Life Insurance Corporation of India, the country’s largest insurance company, has earned a record earnings from share sales for the first time in 65 years. LIC has made a record profit of Rs 37,000 crore from the sale of shares in the financial year 2020-21. This is the highest in the history of 65 years. LIC has the advantage of reaching a record high of the stock market. Let us know that LIC’s better bonus and ability to give returns to policy holders and better dividend to the government increases due to record profit.
In the financial year 2019-20, LIC earned a profit of Rs 25,625 crore from the share sale. In 2020-21, it earned 44 per cent more than Rs 37,000 crore. During the financial year, India’s largest institutional investor bought shares worth 94,000 crore rupees, the highest ever.
LIC Largest Investor
India’s largest life insurer is also the largest investor in its markets. It is managing assets worth about Rs 34 lakh crore. It has been the biggest financial supporter of the government, especially in its disinvestment programs.
LIC earns primarily from the sale of shares, non-linked portfolios which include traditional life insurance policies.
How will you benefit?
LIC policyholders get a big benefit from record earnings. Higher profits give LIC better bonuses and returns to policyholders and the ability to pay better dividends to the government.
LIC’s investable surplus can support the stock markets in an indefinite period of time and helps in attracting new customers due to such profit earning potential.
Decreased share in these sectors
According to the Mint report, LIC has drastically reduced its risk in the infrastructure industry, one of the most affected sectors. In March 2020, LIC’s investment in infrastructure sector has come down from Rs 24,000 crore to only Rs 4,100 crore.
LIC’s investment in IT and software sector has come down from Rs 55,000 crore in March 2020 to Rs 11,600 crore now.
Huge money spent here
On the other hand, the pharma sector which has grown due to the epidemic has attracted LIC the most as an investor. Its investment in pharma is more than Rs 37,000 crore as against Rs 17,700 crore last year.
Apart from this, last March, the investment in the FMCG industry has been increased from Rs 15,000 crore to about Rs 50,000 crore.
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