The Life Insurance Corporation of India (LIC), the country’s largest insurer, is planning to expand its presence in the insurance market by acquiring a stake in a health insurance company. According to CEO Siddhartha Mohanty, a decision on the potential acquisition is expected to be made by the end of March, before the close of the current financial year. However, Mohanty clarified that LIC is not looking to acquire a majority stake, with a holding of 51% or more.
The move into health insurance would mark a significant expansion for LIC, which currently sells life insurance policies, pension plans, and investment-linked insurance products, but not health insurance. By entering the health insurance market, LIC would be competing with established players such as Star Health Insurance, Aditya Birla Health Insurance, Niva Bupa Health Insurance, and Care Health Insurance.
The insurance market in India has become increasingly competitive in recent years, with private insurers ramping up their presence in the health insurance segment to tap into growing consumer demand. LIC’s potential acquisition of a stake in a health insurance company would be a strategic move to diversify its product offerings and tap into the growing demand for health insurance products.
Separately, LIC is also in discussions with the Reserve Bank of India (RBI) on the issuance of longer-term bonds, with maturities of 50 years or 100 years. Currently, India issues bonds with maturities of up to 40 years, but LIC is seeking longer-term instruments to manage its investment portfolio. According to Mohanty, discussions with the RBI are ongoing, and the central bank is considering the proposal. If successful, the issuance of longer-term bonds would provide LIC with more flexibility in managing its investment portfolio and matching its long-term liabilities.