State-owned insurer Life Insurance Corporation of India (LIC) plans to enter the health insurance sector by 2025, reportedly through the acquisition of a stake in a standalone health insurance provider.
This expansion strategy is expected to bolster LIC’s market presence by tapping into its extensive customer base, according to a report from GlobalData, a leading analytics firm.
GlobalData noted that India’s health insurance market is one of the fastest-growing segments in the broader insurance industry. Rising medical costs and increased public awareness of the need for health coverage are key drivers of this growth.
The segment is also experiencing higher premium rates, reflecting the increased demand for private healthcare services. This trend is expected to continue, further fuelling the sector’s expansion in the coming years.
GlobalData’s Insurance Database projects a compound annual growth rate (CAGR) of 12.5% in the gross written premiums (GWP) of India’s health insurance market, increasing from INR 1.3 trillion in 2024 to INR 2.1 trillion by 2028.
Manogna Vangari, insurance analyst at GlobalData, said LIC’s anticipated acquisition in the health insurance space represents a strategic approach to gain a foothold in the rapidly expanding market.
“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,” she said.
She explained that this move allows LIC to engage in the sector while mitigating risks that come with full ownership.
The Indian government, in collaboration with the Insurance Regulatory and Development Authority of India (IRDAI), has set a long-term goal of achieving universal health insurance coverage by 2047.
GlobalData said LIC’s planned entry into the health insurance market is expected to support this objective. The company’s broad network of over 1.3 million agents and strong brand recognition could help drive accessibility and penetration in the market.
India’s standalone health insurance providers currently include Star Health & Allied Insurance, Niva Bupa Health Insurance, Care Health Insurance, Aditya Birla Health Insurance, ManipalCigna Health Insurance, Narayana Health Insurance, and Galaxy Health Insurance. These firms operate alongside other life and general insurance companies offering health policies.
Vangari highlighted LIC’s competitive strength in terms of its claim settlement ratio (CSR), a key performance metric for insurers.
“This metric is a critical indicator of an insurer’s credibility and reliability. A higher CSR signifies that the insurance company settles claims promptly,” she said.
She added that the health insurance acquisition aligns with LIC’s broader strategic goals.
“The expected acquisition presents a strategic opportunity for LIC to redefine its role in the health insurance industry. The move presents a substantial prospect for LIC to capitalise on the escalating demand in health insurance, which is also expected to have a positive influence on its life insurance business,” she said.
