Why is LIC Foraying in Health Insurance Space?
Life Insurance Corporation (LIC) of India is set to foray into the health insurance sector by acquiring a majority stake in ManipalCigna Health Insurance. Let’s try to understand the reasons behind such a decision.
Why is LIC Foraying in Health Insurance Space?
Life Insurance Corporation (LIC) of India is set to foray into the health insurance sector by acquiring a majority stake in ManipalCigna Health Insurance. Let’s try to understand the reasons behind such a decision.
Why is LIC foraying into health insurance?
With a net premium of USD57 billion, LIC is the 16th largest insurer in the world. There are close to 30 million policyholders in the country, the public sector giant can take this opportunity to make inroads in the underpenetrated market in the country.
Growth prospects
Only 38.5% of the population are covered under health insurance schemes. Overall, out-of-pocket medical expenses accounted for about 45% of the total healthcare costs. So, looking at these shocking figures, LIC can successfully tap into the underpenetrated sector in the country by its wide range of networks.
What are the challenges?
Usurious treatment charges and absence of standardised treatment costs lead to inflated claims. This can eat up the health insurer’s profitability in the long run.
