According to GlobalData, India’s health insurance industry is expected to grow at a compound annual growth rate (CAGR) of 12.5 per cent from 1.3 lakh crore in 2024 to Rs 2.1 lakh crore in 2028, in terms of gross written premiums (GWP).
By capitalising on its existing customer base, the company’s expansion into the health insurance domain could significantly boost its market share in the insurance sector in the country, said GlobalData, a leading data and analytics company.
By acquiring a stake in a private, independent health insurance firm, LIC seeks to establish a strong foothold in the nation’s burgeoning health insurance industry, said Manogna Vangari, insurance analyst at GlobalData.
This strategy is consistent with LIC’s objective of retaining strategic participation while minimizing the risks inherent in majority ownership, Vangari added.
Last week, LIC MD and CEO Siddhartha Mohanty said the state-owned company will take a call on buying a stake in a standalone health insurer in the current financial year and “the groundworks are done”.
The government, along with the Insurance Regulatory and Development Authority of India (IRDAI) is keen to broaden the scope of health insurance, targeting universal coverage by 2047.
The entry of LIC into the health insurance arena is anticipated to significantly contribute to this initiative, given the corporation’s robust brand recognition and its expansive sales force, which exceeds 1.3 million agents, the report said.
“This strategic acquisition move of LIC is expected to be particularly fortuitous over the next five years, thereby increasing its market share over its competitors,” Vangari said.
Currently, there are seven standalone health insurance companies operating in the Indian health insurance market.
LIC reported a standalone net profit of Rs 7,621 crore for the July-September quarter (Q2) of the current financial year, which is 4 per cent lower than the corresponding figure of Rs 7,925 crore for the same quarter last year, according to a regulatory filing by the company.
Net premium income during the second quarter went up by 11 per cent to Rs 1.19 lakh crore, from Rs 1.07 lakh crore in the same period of the previous year.
--IANS
