Life Insurance Corporation of India (LIC), the country’s largest and most trusted insurance provider, is reportedly in advanced discussions to acquire up to 50% of ManipalCigna Health Insurance.
This move represents LIC’s significant step toward expanding its business beyond life insurance and entering the fast-growing health insurance market. Sources have confirmed that talks are underway, and this potential acquisition is seen as a strategic diversification for LIC.
Right now, the health insurance sector is dominated by private sector companies. These companies take premiums from customers but reject a lot of claims. IRDAI has recently said that the health insurance companies such as Star Health, Care Insurance and others are rejecting claims. Star Health alone rejected 2,96,356 claims. Click here to read this news in detail.
Why LIC is entering the Health Insurance Market
Health insurance is becoming increasingly important in India, yet it remains an underpenetrated segment. Currently, health insurance accounts for 37% of the overall ₹3 trillion general insurance industry. By acquiring a substantial stake in ManipalCigna, LIC aims to capitalize on this growing demand and strengthen its presence in medical expense coverage.
LIC is one of the biggest companies in India. If LIC enters the health insurance business, then it can significantly boost this sector. LIC has a huge network of branches and agents all across India and it can help providing a uplift to health insurance industry.
About ManipalCigna Health Insurance
ManipalCigna Health Insurance is a joint venture between two major entities:
- Manipal Education & Medical Group (based in Bengaluru), which holds a 51% stake.
- Cigna Corporation (a global health services provider based in the US), which owns the remaining 49%.
Both shareholders are expected to proportionally reduce their stakes if LIC moves forward with the acquisition. This shift would make LIC a key player in the venture. As per reports, LIC may acquire approximately 50% stake in ManipalCigna.
What is the Valuation of ManipalCigna?
According to initial discussions, ManipalCigna is valued at around ₹3,500 to ₹4,000 crore. The company reported ₹1,691 crore in Gross Written Premium (GWP) during the last fiscal year. At this valuation, LIC may need to invest between ₹1,750 crore and ₹2,000 crore to acquire a 50% stake.
If we have a look at other health insurance companies such as Niva Bupa and Star Health & Allied Insurance, the valuation comparison is as follows:
- Niva Bupa Health Insurance has a market cap of ₹13,740 crore and generated ₹5,600 crore in GWP in FY24.
- Star Health & Allied Insurance is valued at ₹26,843 crore and posted ₹15,251 crore in GWP for the same period.
LIC Chairman confirmed entery into Health Insurance
During LIC’s earnings call on November 8, Siddhartha Mohanty, Managing Director and CEO, confirmed the company’s interest in acquiring a stake in a standalone health insurance provider. He stated, “Our groundwork is underway, and within this financial year, we expect to acquire a stake in an existing standalone health insurance provider.” Though he did not disclose further details, this aligns with LIC’s strategy to diversify its offerings.
