LIC: A parliamentary panel had suggested introducing a composite license in February 2024 to reduce cost and compliance burden. Currently, life insurance companies can only offer long term benefits cover under health insurance.
The country’s largest government insurance company Life Insurance Corporation (LIC) is now preparing to sell health insurance. The company is looking for opportunities to acquire some small companies related to the segment to enter this segment. This step has been taken amid the proposal to allow composite insurance companies in this segment. It is expected that the new government may allow composite licenses. LIC said that we lack expertise in general insurance, but we are interested in health insurance and are also considering opportunities for inorganic development.
A parliamentary panel had suggested introducing a composite license in February 2024 to reduce cost and compliance burden. Currently, life insurance companies can only offer long term benefits cover under health insurance. Amendments to the Insurance Act will be required for life insurance companies to provide hospitalization and indemnity cover.
India is a very underdeveloped market in terms of insurance issued
. According to the data, at the end of 2022-23, less than 2.3 crore health insurance covers were issued, covering 55 crore people. Of this, about 30 crore were government-sponsored businesses, while about 20 crore people are insured through group insurance.
Emphasis on increasing insurance cover to more people
The government and regulators want more health covers to be issued and LIC’s entry into this sector is expected to bring a big change. IRDA data showed that during the financial year 2022-23, life insurance companies issued 2.9 lakh new policies covering about 3 lakh people.
