Life Insurance Corp of India (LIC) has posted a profit after tax of Rs79.25bn ($951.4m) for the second quarter (Q2) of fiscal year 2023 (FY 2023), a drop of 50% from Rs159.52bn a year ago.

The drop is attributed to reduced income from insurance premiums.

LIC’s net premium income for the quarter that ended on 30 September 2023 plummeted by 18.7% to Rs1.07bn from Rs1.32bn a year earlier.

For the quarter, LIC’s total income declined to Rs2trn from Rs2.22tn in the same period a year ago.

Following a change in its accounting policy, LIC has transferred Rs62.77bn from its non-participating fund to a shareholders’ fund for Q2 2023 to boost its profitability.

In a press statement, the insurer said: “An amount of Rs137.68bn (net of tax) has been transferred for the six months ended September (Rs62.77bn for September quarter and Rs74.91bn for the April–June period), due to which the profit for the quarter ended 30 September is not comparable with the corresponding figures for the September quarter.”

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LIC noted that its solvency ratio for the period was 1.90% as compared with 1.88% in the corresponding period a year ago.

The insurer’s expense of management ratio for the latest quarter decreased to 17.20% from 18.24%. 

For the half year that ended on 30 September 2023, total premium income was Rs2.05tn as compared with Rs2.30tn for the same period a year ago.

In this period, the company sold as many as 8,060,725 policies in the individual segment, down from 8,359,029 in H1 last year.

LIC chairperson Siddhartha Mohanty said: “During the first six months of this financial year, we have been able to implement strategies successfully to enhance the share of non-par products in our overall individual business.

“The current VNB [value of new business] margins are an indicator of our initiatives delivering the objective of maintaining profitability as we change direction. We are conscious of the market dynamics in certain parts of our business and are working towards profit-oriented consolidation.”