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LIC's Managing Director (MD) and Chief Executive Officer (CEO) Siddharth Mohanty said during an event that the deal is expected to be announced by the end of this financial year.

LIC Health Insurance: India's state-owned insurance company Life Insurance Corporation of India (LIC) on Tuesday informed the stock exchanges that it is in the final stages of talks to buy a 'significant' stake in a standalone health insurer to expand its reach in the health insurance segment. However, this stake will not be a majority stake.

What did LIC say?

LIC's Managing Director (MD) and Chief Executive Officer (CEO) Siddharth Mohanty said during an event that the deal is expected to be announced by the end of this financial year. He also clarified that no binding agreement has been reached yet. This deal will depend on LIC's board of directors, regulatory approval, and other approvals.

Mohanty did not reveal the name of the company but made it clear that LIC will not buy more than 51 percent stake in any company. He said, "We have plans. Discussions are in the final stages. Getting into health insurance is a natural step for LIC. Since regulatory approval takes time, I hope a decision can be taken by the end of this financial year." Status of standalone health insurers in India

There are currently seven standalone health insurers in India-

Star Health & Allied Insurance

Niva Bhupa Health Insurance

Care Health Insurance

Aditya Birla Health Insurance

ManipalCigna Health Insurance

Narayana Health Insurance

Galaxy Health Insurance

LIC seeks RBI approval for 100-year bond

Mohanty also said that LIC has requested the Reserve Bank of India (RBI) to issue additional long-term bonds, including 100-year bonds. He said, "We are long-term investors. We have contractual obligations, so we have to do asset liability management properly. Western countries have long-term bonds." In November 2023, RBI issued a 50-year bond, which was well received by insurers and pension funds.

A look at the state of health insurance in India

According to a Forbes report, in 2021, about 514 million people in India were covered under health insurance, which is only 37 percent of the country's population. At the same time, about 400 million people do not have any health insurance facility. 70 percent of the population is covered under public or private health insurance, while 30 percent are without insurance.

The gross written premium of the Indian health insurance industry was over Rs 637 billion in 2021. Talking about the states, Maharashtra topped the list with a 32 percent share with a premium of Rs 183 billion. At the same time, according to the Economic Survey 2022-23, the Government of India's expenditure on healthcare was 2.1 percent of GDP. In 2019, 48 percent of the total healthcare expenditure came from out-of-pocket payments, down from 64.2 percent in 2014.