In addition to reporting better FY24 results and dividend recommendations, LIC investigates health insurance entrance, takes composite licenses into consideration, and seeks to increase market penetration.
MUMBAI: The government-owned Life Insurance Corporation is looking at acquisition possibilities and may get into the health insurance market. The action takes place in the midst of a plan to let composite insurance providers on the market.
"We have completed some internal groundwork, and it is anticipated that the incoming government would approve composite licenses.
LIC chairman Siddhartha Mohanty said, "We are interested in health insurance and are also evaluating potential for inorganic expansion, notwithstanding our lack of experience in general insurance. A legislative commission recommended the introduction of composite insurance licenses in February 2024 in an effort to lower insurer costs and ease their compliance load. At the moment, life insurance firms are limited to providing long-term benefit coverage. In order for life insurance firms to provide hospitalization and indemnity coverage, the Insurance Act would need to be amended.
LIC's move into health insurance is anticipated to increase coverage
Less than 2.3 crore health insurance policies covering 55 crore people were granted by the end of 2022–2023, indicating how underpenetrated the insurance sector is in India. Of this, around 20 crore were protected via group insurance, while another 30 crore were covered by government-sponsored businesses. More health insurance policies should be granted, according to the government and regulators, and LIC's entrance into the market should encourage this. According to Irdai statistics, life insurers issued under 2.9 lakh new policies covering about 3 lakh lives during FY23.
Mohanty made the announcement of LIC's FY24 financial results on Monday. For the quarter that ended in March 2024, LIC recorded a net profit of Rs 13,762 crore, which was marginally more than the Rs 13,427 crore from the same period the year before. A contingency for salary revision affected profits, and increased group business was credited with lower margins.
The insurance giant said that its profit after tax (PAT) increased by 11% to Rs 40,676 crore in the previous fiscal year.
Subject to shareholder approval, LIC has proposed a final dividend of Rs 6 per share for the fiscal year 2023–2024. The total interim and recommended final dividend was Rs 10 per share after an additional interim dividend of Rs 4 per share was announced and paid throughout the year.
"We concentrated on improving company margins and changing the direction of our product mix during the course of the previous year. Within our own company, the percentage of subpar business has more than doubled. In order to increase our market share across categories, we now want to concentrate our strategic initiatives," Mohanty said.
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