Mumbai: Life Insurance Corp. of India (LIC) is exploring acquisition of a minority stake in a standalone health insurance company (SAHI), sources familiar with the matter told ET. LIC, India’s largest insurer, is looking to acquire less than 50% ownership, which will ensure that the behemoth will have influence over key management decisions, but without majority equity control.
“LIC will have some stake, which will not be a majority but will still give it a say in management,” an industry source said, adding that the corporation’s interest is in maintaining strategic involvement in the health insurance company.
India has seven standalone health insurance companies, including the listed Star Health Insurance.
LIC is looking to get into the rapidly growing health insurance market, which it believes is poised to expand further as healthcare costs continue to rise.
“Health insurance holds great potential as longevity and critical health expenses increase. Overall healthcare costs covered by insurance are only 3%,” said another source.
The health insurance sector is now the fastest-growing segment in the country’s insurance industry, driven by rising healthcare costs and increasing awareness of the need for coverage.
While a Parliamentary Committee has recommended issuing a composite license for an insurer to undertake life, general or health insurance under one entity, LIC will not require a composite license to buy a stake in a health insurance company.
