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Life Insurance Corporation of India reported a nearly 50% rise in third-quarter profit on Thursday, as it moved more money to a shareholders' fund. LIC, India's largest insurer, posted a profit after tax of 94.44 billion rupees ($1.14 billion) for the quarter ended Dec. 31, up from 63.34 billion rupees a year ago. The company transferred 76.92 billion rupees from its non-participating fund to a shareholders' fund for the quarter, it said. LIC had transferred 56.70 billion rupees in the year-ago quarter. The premium LIC collects from 'non-participating' policies, which have fixed returns, is parked in a non-participating fund. Since 2022, it has been transferring some of this every quarter to a shareholders' fund, aiding its profit. LIC had said the transfers were to shore up its solvency margin. Its solvency ratio, the measure of an insurer's ability to meet its long-term debt obligations, improved to 1.93 in the quarter from 1.85 a year ago. While LIC has been making such transfers each quarter, it said the quarterly results are not comparable with the year-ago period due to the transfers. The company's net premium income rose 4.6%. Its value of new business (VNB), which measures expected profit from new premiums, rose 8.4% year-over-year for the nine months ended Dec. 31. The VNB margin for the period rose to 16.6% from 14.6% a year ago. LIC has been focusing on increasing the share of higher-margin non-participating policies in total policies sold. "Our consistent and focused approach towards diversifying and changing our product mix is now yielding results at a faster pace," Chairperson Siddhartha Mohanty, said in a statement. LIC is optimistic that there will be an improvement in margins for the fiscal fourth quarter, Mohanty said in a virtual post-earnings press conference, adding that it is confident of sustaining the current earnings trajectory. Smaller peers such as ICICI Prudential Life Insurance and SBI Life Insurance have reported a drop in VNB margin for the April-December period as the share of low-margin market-linked products rose.

Shares of LIC settled 5.8% higher ahead of the results.

($1 = 82.9610 Indian rupees)