LIC set to acquire stake in health insurer by March 31: CEO

Life Insurance Corporation of India (LIC) is poised to acquire a stake in a health insurance company within the next two weeks, confirmed its CEO, Siddhartha Mohanty, on Tuesday.

While Mohanty did not disclose the name of the target company, he stated that discussions are at an advanced stage, and the deal is expected to be finalized before the end of the fiscal year on March 31. Speaking at the GCA25 event, he emphasized that entering the health insurance sector is a "natural choice" for LIC.

However, LIC will not acquire a controlling stake (51% or more). The exact percentage of the stake purchase will be determined by LIC’s board and valuation assessments.

Currently, life insurers in India are restricted from offering comprehensive health insurance policies that cover hospitalization and other medical expenses. While discussions have been ongoing about introducing a composite license for insurers, no formal announcement was made in the Union Budget.

Reports suggest that LIC is eyeing a stake in ManipalCigna Health Insurance, with a deal estimated at ₹4,000 crore.

In a regulatory filing, LIC confirmed it is in advanced negotiations to acquire a "substantial stake" in a standalone health insurer. However, no binding agreements have been signed yet. The corporation clarified that the finalization of the deal depends on multiple approvals, including those from the board and regulators.

Meanwhile, Mohanty acknowledged a slowdown in life insurance penetration despite efforts to streamline regulations. He highlighted the role of actuaries in tackling emerging risks, innovating insurance solutions, and ensuring financial stability in the sector.

LIC reported a 9% decline in net premium income for Q3 FY25, amounting to ₹1.06 lakh crore, while its standalone net profit rose 17% to ₹11,056 crore.

Department of Financial Services Secretary M. Nagaraju noted that leveraging actuarial expertise could help lower insurance premiums for the public. He stressed the need to boost insurance penetration, which currently stands at 3.7% in India, significantly lower than the global average of 7%.