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Best Insurance Stocks in India To Buy In 2024

Best Insurance Stocks in India To Buy In 2024

Best Insurance Stocks in India To Buy In 2024

When we think of insurance, the first thing which comes to our mind is LIC. Although LIC is a big player in the insurance industry, the industry is much more than that and there are many public and private players who are thriving in this industry. 


As they say, life is uncertain and there is a constant fear of losing it all in an instant, which is why insurance is considered to be one of the basic necessities of life. India is one of the biggest industries in the world when it comes to insurance. 


We Indians still have a conservative approach towards life which is why insurance is one of things which we buy when we become in order to keep our families and our personal belongings safe which is an indication that the Indian insurance market will continue to thrive in the future too. 

 

 

State of the Indian Insurance Sector

The size Indian Insurance Industry was estimated to be a whopping $280 bn in 2020. According to report by Swiss Re Institute, total insurance premiums in India will grow by 7.1% during 2024-2028, which is well above than the global average of 2.4%. If this trend continues then the Indian insurance sector will be the fastest growing insurance sector among the G20 countries.


The Indian insurance industry comprises of both public and private entities catering to diverse needs with insurance products like life insurance, health insurance, motor insurance and other types of insurances.


The insurance industry is broadly divided into:

  • Life Insurance companies
  • General Insurance companies


Uncertainty is a truth of life, and its nature makes the insurance sector an evergreen sector and provides an avenue for investors to book profits by investing in it. However, we must look into certain factors before considering investing in the insurance sector which are discussed in the subsequent section of the blog.

 

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Factors to consider before investing in Insurance stocks


•    Market Standing and Competitor Analysis

Before picking up an insurance stock it is crucial that you find out company important ratio before investing such as its market position or market share in the industry. Also perform a competitor analysis in terms of the product offerings, distribution network and growth prospects of the company.


•    Corporate Governance and Management Analysis

Another important metric to ascertain a company is to find out how well it performs its corporate governance duties and the quality of its management. Look for things like honesty, clear communication, and making decisions that benefit both the company and its investors.


•    Financial Standing

Before picking up an insurance stock, do a thorough check of a company's financial health. It is related to how much money they make, their profits, and their ability to return money to shareholders. Also check if they are bringing in more customers, cost control, and making money from their investments.


•    Technical Modernization

Technological advancement is the norm of today's day and age and therefore companies must keep pace with the technological advancements in their field. While assessing a stock always look out how the company uses technology. Are they investing in things like digital tools, data analysis, and working with new tech companies in insurance or not.

 

 

Top Indian Insurance to invest in 2024


1) Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) which came into being in 1956, boasts a rich legacy as a leading player in the Indian insurance industry. Being a reputed public insurance company, LIC has played a key role in providing widespread access to life insurance for decades. 


LIC was driven by the mission to democratize life insurance coverage across the length and breadth of India. LIC offers a diverse range of insurance products to fulfill insurance needs of both urban and rural communities and provide them financial safety. 


Some of LIC's widely recognized insurance plans include Saral Jeevan Bima, Bima Jyoti, Arogya Rakshak, and Dhan Rekha, but these represent just a portion of their comprehensive product portfolio.

 

2) ICICI Lombard General Insurance Company Limited

ICICI Lombard stands is one of the leading players in India's private general insurance market. It is known for being innovative with their insurance products and has the policy of customer first. They tend to focus big on technology and have been using them to improve both customer satisfaction and the efficiency of their business. 


If we talk financially then ICICI Lombard is well equipped to capitalize on the growing demand for general insurance in India. Their market value is around ₹70,000 crore, and their price-to-earnings ratio is 35.4.

 

3) HDFC Life Insurance Company Limited

Established in 2000, HDFC is one of the biggest names in India's life insurance market. They have earned the reputation for offering diverse insurance products, from basic protection plans to interesting investment options, pensions, and even health insurance.

 

Headquartered in Mumbai, they have got all the major life insurance categories covered from term life, unit-linked plans, traditional policies like endowments to full life, and retirement planning. 


The approach taken by HDFC is innovative in the insurance sector and they have strong brand recognition with an extensive network of agents. The market value of HDFC is over ₹1,34,000 crore and their price-to-earnings ratio is 73.2 and with such strong financials HDFC Life is a clear leader in the Indian life insurance industry.

 

 

4) SBI Life Insurance Company Limited

SBI Life Insurance was formed in 2001 and since then it has become an important player in the Indian life insurance market. It has a wide range of products at its disposal for its customers, including protection plans, pension plans, savings options, and health insurance solutions. 

 

SBI Life boasts an extensive network of agents reaching out to diverse customers all across the country. It also has 1,000 offices all over the country and a vast network of agents exceeding 240,000, and strong bancassurance partnerships, SBI Life has leveraged SBI's established branch network to build a significant market presence. In financial terms also the company looks to be on the right path with a market value of around ₹1,10,000 crore and a P/E ratio of 64.7.

 

 

5) ICICI Prudential Life Insurance Company Limited

ICICI Prudential Life Insurance a now leading name in the Indian insurance sector was formed in 2001 by a joint venture between ICICI Bank and Prudential Corporation. The partnership aims to offer a variety of insurance products to its customers across India, including term life, health insurance, unit-linked plans (ULIPs), child plans, and retirement plans. 


The aim of ICICI Prudential is to prioritize technological advancements in the industry to enhance both customer service and their internal operations and efficiency. The market value of ICICI Prudential stands at ₹78,500 crore and P/E ratio of 52.9 indicate a strong position for future growth in the Indian market.

 

6) Max Financial Services Limited

Max Financial Services Limited which is a part of the Max Group and a prominent Indian conglomerate came into being in 1988. Its core competency lies in managing investments and guiding the other Max Group companies. It is the primary owner of Max Life Insurance which is its holding company and a major player in India's life insurance market. 


Max Life itself offers a variety of insurance products such as traditional insurance plans, investment-linked options, pure protection plans, retirement plans, and more. As of FY22, Max Life market share has been 9.9% among private life insurers in India. Max Financial Services also holds controlling stake (81.83%) in Max Life, making it the largest non-bank life insurer and the fourth-largest private life insurance company in India.

 

7) General Insurance Corporation of India

After India's independence, the Indian government gained control over numerous insurance companies and to manage them in 1972, they formed the General Insurance Corporation of India (GIC Re). GIC Re then merged the acquired entities into four main insurance companies: National Insurance, New India Assurance, Oriental Insurance, and United India Insurance.

 

GIC Re performs the role of a reinsurer and provides backup financial support to other insurance companies in India (both life and general insurance) across various areas like fire, marine, auto, engineering, agriculture, aviation, health, and more. Their put their emphasis on key areas including property, agriculture, liability, motor, and health insurance.

 

 

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