LIC: A multifold increase in net profit was recorded by the state-owned Life Insurance Corporation (LIC) for the period of July through September (Q2) of FY23.

This is because the company changed its accounting procedures and moved Rs 14,271.80 crore from the non-participatory account to the shareholders’ account.

In Q2, net profit was Rs 15,952.49 crore, up 11 times from Rs 1,433.71 crore in the same quarter last year. The insurance had posted a net profit of Rs. 682.88 crores during the previous quarter.

“In accordance with a recent Irdai (Insurance Regulatory and Development Authority of India) letter and subsequent approval by the board of directors, the corporation has changed its accounting policy. It has transferred Rs 14,271.80 crore (net of tax) from non-par to the shareholder’s account. Due to this, profit for the quarter and half year ended September 2022 has increased to that extent,” LIC said on Friday.

It said, “The amount comprises Rs 5,580.71 crore for the quarter ended September, Rs 4, 148.77 crore for the quarter ended June, and Rs 4,542.30 crore for the quarter ended March.”

The insurance divided its policyholders’ funds into participatory and non-participatory funds prior to its first public offering (IPO). Contracts for non-participatory life insurance do not provide policy dividends, and all proceeds from non-par policies go to the stockholders.

In the quarter from July to September, LIC set aside Rs 11,543.75 crore for staff retirement payments. This results from a pay modification that became due on August 1.

The insurance giant reported net premium income of Rs. 1.32 trillion in the second quarter of FY23, an increase of 27% year over year (YoY) from Rs. 1.04 trillion in the comparable quarter of FY22. The company’s income from first-year premiums increased 11% year over year to Rs 9,125 crore, while renewal premiums increased 2% to Rs 56,156 crore. To reach Rs 66,901 crore, single premium income surged by 62% year over year.

During Q2 of FY23, investment income climbed 9.89% YoY to Rs 84,103.64 crore. Investment income in the previous quarter was Rs 76,533.75 crore.

For the organisation, business growth has been brisk in FY23. As a result, based on first-year premiums, it has increased its market share. The market share for LIC increased from 63.25 per cent in FY22 to 67.72 per cent as of October.

For the quarter that concluded on September 30, 2022, the yield on investments made with policyholders’ funds—excluding unrealized gains—was 8.73 per cent. In the same period a year earlier, it was 8.64 per cent, and in the quarter before that, it was 7.74 per cent.