(PTI) A 27 per cent jump in premium income and massive gains from changes in its accounting policy along with investment income helped national insurer LIC on Friday report a multifold jump in net income at ₹15,952 crore in Q2 from ₹1,434 crore a year-ago.
More than 40 per cent of the net income came in from profit from investments which reached ₹6,798.61 crore, but down from the year-ago period when it had booked ₹6,961.14 crore.
The bottom-line was also boosted by gains from changes in its accounting policy, the nation's financial powerhouse said in exchange filings.
In the June quarter, which was its first earnings after going public in May with an over ₹20,530-crore IPO, the insurer had reported a net profit of just ₹682.9 crore.
Other reasons for the massive spike in the profit were vastly lower commissions to the agents and a sharp decline in employee cost.
In the reporting quarter, while it said agency commissions almost halved to ₹5,844 crore from ₹10,896 crore a year ago, its employee cost came in at a much lower ₹16,474.76 crore from ₹24,157.5 crore.
The statement did not attribute any reasons for the same. It can be noted than its over 15 lakh agents bring majority of its business.
Changes in actuarial liability led to a lower income at ₹96,088.03 crore in the reporting quarter, down from ₹1,74,277.93 crore. Similarly, the company's surplus came down to ₹16,171.14 crore from ₹18,356.42 crore
First-year premium, which is an indication of business growth, rose to ₹9,124.7 crore for the quarter, up 11 percent from ₹8,198.30 crore it booked a year ago, the nation's largest life insurer said.
Net premium income was ₹1.32 lakh crore from ₹1.04 lakh crore in the year-ago quarter, while the total income rose to ₹2.22 lakh crore from ₹1.87 lakh crore.
Of this, first-year premium income rose to ₹9,175.89 crore from ₹8,270.91 crore a year ago and renewal premium rose to ₹56,514.63 crore from ₹55,342.62 crore and single premium income rose to ₹67,021.9 crore from ₹41,428.7 crore, the company said.
In the run-up to the earnings, a section of the media had reported based on sources that the state-run company was planning to pay dividends or issue bonus shares, leading to a spike in share prices. But the company was silent on any such move. The LIC counter on Friday closed at ₹628 on the BSE, nearly 1.17 per cent higher but is over 30 per cent down from its listing price of ₹940.
The solvency ratio, which measures an insurer's cash flow in comparison to the amount it owes as total life cover, came in at 1.88 per cent, similar to the June quarter.
Gross non-performing assets stood at ₹26,111 crore, down from ₹26,619 crore a quarter ago, and ₹28,929 crore a year ago. The gross NPAs came down to 5.60 per cent from 5.84 per cent in the June quarter and 6.57 per cent in the year-ago period.
LIC's 13th month persistency ratio, which measures a customer's stickiness with the insurer, improved to 70.52 per cent in the reporting quarter from 68.81 per cent a year ago.