Winning Bizness Desk
Mumbai.State-owned Life Insurance Corporation of India (LIC) is set to enter the health insurance sector by acquiring a stake in a standalone health insurance company. On Tuesday, LIC’s Managing Director and Chief Executive Officer, Siddhartha Mohanty, stated that the company is likely to announce the acquisition by the end of the current financial year, i.e., March 31.
However, Mohanty did not disclose the name of the company in which LIC plans to acquire a stake. Speaking at the Global Conference of Actuaries in Mumbai, he said, “We have plans, and discussions with the company are at the final stage. Entering health insurance is a natural choice for LIC. Regulatory approvals take time, but I expect a decision before March 31.”
LIC Will Not Acquire a Majority Stake
Mohanty clarified that LIC will not acquire a majority stake in the health insurance company. In the first quarter of FY25, LIC had expressed its intent to enter the health insurance business by acquiring a stake in a standalone health insurance company.
Currently, there are seven standalone health insurance companies in the market, including Star Health & Allied Insurance, Niva Bupa Health Insurance, Care Health Insurance, Aditya Birla Health Insurance, ManipalCigna Health Insurance, Narayana Health Insurance, and Galaxy Health Insurance.
LIC Seeks Long-Term Bonds from RBI
Apart from its expansion into health insurance, LIC has requested additional long-term bonds from the Reserve Bank of India (RBI). Earlier, LIC had sought approval for 40-year bonds, which RBI had sanctioned. Now, LIC is in discussions with RBI to introduce 50-year and 100-year bonds.
“We are long-term investors. We have contractual obligations for payments, and I need to manage investments and asset-liability properly. Western countries already have long-term bonds,” said Mohanty. RBI had earlier introduced 50-year bonds to meet the growing demand from insurance and pension funds.
LIC’s Profit Rises 16% in Q3
LIC reported a 16% year-on-year increase in its consolidated net profit for the third quarter of FY24-25, reaching ₹11,009 crore. In the same quarter last year, LIC had reported a profit of ₹9,469 crore. However, LIC’s net premium income declined by 9% year-on-year, standing at ₹1.07 lakh crore in Q3 FY25 compared to ₹1.17 lakh crore in Q3 FY24. The company’s market capitalization is currently ₹5.16 lakh crore.
LIC’s Legacy Since 1956
Before LIC’s formation, India had 154 Indian insurance companies, 16 foreign companies, and 75 provident companies operating in the market. On September 1, 1956, the government nationalized these 245 companies and established Life Insurance Corporation of India (LIC).
At the time of its inception, LIC had five zonal offices, 33 divisional offices, 212 branch offices, and a corporate office. Within its first year, LIC achieved a business turnover of ₹200 crore, backed by government assurance and public trust.
LIC’s Health Insurance Expansion
- Q1 FY25: LIC announces its plan to enter the health insurance sector.
- March 31, 2025: LIC to announce stake acquisition in a standalone health insurance company.
- Current Status: Discussions in the final stage; regulatory approvals pending.
- Market Players: 7 standalone health insurance companies in India.
- Future Plans: LIC to expand its health insurance portfolio without acquiring a majority stake.
