(Reuters) -Life Insurance Corporation of India (LIC) on Thursday reported a 27-fold surge in quarterly profit as it recognised a large gain due to changes in its accounting policy, and said it has not made provisions for debt held in the embattled Adani Group.
LIC, which has made investments worth over $4 billion in Adani Group companies – or about 1% of the insurer's assets under management – has maintained that its customers need not worry about the exposure to Adani firms.
"On the debt we have not made any provisioning ... debt part is standard," Chairman M.R. Kumar said in an earnings press conference on Thursday.
The Adani Group has been roiled by days of market turmoil after U.S.-based short-seller Hindenberg Research raised concerns on the group's debt levels and use of tax havens, allegations the conglomerate has denied.
The state-owned insurer will take a view on its existing Adani investments in one to three years, and does not plan to take any action on them now, Kumar added.
LIC has been a target of protests by the country's opposition political parties, which have been pressing for a probe into allegations by Hindenberg against the Adani Group.
LIC's profit surged to 63.34 billion rupees, as premium income improved and the accounting policy change led to the transfer of 56.7 billion rupees ($687.63 million) into a shareholders' fund.
Net premium income grew 14.5% to 1.12 trillion rupees in the quarter. The insurer, which is largely reliant on an army of agents, said policies sold in the nine months ended Dec. 31 rose nearly 2% year-on-year to 12.9 million.
Its solvency ratio, the measure of an insurer's ability to meet its long-term debt obligations, rose to 1.85 from 1.77 a year earlier.
The company's gross value of new business (VNB), which measures expected profit from new premiums and is a key gauge for growth, stood at 71.87 billion rupees, while VNB margins came in at 19.1%.