Life Insurance Corporation of India (LIC) is considering buying a minority stake in a standalone health insurance company, according to sources. As the largest insurer in India, LIC aims to acquire less than 50% ownership, which would allow it to influence management decisions without having majority control.
An industry source noted, “LIC will have some stake, which will not be a majority but will still give it a say in management.” The corporation is keen on maintaining a strategic role in the health insurance sector.
India currently has seven standalone health insurance companies, including the publicly traded Star Health Insurance. LIC is interested in the rapidly growing health insurance market, believing it will expand further as healthcare costs rise.
“Health insurance holds great potential as people live longer and face higher medical expenses. Currently, only 3% of overall healthcare costs are covered by insurance,” another source mentioned.
The health insurance sector is now the fastest-growing part of the country’s insurance industry, fueled by rising healthcare costs and increased awareness of the need for coverage. While a Parliamentary Committee has suggested creating a composite license for insurers to offer life, general, or health insurance under one entity, LIC won’t need such a license to invest in a health insurance company.
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