Life Insurance Corporation of India (LIC) is planning to acquire a stake in a standalone health insurance company by the end of the current financial year, according to Siddhartha Mohanty, the company’s Managing Director and Chief Executive Officer. The decision is contingent on regulatory approvals, which are expected to be obtained by the end of March 31. The acquisition is a natural step for LIC to diversify its portfolio and expand its presence in the insurance market.
While discussing the details, Mr. Mohanty hinted that the company is not planning to acquire a majority stake, but rather will be open to exploring all possible options. He also emphasized that as a long-term investor, LIC has contractual obligations to manage its investments and asset-liability management, citing the example of Western countries with long-term bonds.
The acquisition is expected to be a strategic move to tap into the growing health insurance market in the country. The health insurance sector is expected to be a major priority for the Indian government, with the aim of increasing penetration and coverage.
There are currently seven standalone health insurance companies operating 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.
Meanwhile, LIC has reported a 17% year-on-year increase in net profit for the October-December quarter, but its net premium income has seen a decline of 8.6% year-on-year. Despite this, the company plans to expand its portfolio by acquiring a stake in a health insurance company, which is expected to be a significant step in the company’s growth strategy.