LIC Chairman MR Kumar said that investors should understand that LIC is run by the board and not by the government. Along with this, he also said that there is no dearth of capital with LIC.
The company’s chairman MR Kumar said that the profits of insurance companies cannot be compared with that of any manufacturing firm.
Life Insurance Corporation IPO ,LIC IPOBefore coming, all kinds of news are coming out about the documents deposited before SEBI (DRHP). Life Insurance Corporation , Life Insurance Corporation) has reported Profit After Tax ie PAT 1437 crore for the first half of the financial year 2021-22. It was just Rs 6.14 crore in the same period a year ago. Here it has been said in DRHP that there has been a huge jump in insurance claims due to Corona. In the midst of all these discussions, on the question arising on the profit of life insurance, the company’s chairman MR Kumar (LIC Chairman MR Kumar) Said that the profits of insurance companies cannot be compared with that of any manufacturing firm. He said that this is because the nature of both the businesses is completely different.
He told the media, “The benefits of insurance companies are different as compared to other companies like manufacturing. In terms of surplus generation, over Rs 50,000 crore has been generated in the last two years. “When you look at five per cent, it seems small in size, but in reality it is not,” he said, adding that now the way surplus distribution is going to change.
Now the ratio of sharing of surplus will change
He said that in the financial year 2021-22, the ratio of surplus distribution between policyholders and shareholders was 95:5. This figure will be 92.5:7.5 in FY 2022-23 and 2023-24 and then 90:10 in FY 2024-25. He said that life insurance companies get profit from the policies sold.
death claims have increased due to corona
According to LIC, insurance claims increased due to death during the pandemic. It said that between the first six months (1 April 2021 to 30 September 2021) of the financial year 2018-19, financial year 2019-20, financial year 2020-21 and financial year 2021-22, Rs 17,128.84 crore was received in the form of insurance claim. Rs.17,527.98 crore, Rs.23,926.89 crore and Rs.21,734.84 crore have been paid. This is 6.79 percent, 6.86 percent, 8.29 percent and 14.47 percent of the total insurance claims respectively.
LIC’s capital position is very strong
MR Kumar asked investors to be rest assured about the capital status of LIC. The life insurer is well capitalized. Investors should understand that LIC is governed by the Board and not by the Government. Regarding the capital status, he said that at present we do not feel the need of capital. If this happens in future, then Life Insurance Corporation will not only approach the government but also the shareholders.
LIC to retain some stake in IDBI Bank
Kumar has IDBI Bank Said about that they will maintain some stake in the bank which will benefit us. This will act as a bancassurance channel for us. Bancassurance is such a business model under which LIC will be able to sell its product to the customer of the bank. He will get the benefit of the bank’s network and customer base. LIC’s stake in IDBI Bank was reduced to 49.24 per cent on 19 December 2020, after which it was given the status of an associate company. Presently the government holds 45.48 per cent stake in the bank. The government is ready to sell its entire stake in it.