LIC Plans to Enter the Health Insurance Market: CEO Siddhartha Mohanty

Siddhartha Mohanty, CEO, LIC told a prominent media outlet on 18 March that Life Insurance Corporation of India (LIC) is planning to enter the health insurance market and that negotiations to purchase a health insurer are nearing completion. In order to make a major entry into the expanding health insurance industry, LIC plans to complete and announce the acquisition by March 31. Mohanty explained that LIC will not own the majority of the business it buys. In order to increase its market share in the health insurance sector, LIC later in the evening explained that it is in advanced talks with a stand-alone health insurance provider to purchase a sizeable interest. Although negotiations are advanced, no legally binding agreement has yet to be struck, according to LIC. A number of conditions must be met for the deal to be finalised, including regulatory clearances, board of directors’ approval, and other required permissions.

LIC Strengthening its Portfolio

By utilising its extensive client base and distribution network, the move is anticipated to enhance LIC's position in the insurance industry. Siddhartha Mohanty, the chairman of LIC, had already emphasised the company's potential in the health insurance market. LIC has experience in health insurance through the sale of fixed-benefit health products, he stated in an interview last year, but lacks knowledge in general insurance fields like property and fire. Mohanty stated that although LIC's products are fixed benefit rather than indemnity like Mediclaim, the company does have some experience in this area. In order to go into the health insurance sector, the brand is looking into both organic and inorganic prospects, including possible acquisitions.

However, the company added that there is no promise or guarantee that the agreement will be carried out or finished. It guaranteed that, where necessary, the right disclosures would be made in accordance with the relevant legislation.

The State of the Market and Economic Performance

The growth of LIC coincides with a period of volatility in the life insurance market. According to the latest data from the Life Insurance Council, new business premiums fell 12% year over year in February. LIC saw a notable 22% decrease, bringing its new business premium down to INR 15,513.95 crore. Furthermore, LIC reported a 21% drop in new business premiums, amounting to INR 43,075 crore, in its fiscal third-quarter financial report. Nonetheless, in Q3FY25, the company's standalone earnings increased 17% year over year to INR 11,056 crore. The decision to enter the health insurance market is viewed as a calculated move to bolster LIC's holdings, reduce market volatility concerns, and take advantage of India's rapidly increasing need for health insurance. Due to increased medical expenses and growing healthcare awareness, the health insurance industry has become one of the fastest-growing sectors of the national insurance market.