Need capital to grow business, says LIC chief

Life Insurance Corporation of India’s maiden dividend failed to enthuse its investors, but the insurer highlighted that it needs capital for growing the business and maintaining solvency margin. The board of LIC approved a dividend of Rs. 1.5 per share, which translates to a payout of Rs. 948.75 crore aggregating to about 23.46 per cent of profit after tax.

“Out of the Rs. 4,043 crore of profit, the balance remains with shareholder. LIC also needs capital for growing the business. We need to have available solvency margin,” said Raj Kumar, Managing Director, LIC.

“The retention of other earnings is for the growth of the organisation and benefit of shareholders,” he stressed.

The insurer, which also announced its financial results, said the results for the fourth quarter of 2021-22 are not comparable with that of the fourth quarter of 2020-21. “Earlier, profits were declared at the year-end. So the fourth quarter numbers are not comparable,” Raj Kumar said, adding that the full financial year numbers would be a correct measure for comparison.

LIC had reported standalone net profit of Rs. 2,371.55 crore in Q4-FY22, down 18 per cent from Rs. 2,893.44 crore a year ago. For 2021-22, its net profit rose 39.4 per cent to Rs. 4,043.12 crore (from Rs. 2,900.56 crore in 2020-21.

Kumar said the numbers from the second quarter would be comparable as LIC had started releasing quarterly performance figures from September 2021.