The Embedded Value of LIC is Estimated to be Rs 5.4 Lakh Crore

The Life Insurance Corporation of India announced on Thursday that its Indian Embedded Value (IEV) as of March 31, 2022 was Rs 541,942 crore. In the case of a life insurance company, the embedded value is the current value of the company's future profits.

According to LIC officials, the IEV has been determined to be Rs 541,492 crore (Rs 5,414.9 billion) as of March 31, 2021, and Rs 539,686 crore (Rs 5,397 billion) as of September 30, 2021. According to officials, the stock market volatility has impacted the LIC's investment market value by Rs 40,000 crore, which has had an impact on IEV.

According to officials, the Rs 40,000 crore drop in the market value of its investment was in both the equity and debt markets. The IEV as of September 30, 2021, was significantly higher than the IEV as of March 30, 2021 due to the fund bifurcation carried out by LIC in response to changes in the LIC Act during FY 2021-22.

The LIC Board approved the bifurcation of the single fund into separate Participating and Non-Participating funds on January 8, 2022, and the effect of such bifurcation is reflected in the Financials as of March 31, 2022. Milliman Advisors LLP was hired by the life insurer to calculate the embedded value.