LIC's embedded value at Rs 5.41 lakh cr

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Representational ImageFile/ GK

Mumbai, July 15: Life Insurance Corporation of India (LIC) on Thursday reported the Indian Embedded Value (IEV) at Rs 5,41,492 crore as of March 31, 2022, as compared to Rs 95,605 crore as of March 31, 2021.

The Embedded Value (EV) is a measure of the consolidated value of shareholders' interest in the life insurance business.

It represents the present value of shareholders' interests in the earnings distributable from the assets allocated to the business after sufficient allowance for the aggregate risks in the business.

The Indian Embedded Value (IEV) determination exercise has been completed. The IEV report issued by Milliman Advisors LLP has been adopted by the board on July 14, 2022," LIC's Managing Director Raj Kumar told reporters.

Going forward, the IEV will be disclosed on six monthly basis, that is, at the end of March and September, every year, he said.

As of September 30, 2021, the corporation's embedded value stood at Rs 5,39,686 crore.

The IEV as of September 30, 2021 was significantly higher than the IEV of March 2021 due to the bifurcation of funds that was carried out by LIC following changes in the LIC Act during the FY 2021-22, the state-run insurer said in a release.

The change in EV has to be looked at in totality. There was a market movement downwards and that impact of around Rs 40,000 crore has been captured in the calculation. However, the other factors increased such as the Value of New Business (VNB) and hence the net growth of around Rs 2,000 crore (in March 2022) compared to September 2022, its Executive Director (Actuarial) K R Ashok said.

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