LIC: Determination of embedded value to complete soon

LIC said the exercise to determine the Indian Embedded Value (IEV) as of March 31, 2022, will take some more time to complete. It expects the completion before July 15.

In its update on stock exchanges, LIC said, “it is informed that the exercise of determining the Indian Embedded Value (IEV) as of March 31, 2022, may take some more time to get completed.”

“Once completed and after requisite approvals, the required public disclosures of the same, will be made in this regard,” LIC added.

LIC expects to give a public disclosure on the embedded value by July 15, 2022.

An embedded value is a common valuation indicator that represents a life insurance company’s estimated value to shareholders. The EV is calculated by adding the insurer’s present value of future profits to the net asset value (NAV).

It needs to be noted that the future income of a life insurer is the premiums they received from policyholders, while future outgoings are the claims they pay to policyholders along with other expenses. The difference between future income and outgoings combined with income on and release of statutory reserves results in future profit.

Meanwhile, NAV is the difference between the total assets and liabilities of the company. 

On BSE, LIC shares closed at Rs. 678.90 apiece up by 2.34%. At the closing price, LIC’s market valuation is Rs. 4,29,404.09 crore.