LIC enters the health insurance market to expand its horizons

In a statement, Siddhartha Mohanty (Managing Director and Chief Executive Officer, LIC) says that LIC has plans to acquire health insurance. Since the company’s financial results were announced for the first quarter, Mohanty said that the company is looking for some assets this year. Instead of selling a vertical setup for insurance, the company starts to sell health insurance across the country.

Over 14.1 lakh agents were working under LIC, which serves as the largest agency force among different insurance companies worldwide. Sources revealed that most of the corporate agents are already circulating their health insurance for different private companies, as the regulatory bodies have allowed an agent to work for both life and non-life companies. However, these agents were supposed to sell LIC products. Nowadays, health insurance is majorly becoming a pull product with active coverage done by the young buyers, which gives an agent an opportunity to interact with the customers. Health insurance also helps life insurance gain profit.

Today, there are five health insurance companies, namely: Star Health and Allied Insurance, Aditya Birla Health Insurance, Niva Bupa, Manipal Cigna Health Insurance, and Care Health Insurance. Recently, the regulator gave permission to launch two other health insurance companies, Galaxy Health and Narayan Health. On Thursday, LIC reported an increase of about 9.6% in profit in the June quarter. Moreover, the market stock of the first share rose to 64% this year. While, in an individual business segment, market share rises up to 39.3%. Now, the total income for the quarter has expanded by 15.7% compared to the previous year.

Over the years, the multiple assets of LIC increased by 16.2%. Additionally, the solvent ratio has been improved from 1.9 to 2. However, the overall expense ratio declined by 11.9%, which in turn highlights the improved operational adequacy.