LIC Expands into Health Insurance
Reportedly, LIC, or the State-run Life Insurance Corporation of India, is planning to enter the health insurance sector. The company has conducted internal groundwork, as per ‘The Times of India’. Chairman Siddharta Mohanty mentioned that they are exploring potential acquisition opportunities.
In February this year, a parliamentary panel suggested composite licensing for insurance firms. This license would enable insurers to offer both life and non-life products, including health, term, and vehicle insurance plans. Mohanty stated that Life Insurance Corporation has prepared internally for the potential introduction of composite licenses by the new government.
Mohanty noted that Life Insurance Corporation lacks expertise in general insurance but is interested in health insurance and is considering opportunities for growth through acquisitions. Currently, life companies are only permitted by IRDAI to offer long-term benefit covers under health insurance. Amendments to the Insurance Act would be necessary for them to provide hospitalization and indemnity cover.
The parliamentary panel also proposed reducing GST rates for health and term insurance policies from the current 18%.
Meanwhile, Life Insurance Corporation released its March quarter results for FY24. Its net profit increased marginally by 2% to Rs 13,673 crore year-on-year. Total income during the March 2024 quarter rose to Rs 2.51 lakh crore from Rs 2 lakh crore in the previous fiscal year. Renewal premiums amounted to Rs 77,368 crore during the quarter ended March 2024, compared to Rs 76,009 crore in the same period of the previous financial year.
