The expansion of state-owned company Life Insurance Corporation of India (LIC) into the health insurance domain could significantly boost its market share in the country, by capitalising on its existing customer base, says GlobalData, a data and analytics company.
Health insurance market projected to expand at 12.5% CAGR till 2028
The country’s biggest insurer is expected to enter the health insurance industry in 2025 by acquiring a stake in a standalone health insurer.
Health insurance represents the most rapidly expanding segment within India’s insurance industry, driven by escalating healthcare expenses and a heightened recognition of the necessity for extensive health coverage. Moreover, health insurance premiums in the country are experiencing an upward trend, driven by the increasing demand for private healthcare services and escalating service costs. This trend is anticipated to persist in 2025, bolstering the expansion of the health insurance segment.
According to GlobalData’s Insurance Database, India’s health insurance industry is expected to grow at a compound annual growth rate (CAGR) of 12.5% from INR1.3tn ($15.6bn) in 2024 to INR2.1tn in 2028, in terms of gross written premiums (GWP).
Strategy
Ms Manogna Vangari, insurance analyst at GlobalData, said, “By acquiring a stake in a private, independent health insurance firm, LIC seeks to establish a strong foothold in the nation’s burgeoning health insurance industry. This strategy is consistent with LIC’s objective of retaining strategic participation while minimising the risks inherent in majority ownership.”
Moreover, the government, along with the IRDAI, is keen to broaden the scope of health insurance, targeting universal coverage by 2047. The entry of LIC into the health insurance arena is anticipated to significantly contribute to this initiative, given the corporation’s robust brand recognition and its expansive sales force, which exceeds 1.3m agents.
Currently, there are seven standalone health insurance companies operating in the Indian health insurance market: Star Health & Allied Insurance, Niva Bupa Health Insurance, Care Health Insurance, Aditya Birla Health Insurance, ManipalCigna Health Insurance, Narayana Health Insurance, and Galaxy Health Insurance. Several other companies providing life and general insurance policies also offer health insurance.