Life Insurance Corporation of India (LIC) may soon expand its business by acquiring a stake in a standalone health insurance company. On Tuesday, LIC’s Managing Director and Chief Executive Officer, Siddharth Mohanty, stated that the acquisition could be finalized by the end of the current financial year, i.e., by March 31, 2025.
However, Mohanty did not disclose the name of the company LIC plans to invest in. Speaking at the Global Conference of Actuaries in Mumbai, he said, “We have plans, and discussions are in the final stage. Entering the health insurance sector is a natural step for LIC. Regulatory approvals take time, but we hope to finalize the deal before March 31.”
LIC Will Not Hold Majority Stake
Mohanty clarified that LIC does not intend to acquire a majority stake in the health insurance company. Earlier, during the first quarter of FY2025, LIC had announced its intention to enter the health insurance market by investing in a standalone health insurance company.
Currently, there are seven standalone health insurance companies in India, including:
- Star Health and Allied Insurance
- Niva Bupa Health Insurance
- Care Health Insurance
- Aditya Birla Health Insurance
- Manipal Cigna Health Insurance
- Narayana Health Insurance
- Galaxy Health Insurance
LIC Requests RBI for Long-Term Bonds
Apart from its expansion into health insurance, LIC has also requested the Reserve Bank of India (RBI) to issue additional long-term bonds. The insurer had earlier sought approval for 40-year bonds, which was granted by the RBI. Now, LIC is in discussions with the central bank for 50-year and 100-year bonds.
Mohanty explained, “We are long-term investors with contractual obligations. To ensure smooth asset liability management, we require long-term bonds. Western countries already have such bonds, and earlier, the RBI introduced 50-year bonds to meet the growing demand for insurance and pension funds.”
LIC Reports 16% Growth in Q3 Net Profit
LIC’s financial performance remains strong, with the company reporting a 16% year-on-year (YoY) increase in net profit for the third quarter (July-September) of FY 2024-25. The net profit rose to ₹11,009 crore, compared to ₹9,469 crore in the same quarter last year.
However, the net premium income declined by 9% YoY, standing at ₹1.07 lakh crore in Q3 FY25, compared to ₹1.17 lakh crore in Q3 FY24. As of now, LIC’s market capitalization is ₹5.16 lakh crore.
A Look Back at LIC’s History
Before LIC’s establishment in 1956, India had 245 insurance companies, including 154 Indian firms, 16 foreign companies, and 75 provident societies. On September 1, 1956, the Government of India nationalized these entities and formed LIC.
At its inception, LIC had:
- 5 zonal offices
- 33 divisional offices
- 212 branch offices
- 1 corporate office
Within a year, LIC conducted business worth ₹200 crore, earning public trust due to the government’s backing. Today, it remains the largest life insurer in India, continuously expanding its portfolio to cater to growing financial and insurance needs.
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