LIC stock price up by more than 5% today

14 Jun 2024 , 01:40 PM

Life Insurance Corporation (LIC) shares rose more than 6% on the BSE on Friday (June 14), following news of the insurer’s entry into the health insurance market. 

At around 1.18 PM, LIC was trading 4.54% higher at Rs 1,047.80 per piece, against the previous close of Rs 1,002.30 on NSE. 

This spike comes after news that LIC intends to enter the health insurance market through a private health insurer. According to sources, LIC is planning to acquire one of the five private freestanding health insurance businesses.

In May, LIC Chairman Siddhartha Mohanty emphasised LIC’s potential in the health insurance business. Mohanty expounded on LIC’s strategic goals, saying, “Once the composite license is approved, LIC’s natural choice will be to enter the health insurance space.”

A composite license would allow insurers to provide comprehensive insurance alternatives by merging life, health, and savings into a single policy. This could result in lower premiums and a simpler claims process for customers.

Earlier this year, a legislative commission suggested the implementation of a composite license that would allow insurers to offer life, general, and health insurance through a single entity, with the goal of increasing insurance penetration in the country.

Mohanty explained that, while LIC lacks competence in other general insurances such as property and fire, the company does have experience in health insurance through its health fixed benefit products.

We have some experience in this area, although our products are fixed benefits rather than indemnity, like Mediclaim. We are looking into both organic and inorganic opportunities, including prospective acquisitions, to develop a foothold in the health insurance industry, he said.

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