LIC considers entering the health insurance sector, evaluates the acquisition: Report

State-owned insurance group LIC is considering entering the health insurance sector and considering potential acquisitions, the Los Angeles Times reported, citing LIC CEO Siddhartha Mohanty. This is related to the proposal to allow insurance companies to operate in this sector.

“It is expected that the new government may allow composite licenses, so we have done some internal preparatory work. While we lack expertise in general insurance, we are interested in health insurance and are also looking at inorganic growth opportunities,” LIC Chairman Siddhartha Mohanty told Times of India.

Compound insurance license

In February, a parliamentary committee recommended the implementation of compound insurance licensing to reduce expenses and regulatory burdens for insurers. Currently, life insurance companies cannot offer extended health insurance benefits. Meanwhile, enabling insurers to provide hospitalization and compensation insurance would require an amendment to the Insurance Act.

The insurance sector in India is significantly underpenetrated. By the end of 2022-23, less than 2.3 crore health insurance policies have been issued, covering around 55 crore people. The policies covered by the government covered nearly 30 crore people, while group insurance accounted for nearly 20 crore. According to IRDAI, life insurers issued less than 2.9 lakh new policies in FY23, covering nearly 3 lakh lives.

LIC performance

The public sector insurer reported a net profit of Rs 13,781.59 crore for the quarter ended March 31, 2024, up 4.5% from Rs 13,190.79 crore reported in the same period of the previous fiscal .

“The board has recommended payment of a final dividend of Rs 6 per share of Rs 10 each for the financial year 2023-24, subject to shareholder approval at the next Annual General Meeting of the Corporation,” it said.

LIC’s net investment income increased by 24.43% year-on-year to Rs 84,425.45 crore in Q4 FY24 and net profit for FY24 was Rs 40,676 crore as against Rs 36,397 crore in FY24 23.

Additional pension liability on account of employee compensation change was Rs 6,306.29 crore, of which Rs 829.19 crore was recognized in FY24 in relevant segments

Also watch: LIC warns against fake ads on social media