Embedded value of LIC rises to ₹5.41 lakh crore

Board approves report by Milliman Advisors on embedded value

The Indian Embedded Value (IEV) of Life Insurance Corporation of India (LIC) as on March 31, 2022, has been determined at ₹5,41,492 crore compared with ₹95,605 crore as on March 31, 2021 and ₹5,39,686 crore as on September 30, 2021, the insurer said in a filing with the stock exchanges.

“The IEV as of September 30, 2021 was significantly higher than the IEV of March 2021 due to the bifurcation of fund that was carried out by LIC pursuant to changes in the LIC Act during the FY 2021-22,” it said.

LIC’s board on Thursday approved the report on Indian Embedded Value (IEV) as on March 31, 2022. It had engaged Milliman Advisors LLP for determining the IEV of the LIC of India as on March 31 this year.

There had been a delay in the release of the report and given the market volatility, there was a mark-to-market impact of ₹40,000 crore, top LIC officials said at a virtual press conference.

THe IEV would now be disclosed every six months, they said, adding that the Embedded Value is the value of the whole corporation and represents the business for shareholders in its entirety.

As mandated under the amended section 24 of the LIC Act, 1956, the board of LIC in its meeting held on January 8, 2022 had approved bifurcation of the single fund into separate Par and Non-Par funds and the effect of such bifurcation had reflected in the financials as on March 31, 2022.

Top executives at the insurer said that the Value of New Business (VNB) for the year ended March 31, 2022 had been determined at ₹7,619 crore compared with ₹4,167 crore in the previous year.