Summary :
LIC is contemplating a move into the health insurance sector. LIC chairman Siddhartha Mohanty revealed that the company is assessing potential acquisition opportunities to facilitate this entry. This strategic consideration aligns with anticipated government policies allowing composite insurance companies in the sector.
The government-owned Life Insurance Corporation (LIC) is considering entering the health insurance sector and is evaluating potential acquisition opportunities, according to LIC chairman Siddhartha Mohanty, as reported by The Times of India. This move coincides with a proposal to permit composite insurance companies in the industry.
In February 2024, a parliamentary committee recommended introducing composite insurance licenses to help reduce costs and regulatory burdens for insurance providers. Currently, life insurance companies are limited to offering only extended health insurance benefits. Allowing these companies to provide hospitalization and indemnity coverage would require an amendment to the Insurance Act.
LIC's entry into the health insurance market is expected to enhance coverage.
India's insurance market remains significantly under-penetrated, with fewer than 2.3 crore health insurance policies issued by the end of 2022-23, covering approximately 55 crore individuals. Government-sponsored initiatives covered nearly 30 crore people, while group insurance accounted for nearly 20 crore. Both the government and regulators are advocating for an increase in health insurance policy issuance, and LIC's entry into this market could play a crucial role in this effort.
LIC Q4 Results
LIC, the insurance giant, reported a marginal 2 per cent rise in net profit to Rs 13,763 crore for the fourth quarter ending March 2024, attributed to provisions made for a wage hike. This compares to a profit of Rs 13,428 crore in the corresponding quarter a year earlier. According to a regulatory filing, the insurer's total income during the reporting quarter increased to Rs 2,50,923 crore from Rs 2,00,185 crore in the same period of the previous fiscal year.
In the latest January-March quarter, LIC's income from first-year premiums saw improvement, reaching Rs 13,810 crore, compared to Rs 12,811 crore in the corresponding period of the previous fiscal year. Additionally, the income from renewal premiums during the reporting period increased to Rs 77,368 crore, up from Rs 76,009 crore a year ago.
For the financial year ending March 2024, LIC reported a profit of Rs 40,676 crore, an increase from Rs 36,397 crore in the previous fiscal year. The total premium income for the year ending March 2024 stood at Rs 4,75,070 crore, slightly higher than Rs 4,74,005 crore in the year ending March 2023. In the individual segment, a total of 2,03,92,973 policies were sold in FY24, compared to 2,04,28,937 policies sold in the previous fiscal year. The board proposed a final dividend of Rs 6 per share for the fiscal year 2023-24, pending approval from shareholders, according to LIC Chairman.
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