The Life Insurance Corporation of India (LIC) is in the final stages of acquiring a stake in a health insurance company, with formalities nearly complete and a board decision expected within two to three months, CEO Sidhartha Mohanty, said at the insurer’s post-results press briefing.
“There is no change in our stance,” an LIC official said, reaffirming the insurer’s decision to entering the health insurance space.
Unlike typical acquisitions where a committee might determine stake size, LIC has opted for internal deliberations to decide the quantum of investment. “There is no committee, and our internal team is handling it,” the Mohanty added.
Additionally, LIC has invested Rs 80,000 crore in corporate bonds in FY25 and plans to increase this, depending on market conditions and paper quality. The company will focus primarily on AAA-rated instruments.
“We are quality conscious and will subscribe mostly to AAA papers,” Mohanty said.
Mohanty also disclosed that discussions are underway to operationalise Forward Rate Agreements (FRAs). “We’re finalising approvals and logistics,” he said.
On premium collections, Mohanty acknowledged that recent changes in product regulations, implemented from October last year, have temporarily dented its first-year premiums. While individual new business premiums improved sequentially in Q4, the full-year annualised premium equivalent (APE) showed a marginal dip.
“The impact from Q3 spilled over into Q4. Our agents had to adjust to new products and designs,” Mohanty said. However, he added, he expects the situation to stabilise this year.
While LIC’s 13th-month persistency ratio has slipped slightly, he said he expects improvement as new products with higher ticket sizes stabilise and distribution adapts.
The company is also tailoring products to improve long-term retention and profitability.
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