LIC Set to Enter Health Insurance Sector, Plans Major Acquisition, Says CEO Mohanty

LIC is exploring opportunities among seven standalone health insurance companies, including Star Health & Allied Insurance, Niva Bupa Health Insurance, Care Health Insurance, and Others.

Life Insurance Corporation of India (LIC), the country’s largest state-owned insurer, is preparing to enter the health insurance market, with CEO Siddhartha Mohanty revealing that discussions are in advanced stages for the acquisition of a health insurer.

Mohanty stated that the company intends to finalize and announce this acquisition before March 31, solidifying its entry into the sector. Importantly, he noted that LIC will not hold a majority stake in the targeted company, as reported by ET NOW.

“Discussions are at the final stage to acquire a stake in a health insurance company,” said the CEO but refrained from disclosing the name of the target.

LIC’s Financial Shake-Up

Data from the Life Insurance Council previously showed a 12% year-on-year decline in new business premiums for life insurance companies in February, with LIC experiencing a 22% drop to INR 15,513.95 Cr.

CEO Mohanty acknowledged that new surrender value norms from IRDAI had adversely impacted premium collections, prompting the insurer to revamp its products and adjust agent commissions to mitigate the effects. He expressed optimism about improvements in collections for the fourth quarter.

LIC’s recently released fiscal third-quarter earnings report indicated a 21% year-on-year decline in new business premium (NBP), totaling INR 43,075 Cr for Q3FY25.

However, the standalone profit for the quarter rose by 17% year-on-year to INR 11,056 Cr, compared to INR 9,444 Cr during the same period last year.

During a recent event, Mohanty said, “We have plans. Discussions are at the final stage. It is a natural choice for LIC to enter health insurance… Since regulatory approvals take time, I am hopeful that a decision will be taken within this financial year, before March 31.”

Reportedly, LIC is exploring opportunities among seven standalone health insurance companies, 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.

Earlier in November, we reported that LIC was negotiating to purchase a 50% share in ManipalCigna Health Insurance. However, this information has not yet been confirmed.

LIC’s potential investment is seen as a strategic move to diversify its portfolio and capitalize on the growth of India’s health insurance sector, which has become one of the fastest-expanding segments in the country’s insurance market.

Stay tuned for more such updates on Digital Health News.