LIC plans to take the acquisition route to get into the health insurance business said MD & CEO, Siddhartha Mohanty.
During the announcement of the financial results for the first quarter, Mohanty stated that the company aims to complete an acquisition this financial year.
“Rather than set up a vertical for insurance, we felt that we can acquire a company which will allow us to start selling health insurance across the country,” said Mohanty.
LIC boasts over 14.1 lakh agents, making it one of the most significant agency forces globally. Many of these agents are already selling health insurance for other private firms, as regulations allow agents to work for both life and non-life insurance companies. These agents are likely to shift to LIC’s health insurance products.
Industry sources highlight that health insurance is increasingly popular, especially among young buyers seeking coverage. This trend creates a chance for agents to connect with potential customers. Consequently, health insurance availability could also boost the life insurance sector.
Five major standalone health insurance companies operate: Star Health & Allied Insurance, Niva Bupa, Aditya Birla Health Insurance, Care Health Insurance, and ManipalCigna Health Insurance. Two additional health insurers, Galaxy Health and Narayana Health, recently received regulatory approval.
LIC reported a 9.6% increase in net profit for the June quarter, totalling Rs 10,461 crore compared to Rs 9,544 crore last year.
The company’s first-year premium income market share rose to 64%, up from 61.4% year-over-year. LIC held a 39.3% share in the individual business segment and dominated the group business with a 76.6% share.
Total premium income for the quarter increased by 15.7% to Rs 1,13,770 crore, up from Rs 98,363 crore last year. Individual business premiums grew by 7.04% to Rs 67,192 crore, while group business premiums rose by 30.9% to Rs 46,578 crore.
The value of new business for the quarter grew by 23.7% to Rs 1,610 crore, and the VNB margin improved by 20 basis points to 13.9%. LIC’s assets under management increased by 16.2% year-over-year, reaching Rs 54 lakh crore. The solvency ratio improved to 2 from 1.9, and the overall expense ratio decreased by 98 basis points to 11.9%, indicating better operational efficiency.
