LIC Likely to Acquire Stake in ManipalCigna for Rs 4,000 Crore Next Week
LIC Set to Acquire Stake in Health Insurer by March 31, Says CEO
Life Insurance Corporation of India (LIC), the country’s largest insurer, is poised to acquire a stake in a health insurance company within the next two weeks, with an announcement expected before March 31, CEO Siddhartha Mohanty revealed Tuesday. Speaking on the sidelines of the GCA25 event, Mohanty said, “It is a natural choice for LIC to be in health insurance, discussion is going on at final stage,” though he withheld the target company’s identity. LIC, he clarified, will not seek a controlling 51% stake, with the final share depending on board decisions and valuations.
The state-owned giant, barred from offering indemnity-based health covers like hospitalization under current regulations, aims to diversify via this strategic move. Speculation points to ManipalCigna as a potential target, with media reports suggesting a Rs 4,000 crore deal. LIC’s later regulatory filing confirmed “advanced talks” for a “substantial stake” in a standalone health insurer, cautioning, “The execution and ultimate consummation of the deal is subject to various factors, including approval of the Board, regulatory approvals and other approvals, if any, before executing any binding agreements. There can be no guarantee or assurance of the execution/consummation of the potential deal.”
Mohanty also flagged a “slowdown” in life insurance growth and penetration, despite a shift to principle-based regulations. “This dual reality calls for a comprehensive review of LIC’s approach,” he said, noting actuaries’ role in tackling emerging risks and ensuring sustainability. LIC’s Q3 FY25 results showed a 9% drop in net premium income to Rs 1.06 lakh crore, though net profit rose 17% to Rs 11,056 crore. Department of Financial Services Secretary M Nagaraju added that actuaries could lower premiums through scientific risk assessment, boosting India’s 3.7% insurance penetration—well below the global 7% average.
The move, aligning with LIC’s Rs 4.79 lakh crore market cap dominance, positions it to challenge players like Star Health and Niva Bupa in a health insurance market projected to hit Rs 2.1 trillion by 2028, per GlobalData, leveraging its 1.3 million-agent network amid rising demand and competition.
