Life Insurance Corporation of India (LIC) is about to make a significant entry into the health insurance sector, as discussions to acquire participation in a nearby health insurance company. CEO of LIC, Siddhartha Mohanty, confirmed to CNBC-TV18 that a decision concerning the acquisition is scheduled before March 31.
This strategic decision aims to expand the imprint of LIC on the increasingly competitive health insurance market, taking advantage of its vast client-client and its distribution network.
LIC, traditionally focused on life insurance, pension plans and investment insurance products, seeks to diversify its portfolio by entering the health insurance sector for the first time.
In particular, LIC will not seek a majority participation in the health insurer, as clarified by Mohanty: “LIC will not have a participation of 51%. We explore all the possibilities.” This non-majority approach allows LIC LICE to test waters in a new market segment without surpassing its resources.
The decision comes at a time when the health insurance market attends strong competition from private insurers wishing to capitalize on increasing demand. “We have a certain expertise in this field, although our products are a fixed advantage rather than an indemnity like Mediclaim. We explore the biological and inorganic opportunities, including the potential acquisitions to establish a presence on the health insurance market,” said Mohanty last year, highlighting the company’s proactive approach to broaden its service offers.
Mohanty remains optimistic about the finalization of the acquisition during the current financial year, declaring: “I hope that in this exercise, before March 31, a decision can be made”.
In addition to his health insurance ambitions, LIC is also under discussion with the Reserve Bank of India (RBI) to issue longer term bonds, an initiative aligned with its strategy as a long -term investor. The decision to explore obligations with deadlines up to 50 or 100 years reflects the need for LIC to effectively manage its asset function framework. “Our employees discuss it from time to time with RBI, and they also consider it,” noted Mohanty, suggesting dialogues in progress with the RBI.
LIC shares have reflected the positive feeling of investors, exchanging 0.83% more at 751.20 ₹ on the ESB in the midst of these developments.
Potential entry into the health insurance market and the issue of long -term bonds should strengthen the position of the LIC market and financial resilience.
