LIC's Embedded Value Steady At Rs 5.41 Lakh Crore Despite Market Volatility

Life Insurance Corp.'s embedded value held steady even as volatility in the equity market was offset by improving business.

LIC had amended its fund distribution policy before the initial public offering to bring it in line with that of listed private insurers. That increased its EV from Rs 95,605 crore in March 2021 to Rs 5.39 lakh crore in September 2021.

The policy changed the way surplus from the premium pool was distributed among policyholders and shareholders. LIC had a single fund for both participating and non-participating plans, and any surplus was shared with policyholders and shareholders in the 95:5 ratio. However, post bifurcation, entire surplus from non-participating plans was given to shareholders along with 5% of the surplus from participating fund.

The insurer had said that it will further increase the share of shareholders in the participating fund surplus to 90:10 by FY24-25, further boosting the embedded value.

The insurer said that it will continue to report other key metrics like VNB and VNB margins quarterly, the EV will be disclosed half-yearly.