Life Insurance Corporation of India (LIC) has seen a 291 percent jump in its income from investment in a 10 year period between FY09 and FY19. Data from the LIC Annual Report 2018-19 released last week showed that the income from investments stood at Rs 2,21,573.72 crore at the end of FY19.
Data showed that LIC's investment income was merely Rs 56,582.79 crore. In the 10 year period, it has risen by almost three times.
Being a contrarian investor in the equity markets, LIC ‘sells’ when the sentiment is bullish and ‘buys’ when the mood is bearish.
At the end of FY19, LIC's investments stood at Rs 29.84 lakh crore. Of this, Rs 28.3 crore went into securities, while Rs 1.17 lakh crore went into loans including policy loans and mortgage loans. The rest Rs 34,849.4 crore went into other investments.
Putting the premium income and investment income together, the net total income stood at Rs 5.61 lakh crore in FY19 compared to Rs 2 lakh crore in FY09. Here, the premium income stood at Rs 3.37 lakh crore.
Income from investments includes equity as well as debt investments. Every year, the life insurer books a profit of Rs 18,000 crore to Rs 25,000 crore in equity profits alone. In FY19, LIC had an equity profit booking of around Rs 23,600 crore which was lower than the Rs 25,650 crore of the year ago.
Despite the tough market conditions, the investment income rose from Rs 2.08 lakh crore a year ago.
LIC’s investments are made out of the policyholder's funds, a rise in new premium collection also means good news for the stock market investments by LIC.
Rental income sees jump
LIC’s rental income from the estate portfolio rose to Rs 388.18 crore in FY19 compared to Rs 341.43 crore a year ago. The life insurer said that this was 90.18 percent of the yearly target. Ten years ago in FY09, gross revenue from estates stood at Rs 193.21 crore.
Being the largest domestic institutional investor, LIC also plays a large role in the real estate sector. In FY18, LIC invested Rs 16.13 crore for buying eight flats in Mumbai and three plots, one each in Mysore, Siddipet and Kopargaon.