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Life Insurance Corporation of India (LIC) is exploring a stake acquisition in a health insurance company, with a decision expected by March 2025. The move would expand LIC’s offerings into the health insurance sector, intensifying competition with established private players. Additionally, LIC is in talks with the RBI for the issuance of long-term bonds.

LIC’s Health Insurance Expansion LIC’s CEO Siddhartha Mohanty announced the insurer’s plans to finalize a decision on acquiring a stake in a health insurance company by the end of the financial year. While LIC will not seek a majority stake, the move represents a strategic expansion into the health insurance sector.

Currently, LIC offers life insurance policies, pension plans, and investment-linked insurance products. Entering the health insurance market will diversify its portfolio and provide consumers with comprehensive insurance solutions.

Competition in the Health Insurance Sector The Indian health insurance sector has grown significantly, with companies like Star Health Insurance, Aditya Birla Health Insurance, Niva Bupa Health Insurance, and Care Health Insurance leading the market. LIC’s entry will introduce a new wave of competition, leveraging its brand trust and wide distribution network to capture market share.

While specifics of the acquisition remain undisclosed, Mohanty emphasized that LIC would explore all possibilities without acquiring a controlling stake.

LIC’s Interest in Long-Term Bonds In a separate development, LIC is also in discussions with the Reserve Bank of India (RBI) regarding the issuance of longer-term bonds. While India currently offers bonds with maturities of up to 40 years, LIC is pushing for 50-year or even 100-year bonds.

Long-term bonds are particularly beneficial for insurance companies with long-term liabilities, such as LIC’s pension and life insurance products. Mohanty highlighted ongoing discussions with the RBI, indicating that the central bank is considering the proposal.

Conclusion LIC’s planned expansion into the health insurance sector and its push for long-term bonds reflect its strategic growth objectives. By diversifying its offerings and exploring new financial instruments, LIC aims to strengthen its market presence and deliver greater value to its customers. The final decision on the health insurance acquisition is eagerly awaited by industry watchers and stakeholders.