 10 most
funds. This increased further to Rs 5.41 man M R Kumar told, when asked about
valued Indian companies by market
trillion as of March 2022 backed by the same during its earnings call over
capitalisation. The insurance behemoth
growth in value of new business (VNB). the weekend.
is currently the 11th most valued listed
In its computation for March 2022, The chairman further said, "I don't
Indian company.
Milliman Advisors had said a 10 per cent think it will be difficult for us as we al-
The state-run insurance firm, which
drop in equities would lower the em- ready offer some of the health prod-
made its debut on bourses earlier this
bedded value of LIC by 6.5 per cent. ucts."
year, is replaced by leading NBFC Bajaj
Besides drop in equities, the embedded
Mediclaim policies, which are indem- Finance and Adani Group's Adani Trans-
value is sensitive to the taxation rate.
nity-based health plans, are the best- mission.
It could drop 24.3 per cent if the taxa-
selling health insurance products in the
tion rate is assumed to be increased to The total market cap of LIC stood at Rs
country. However, in 2016, the Insur-
34.9 per cent, the reporting actuary 4.26 lakh crore on Tuesday, which was
ance Regulatory and Development Au-
had noted. less than Adani Transmission's Rs 4.41
thority of India (IRDAI) had asked life
lakh crore and Bajaj Finance's Rs 4.35
insurers to withdraw indemnity-based
lakh crore.
LIC invests Rs. 34,000 crore health plans from the market. Life in-
Shares of Life Insurance Corporation are
in equities surers since then have been allowed to
down by 30 per cent compared to its
offer only fixed benefit health plans.
LIC, has invested Rs. 34,000 crore in
IPO price of Rs 949. The company has
equities in the first quarter of the finan-
eroded about Rs 1.75 crore worth of
cial year.MR Kumar, Chairman, LIC said, LIC sees 20% fall in death
notional wealth as it had listed with an
"We are contrarian in our investment
claims in Q1 m-cap of Rs 6 lakh crore.
philosophy, so we thought this is a good
Insurance coverage behemoth LIC wit- On the other hand, shares of Adani
time to buy stocks."
nessed a decline of practically 20% in Transmission have rallied as much as
It bought equities worth Rs. 46,444 demise claims within the June quarter 130 per cent in 2022 so far. Bajaj Fi-
crore but booked a profit of Rs. 12,444 with Covid impression seen to be ebb- nance has remained flat in the current
crore. ing, although the quantity remains to year.
In the Q1 earnings conference, Kumar be larger than pre-2020 ranges, offic- India's largest insurer, which manages
said that owing to the market volatil- ers stated. assets worth more than Rs 41 lakh
ity, the insurer chose to purchase more Within the June quarter of FY22, settle- crore, had launched a Rs 20,500 crore
equities instead of booking profits. ment of demise claims was to the tune initial public offering in early May.
12 The Insurance Times, September 2022