LIC Poised to Expand into Health Insurance, Verdict Expected by March End

The Life Insurance Corporation of India (LIC) is exploring the possibility of acquiring a stake in a health insurance company, with a decision expected by the end of March, according to the company’s Chief Executive Officer, Siddhartha Mohanty. Speaking on Tuesday, Mohanty expressed confidence that the state-run insurance giant could reach a conclusion on the matter before the close of the current financial year.

“I am very much hopeful that within this financial year, before 31st March, some decision can be taken,” Mohanty stated, indicating that LIC is actively evaluating its options in the health insurance sector.

However, Mohanty clarified that LIC does not intend to acquire a majority stake in the target company. “LIC will not have a 51% stake. We are exploring all possibilities,” he said, without disclosing specific details about the potential deal or the company under consideration.

This move signals LIC’s strategic interest in expanding its footprint in the health insurance market, which has seen steady growth in recent years. The decision to limit its stake to below 51% suggests that LIC may prefer a collaborative or minority partnership rather than full control over the prospective entity.

While LIC has traditionally focused on life insurance, the potential foray into health insurance reflects the company’s effort to diversify its offerings and strengthen its position in India’s broader insurance sector. The outcome of this evaluation is expected to be clear by the end of March, as LIC weighs its options and finalizes its strategy.

Currently, LIC’s portfolio is focused on life insurance, pension plans, and investment-linked insurance products. However, it does not yet offer standalone health insurance products. A move into the health insurance market would represent a significant diversification of LIC’s offerings, allowing it to compete more directly with established players such as Star Health Insurance, Aditya Birla Health Insurance, Niva Bupa Health Insurance, and Care Health Insurance. This strategic shift could position LIC to tap into the growing demand for health coverage in India, where rising healthcare costs and increased awareness about health protection have fueled demand for comprehensive health insurance plans.

If LIC proceeds with the stake acquisition, it will mark a major step toward expanding its footprint in the non-life insurance sector. While the company’s CEO, Siddhartha Mohanty, has confirmed that LIC does not intend to acquire a majority stake — signaling that it prefers a minority or strategic partnership — the move would still enhance LIC’s competitive position in the broader insurance market.

In addition to exploring opportunities in the health insurance sector, LIC is also engaging with the Reserve Bank of India (RBI) regarding the issuance of longer-term bonds. Presently, India issues bonds with maturities of 20, 30, and 40 years. However, LIC is advocating for the introduction of even longer-term instruments, such as 50-year and 100-year bonds.

Mohanty noted that LIC’s interest in such long-duration bonds stems from the company’s need to match its long-term liabilities with suitable investment instruments. Life insurance companies typically require long-term assets to manage the payout obligations associated with life and pension policies. The availability of 50-year and 100-year bonds would provide LIC with more stable and predictable investment options, helping the insurer to better align its asset-liability management strategy.

LIC’s dual focus on health insurance and longer-term bonds reflects its broader strategy to diversify its product portfolio and strengthen its financial foundation. The health insurance market offers significant growth potential, while access to longer-term bonds would enhance LIC’s ability to manage its long-term obligations more effectively. The outcome of both these strategic initiatives could have a meaningful impact on LIC’s future growth and market positioning.