Embedded value of LIC as on March 2022 is estimated at Rs 5.41 lakh crore; more than before

Life Insurance Corporation (LIC) on Thursday said its Indian embedded value (IEV) has been fixed at Rs 5.41 lakh crore as on March 31 this year, from Rs 5.39 lakh crore at the end of September 2021. Its ROEV (Return on Embedded Value) stood at 11.9 per cent for March 2022, as against 36.9 per cent in March 2021.

“Till March 31, 2022, LIC’s IEV India Rs 5,41,492 crore (Rs 5,414.9 billion) has been earmarked as compared to Rs 95,605 crore (Rs 956 billion) on March 31, 2021 and Rs 5,39,686 crore (Rs 5,397 billion) on September 30, 2021. The IEV as on 30th September, 2021 was significantly higher than the IEV of March 2021 due to the divestment of funds done by LIC for changes in the LIC Act during FY 2021-22. regulatory filing. The price has been set by Milliman Advisors, it said.

Embedded Value (EV) is a measure of the consolidated value of shareholders’ interest in the life insurance business. It represents the value of shareholders’ interests in distributed income from assets allocated to the business after sufficient allowance for the total risks in the business.

LIC said the value of its new business (VNB) has been fixed at Rs 7,619 crore for the year ended March 31, 2021, as against Rs 4,167 crore for the year ended March 31, 2021. Also, VNB expired for a period of six months. September 30, 2021, stood at Rs 1,583 crore. “The VNB margin for the year ended March 31, 2022 is 15.1 per cent, while the VNB margin for the year ended March 31, 2021 is 9.9 per cent.”

Its annual premium equivalent (APE) for the year ended March 31, 2022 was Rs 50,390 crore. The APE for the year ended March 31, 2021 was Rs 45,588 crore and the APE considered to arrive in VNB for the period ended March 31, 2021 was Rs 42,170 crore.

“Further, for the period ended March 31, 2022, the APE of individual business and group business was Rs 35,572 crore and Rs 14,818 crore respectively. Therefore, individual business accounted for 70.59 percent of APE and group business 29.41 percent of APE. Further, within the individual business, the equal business share was 92.88 per cent on an APE basis, while the remaining 7.12 per cent was from non-par business,” the company said.

LIC’s ROEV (Return on Embedded Value) for March 21, 2022 was 11.9 per cent as compared to 36.9 per cent as of March 2021. “It is clarified that these calculations take into account the bifurcation effect of bifurcation of Single Life Fund. Equivalent and non-par fund during the financial year 2021-22.

LIC reported a net profit of Rs 2,409 crore for the quarter ended March 2022, down 17.41 per cent as compared to Rs 2,917.33 crore in the year-ago period. The company’s net profit for the full financial year was reported at Rs 4,043.12 crore, up 39.4 per cent as compared to Rs 2,900.56 crore in FY21.

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