Top 5 Insurance Stocks in India – Indian Insurance Sector Analysis
Hi I Sunil welcome you to today’s post where we will talk about insurance sector we will see how to analyze a company and look at all the factors before investing and finally we will be top 5 in terms of market cap Talking about companies, let’s start, share this post with your friends.
Top 5 Insurance Stocks in India by Market Cap – Indian Insurance Sector Analysis best insurance stocks to buy in india best insurance stocks to invest in india best insurance stocks to buy in india best insurance stocks to invest in india best listed insurance companies in india
First, we will start with the concept of insurance and what is it?
Insurance is a contract where a person or entity receives financial protection against loss where the entity pays a premium against which the company indemnifies the entity against any loss and these insurance companies collect premiums from various customers and collect it and do risk analysis and how much loss they need to pay to customers
The 3 Most Important Things to Look for in Insurance
- First premium means – how much premium you pay on any policy and the premium you pay acts as income of insurance company
- The second is the policy limit – which means the maximum amount you can claim.
- The third is the deductible – which is taken by the companies so that there are no false claims,
There are two major departments
- The first is life insurance – which covers everything related. The other is general insurance for your life, tenure, life etc which includes motor, property, business etc. So when you analyze a company, you should see that the segment in which they operate before investing Let us try to understand the difference, life has a long term contract whereas normal has short term contracts and in life you can make periodic payments but in general you have to pay lump sum under life , you can claim that if any force majeure happens on the other hand or on maturity, in general the claim can be made only if they have a loss or special event. It is less risk of concentration in life but higher in general insurance The amount payable is clearly mentioned in the life insurance policy but in general it depends on the loss incurred. Let us now try to understand some of the terminology which are relevant. The first is the embedded value which is the discounted future values of the company. add up
- Next is the value of the new business – which tells us about the new businesses brought in by the company and if you add this to the EV, you can get a good perspective on the value of the company. Next is the expense ratio which is all their expenses. is the sum of, and if the discount is given back then a good idea of their profits
Next is persistence, which means the longer a customer stays with the company, the better they do for the company.
Next is the loss claim ratio, which measures the loss of net premium earned. The lower it is for the company because they can keep more money.
Let us now look at the timeline of the growth of insurance companies in India, in 2000, the insurance sector was opened up to private players with an FDI cap of 26%. 2010, IRDAI ULIPs rules came into play, in 2013, IRDAI guidelines for traditional products were established In 2014, the FDI cap was increased to 49% and most recently in 2021, the cap is at 74%
Let us now see the top 5 insurance companies in the sector
1. The first is HDFC Life
Which has a market cap of Rs 1.38 lakh crore and is the company that owns HDFC Pension Fund, the largest retail company with a stake of 34%. The EV in 2017 was 12471 crores and has witnessed a CAGR of 16.4% which is currently 26617 crores. The value of the business also witnessed a CAGR of 18.8% and the persistence ratio increased from 81% in 2017 to 90% in 2021.
2. Another company is SBI Life Insurance
Whose market cap is 1.1L Cr and its market share is 24%. The company gave 48.62% as 5 year return. The EV in 2017 was 16538 crores which gave a CAGR of 15.1% and is now at 33390 crores The business value is at a CAGR of 17.6% and the persistence ratio was 81.07% in 2017 and 87.92% in 2021 and the expense ratio is at 5.94% from 8.04%
3. The next one is ICICI Prudential with a market cap of 88000 crores.
The company has given 5 Year Return of 102%, EV in 2017 was 16184 Cr with a CAGR of 12.5% and now it is 29106 Cr. The value of the business witnessed a CAGR. 19.5% and they have reduced their expense ratio from 11.4% to 9.5%, persistence ratio from 85.7% to 87.1%
4. Next is ICICI Lombard General Insurance
Which has a market share of 12% and a market cap of 71000 crores, has given a 5-year return of 132%, its loss ratio has come down to 68.6% from 80.4% in FY21. The expense ratio increased from 23.5% to 31.2%, and the combination ratio fell from 103.9% to 99.8%.
5. General Insurance Corp of India is GIC
Their market cap is 34000 crores and they have given -54.24% 5 year return. Their loss ratio has increased from 81% to 92.4% in FY2011. The expense ratio increased from 18.7% to 19.63% and the combined ratio increased from 99.7% to 112.03%.
concept of insurance
difference between life and normal
Glossary for Life and General Insurance
Growth of Private Insurance Industry in India
Growth scope of insurance business in India
Top 5 Insurance Companies by Market Cap
Top 5 Insurance Stocks in India by Market Cap – Indian Insurance Sector Analysis
Top 5 Insurance Stocks in India by Market Cap – Indian Insurance Sector Analysis best insurance stocks to buy in india best insurance stocks to invest in india best insurance stocks to buy in india best insurance stocks to invest in india best listed insurance companies in india insurance stocks moneycontrol top insurance companies in india best healthcare stocks in india best insurance stocks to buy in india best insurance stocks to invest in india stock insurance company list listed insurance companies in india moneycontrol best general insurance stocks to buy in india best listed insurance companies in india insurance company share list insurance stocks moneycontrol