LIC Plans Stake Acquisition in Health Insurance Firm by March 31: CEO Mohanty

Synopsis

Life Insurance Corporation of India (LIC) is on track to acquire a stake in a standalone health insurance firm by March 31, as stated by CEO Siddhartha Mohanty. Discussions are nearing completion, emphasizing LIC's strategic entry into the health insurance sector.

Key Takeaways

LIC plans to acquire stake in health insurance.
Discussions are in the final stages.
Investment decision expected by March 31.
LIC not acquiring majority stake.
LIC has requested additional long-term bonds.

New Delhi, March 18 (NationPress) The Life Insurance Corporation of India (LIC) is set to acquire a stake in a standalone health insurance company by the conclusion of the current financial year (FY25), as stated by its Managing Director and Chief Executive Officer Siddhartha Mohanty on Tuesday.

While the name of the company in which LIC plans to invest remains undisclosed, Mohanty indicated that discussions are nearing completion.

"We have plans. Discussions are at the final stage. It is a natural choice for LIC to enter the health insurance sector," Mohanty remarked during his address at the Global Conference of Actuaries in Mumbai.

He further noted that "given the time required for regulatory approvals, I am optimistic that a decision will be reached within this financial year, prior to March 31."

Additionally, he clarified that LIC does not intend to acquire a majority stake in the selected company. "Entering the health insurance arena is a natural decision for the firm," he added.

Previously, LIC had expressed its interest in the health insurance market and mentioned in the first quarter of FY25 its intention to invest in a standalone health insurance firm.

Currently, India has seven such 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.

In addition, LIC has approached the Reserve Bank of India (RBI) to issue further long-term bonds.

The insurance titan had previously requested 40-year bonds, which were approved by the RBI. Now, LIC is in discussions regarding 50-year and 100-year bonds.

"We are long-term investors. We have contractual obligations to repay as per the agreement. Thus, I need to manage investments and asset-liability management efficiently… Western nations have long-term bonds," Mohanty stated.

The RBI has already launched 50-year bonds to cater to the increasing demand from insurance and pension funds.