MUMBAI: The national insurer Life Insurance Corporation (LIC) will soon announce its foray into the health insurance sector, with ambitions to become a significant player, a top official has said at LIC set to enter health insurance sector, eyes major market share.
The insurance industry, especially life insurers, had been anticipating government amendments to the Insurance Act that would introduce a composite licensing regime, allowing life insurers to offer non-life products, including the highly lucrative health policies at LIC set to enter health insurance sector, eyes major market share.
At present, the domestic insurance industry consists of 70 players, with nearly half a dozen being standalone health insurers and the rest offering life and general insurance products at LIC set to enter health insurance sector, eyes major market share.
Many Western countries have adopted the composite licensing model, which was allowed in India until 2016, when the Insurance Regulatory and Development Authority of India (IRDAI) prohibited life insurers from providing general and health products at LIC set to enter health insurance sector, eyes major market share.
LIC first revealed its health insurance plans this May, expressing interest in acquiring a majority stake in an existing health insurer to gain an early advantage rather than starting from scratch. “We want to be a large and serious player in the health insurance segment,” Chief Executive Siddhartha Mohanty told TNIE in a recent interaction. “We are sure we can make it really big because the market is very huge,” he added at LIC set to enter health insurance sector, eyes major market share at LIC set to enter health insurance sector, eyes major market share.
Reiterating the company’s preference for acquiring a stake rather than launching a new entity, Mohanty said, “We will be buying a large stake in an existing health insurance company, and we are working hard on that. Hopefully, soon we will have an announcement to make on that front at LIC set to enter health insurance sector, eyes major market share.”
In February, a parliamentary panel recommended establishing a composite insurance licensing regime to reduce costs and ease the compliance burden for insurers. Currently, life insurance companies are limited to offering only long-term health benefits. An amendment to the Insurance Act would be necessary to allow them to provide hospitalisation and indemnity coverage at LIC set to enter health insurance sector, eyes major market share.
The insurance sector in India is still notably underdeveloped. While health insurance covers over 60% of the population, or about 650 million people, life insurance penetration is less than 5%. About 200 million of them have group insurance coverage at LIC, which is planning to enter the health insurance market and is aiming for a significant market share, while 350 million are insured under government-sponsored programs.
The government and IRDAI are eager to expand health insurance coverage, aiming for universal coverage by 2047. LIC’s entry into the health insurance market is expected to boost these efforts, given the corporation’s strong brand presence and its extensive sales force of over 1.3 million at LIC set to enter health insurance sector, eyes major market share.
For the financial year ending in March 2024, LIC reported a net profit of Rs 40,676 crore, up from Rs 36,397 crore in the previous fiscal year. The total premium income for the year was Rs 4,75,070 crore, compared to Rs 4,74,005 crore in March 2023.