LIC plans to acquire stake in a health insurance firm by March 31, Says CEO Mohanty

Life Insurance Corporation (NSE:LIFI) of India (LIC) is likely to acquire an interest in a standalone health insurance company before the end of the current financial year (FY25), its Managing Director and CEO, Siddhartha Mohanty, said on Tuesday.

However, he wouldn't spill the beans about the specific company LIC is looking to tie up with. "We are actually pretty close now," he said.

"We are in the final stage of discussions, and entering the health insurance sector is a logical next step for LIC," Mohanty shared during his address at the Global Conference of Actuaries in Mumbai.
He also noted that "since regulatory approvals take time, I am optimistic that a decision will be made before the end of this financial year, by March 31."

Mohanty, however, clarified that the entity does not intend to take a controlling stake in the health insurance firm. "Expanding into the health insurance business is a natural progression for LIC," he added.

Earlier in FY25, the company had said it intended to enter the health insurance business and also announced its intentions to make a standalone investment in a health insurance company.

India now has seven independent health insurers, such as Star Health & Allied Insurance, Niva Bupa Health Insurance, Care Health Insurance, Aditya Birla Health Insurance, ManipalCigna Health Insurance, Narayana Health Insurance, and Galaxy Health Insurance.

In addition to its health insurance move, LIC has also approached the Reserve Bank of India (RBI) for additional long-term bonds. Previously, the insurance giant requested approval for 40-year bonds, which the RBI granted. LIC is now in talks to secure 50-year and even 100-year bonds.

"We are long-term investors, and we have contractual obligations to fulfill as per agreements. Therefore, it is crucial to manage investments and asset-liability alignment effectively… Long-term bonds are common in Western countries," Mohanty explained.

The RBI has already launched 50-year bonds to accommodate the growing demand from insurance and pension funds, he added.