The 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 its Managing Director and CEO, Siddhartha Mohanty. The company is in the final stages of discussions, but the name of the potential investee has not been disclosed. Mohanty stated that entering the health insurance sector is a natural choice for LIC, given the growing demand for health insurance products in India.
LIC is currently considering investing in one of the seven standalone health insurance companies in India, including Star Health & Allied Insurance, Niva Bupa Health Insurance, and Care Health Insurance, among others. However, Mohanty clarified that LIC will not be acquiring a majority stake in the company, suggesting that the investment will be a minority stake.
The move is part of LIC’s strategy to expand its presence in the health insurance sector, which is expected to grow significantly in the coming years. The company had earlier indicated its interest in the health insurance business and had stated its intention to invest in a standalone health insurance firm in the first quarter of the current financial year.
In addition to its plans to invest in a health insurance company, LIC is also seeking to issue additional long-term bonds. The company has requested the Reserve Bank of India (RBI) to issue 50-year and 100-year bonds, which would provide LIC with longer-term investment options to manage its asset-liability mismatch. The RBI has already introduced 50-year bonds to meet the growing demand from insurance and pension funds, and LIC is hopeful that a decision on the longer-term bonds will be made soon.
Overall, LIC’s plans to invest in a health insurance company and issue longer-term bonds reflect the company’s efforts to expand its presence in the insurance sector and manage its investments more effectively. With the health insurance sector expected to grow significantly in the coming years, LIC’s move is seen as a strategic one, and the company is hopeful of completing the investment by the end of the current financial year.