LIC to Buy Stake in ManipalCigna: What Insurer Is Eyeing in Health Segment

India’s state-owned insurance giant LIC is on the verge of acquiring a substantial stake in Mumbai-based health insurer ManipalCigna. The deal would mark LIC’s entry into India's fast-growing standalone health insurance market. 

The transaction is in the finalisation stage, with LIC planning to acquire a 40-49% stake in the Ranjan Pai-led company, according to a report by The Economic Times (ET). The deal is expected to value ManipalCigna at Rs 3,500-3,750 crore. 

Currently, the company is jointly owned by Pai’s Manipal Education & Medical Group (51%) and US-based Cigna Corporation (49%). 

As per ET’s report, LIC will primarily infuse fresh capital to dilute the stakes of both existing shareholders. Additionally, a smaller portion of secondary share sales will be carried out by Manipal and Cigna. 

LIC’s Health Insurance Expansion Plans 

Earlier this month, LIC Managing Director and CEO Siddhartha Mohanty stated that the company plans to acquire a ‘substantial’ stake in a standalone health insurer to expand its footprint in the segment. 

“We have plans. Discussions are at the final stage. It is a natural choice for LIC to enter health insurance. Since regulatory approvals take time, I am hopeful that a decision will be made within this financial year, before March 31,” Mohanty said. 

LIC, the world’s 16th largest insurer, has primarily focused on the life insurance segment. It reported a net premium income of Rs 1,07,302 crore for the third quarter. 

Meanwhile, according to the India Brand Equity Foundation (IBEF), non-life insurers in India saw a 19.5% year-over-year increase in premium income to Rs 1,14,972 crore ($13.8 billion) in FY24, driven by strong demand for health and motor policies. Growth in the sector was primarily fueled by group health insurance, motor insurance, and crop insurance. 

India currently has seven standalone health insurers, 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.