LIC mulling entry into health insurance space, assessing acquisition: Report

State-owned insurance group LIC is mulling a foray into health insurance sector and is eyeing potential acquisItions, reported Times of India quoting LIC chairman Siddhartha Mohanty. This comes amid the proposal to allow composite insurance companies in the sector.

"There is an expectation that composite licences may be permitted by the new govt, and we have done some internal groundwork. While we lack expertise in general insurance, we are interested in health insurance and are also considering opportunities for inorganic growth," LIC chairman Siddhartha Mohanty told Times of India.

Composite Insurance License

A parliamentary committee in February, recommended the implementation of composite insurance licenses to reduce expenses and regulatory burdens for insurance providers. Currently, life insurance companies can not offer extended health insurance benefits. Meanwhile, enabling insurance companies to furnish hospitalization and indemnity coverage would necessitate an amendment to the Insurance Act.

Insurance sector in India is significantly under penetrated. Less than 2.3 crore health insurance policy covers were issued by the end of 2022-23, covering approximately 55 crore individuals. Government covered policies covered nearly 30 crore individuals while group insurance accounted for nearly 20 crore. As per IRDAI, life insurers issued fewer than 2.9 lakh new policies during FY23, covering almost 3 lakh lives.

LIC performance

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

"The Board of Directors has recommended a final dividend of Rs. 6 per equity share of Rs.10 each for the financial year 2023-24, subject to approval of shareholders in the ensuing Annual General Meeting of the Corporation," it said.

LIC's net income from investments increased by 24.43% year-over-year to Rs 84,425.45 crore in Q4FY24 and net profit for FY24 was Rs 40,676 crore, compared to Rs 36,397 crore in FY23.

Additional pension liability due to wage revision for employees stood at Rs 6,306.29 crore of which Rs 829.19 crore has been recognized in FY24 across respective segments

Also watch: LIC cautions against fraudulent social media advertisements