LIC evaluating stake in health insurer, deal unlikely in FY25: CEO

Siddhartha Mohanty

Life Insurance Corporation of India (LIC) is evaluating a potential acquisition in the standalone health insurance space but does not expect the deal to materialise within FY25 due to regulatory and valuation processes, Managing Director and CEO Siddhartha Mohanty said on Friday.

“The groundwork is ongoing, and we are in the process of identifying a suitable health insurance company. However, factors such as regulatory approvals and valuation will take time, so expanding LIC’s health insurance portfolio through an acquisition is not feasible in the current fiscal year,” Siddhartha Mohanty stated during a post-results media call.

Currently, life insurance companies are only permitted to offer extended health benefits. Entering the health insurance market with hospitalization and indemnity coverage would require an amendment to the Insurance Act - introduction of composite licenses, a move that was not included in the Union Budget 2025.

Life Insurance Corporation reported a 9 percent decline in its net premium income on February 7 which moderated to Rs 1,06,891 crore in the third quarter of the current fiscal from Rs 1,17,017 crore in the same period a year ago.

Net Premium Income for life insurance companies is the total premium collected from policyholders after deducting reinsurance costs. It represents the actual revenue that an insurer earns from underwriting policies.

The country's biggest insurer Life Insurance reported 17 percent rise in its standalone net profit to Rs 11,056 crore in the third quarter ended December 2024. It had reported a net profit of Rs 9,444 crore in the year-ago period.

The total income also came down to Rs 2,01,994 crore in the latest December quarter compared to Rs 2,12,447 crore in the year-ago period, LIC said in a regulatory filing.