- GlobalData says market is projected to grow at an annual growth rate of 12.5%, increasing from $15.6b in 2024 to $25.3b by 2028.
- Corporation’s strong brand recognition and its vast sales force, comprising over 1.3m agents, are likely to facilitate the transition.
The Life Insurance Corporation of India (LIC) is poised to make a significant entry into the health insurance market in 2025 by acquiring a stake in a standalone health insurance entity.
The strategic move is anticipated to enhance LIC’s market share, reinforcing its position as the largest insurer in the country.
According to a report by GlobalData, India’s health insurance industry is projected to grow at a compound annual growth rate (CAGR) of 12.5 per cent, increasing from Rs1.3 trillion ($15.6 billion) in 2024 to Rs2.1 trillion ($25.3 billion) by 2028.
The growth is primarily driven by rising healthcare costs and an increasing public awareness of the necessity for comprehensive health coverage.
Manogna Vangari, Insurance Analyst at GlobalData, said that by leveraging its extensive existing customer base, LIC’s foray into health insurance could significantly bolster its market presence.
Strong growth
Health insurance represents the most rapidly expanding segment of India’s insurance landscape, with premiums on the rise due to the growing demand for private healthcare services.
Vangari said the upward trend is expected to continue, further accelerating the growth of the health insurance sector.
LIC’s strategy of acquiring a stake in a private health insurance firm aligns with its goal of maintaining a “strategic presence” in the market while minimising the risks associated with majority ownership.
Strong brand recognition
“The approach not only allows LIC to establish itself in the burgeoning health insurance industry but also positions it to contribute to the government’s objective of achieving universal health coverage by 2047. The corporation’s strong brand recognition and its vast sales force, comprising over 1.3 million agents, are likely to facilitate this transition,” Vangari said.
Currently, the Indian health insurance market is served by several standalone companies, including Star Health & Allied Insurance and Niva Bupa Health Insurance, among others. LIC’s entry is expected to intensify competition within this sector.
Vangari emphasises that LIC holds a competitive advantage over its private-sector counterparts, particularly due to its superior Claim Settlement Ratio (CSR), a crucial indicator of an insurer’s reliability. A higher CSR reflects the company’s commitment to promptly settling claims, thereby enhancing customer trust.