Life Insurance Corporation (LIC) is reportedly planning to enter the health insurance sector. The insurer is planning its health insurance foray amid expectations that the new Government coming in after the ongoing Lok Sabha elections may allow composite insurance companies to operate within the industry.
India’s insurance market remains notably under-penetrated, with fewer than 2.3 crore health insurance policies issued by the close of 2022-23, covering around 55 crore people. Government-sponsored programs insured nearly 30 crore individuals, while group insurance covered about 20 crore people. Both government bodies and regulators are pushing for a higher issuance of health insurance policies. LIC’s entry is expected to spur growth in this sector.
Media reports quoted LIC chairman Siddhartha Mohanty as saying that the company expects the new government to allow composite licenses. LIC has done some internal preparation for this possibility. While LIC lacks experience in general insurance, the insurer is interested in health insurance and also considering growth through acquisitions.
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LIC Q4 earnings
On Monday (May 27), LIC shared its financial report for the fourth quarter ending March 2024. The company noted a modest 2% bump in net profit, totaling Rs 13,763 crore. This uptick has been attributed to setting aside funds for a wage hike. Compared to the same quarter last year, where LIC recorded Rs 13,428 crore in net profit, it’s a slight increase this time.
LIC’s earnings this quarter really shot up, jumping to around Rs 2.51 trillion from about Rs 2 trillion in the same period last year. The company saw a nice bump in first-year premium income, hitting roughly Rs 13.8 billion compared to around Rs 12.8 billion last year. Renewal premium income also got a boost, reaching about Rs 77.4 billion, up from around Rs 76 billion last year.
LIC made a profit about Rs 40.7 billion, which is more than Rs 36.4 billion they earned from the previous year. Their total income for the whole year was about Rs 4.75 trillion, which is a bit higher than in the year ending March 2023 which was around Rs 4.74 trillion.
The LIC board has put forward for a proposal of a final dividend of Rs 6 per share for the financial year 2023-24.
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