GROWTH COVER
Business Today India|December 22, 2024
Public sector insurers have seen remarkable growth this year. But new-age insurance firms are adding vigour to the sector, setting the stage for an exciting future
TEENA JAIN KAUSHAL
GROWTH COVER

IT HAS BEEN an eventful year for India’s insurance sector. From public sector giants to new entrants, they have all experienced growth—some remarkable, others stable. Consider this: the Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), and the New India Assurance Company have all seen substantial increases in one-year average market capitalisation, gaining from the broader investor confidence in public sector undertakings (PSUs).

LIC, the largest insurance player in India by a distance, increased its average market cap by nearly 48%, jumping from ₹3.94 lakh crore to ₹5.83 lakh crore between October 2023 and September 2024. GIC and New India Assurance did even better in the period, witnessing more than 100% surge in market cap during the same period, reaching ₹60,000 crore and ₹37,679 crore, respectively.

This uptick has been part of a larger rally in PSU stocks, with the BSE PSU index soaring 69% in the year to September 30, 2024, surpassing gains in the broader BSE Sensex and BSE 500 indices, which rose by 29% and 40%, respectively, in that period.

In contrast, private insurers saw slower growth. ICICI Lombard saw its market cap increase 39% from ₹59,239 crore to ₹82,540 crore, and SBI Life rose by 23%, reaching ₹1.51 lakh crore. Other major players such as ICICI Prudential Life, Max Financial Services, and HDFC Life also saw increases in their market caps of 22%, 34%, and 10%, respectively. However, Star Health was the outlier in an otherwise good year for the sector, recording a 5% decline in market cap, which fell to ₹33,052 crore between October 2023 and September 2024.

“India’s insurance sector is poised for significant growth in the coming years, driven by economic expansion, rising middle-class incomes, and favourable regulatory reforms,” says Himanshu Kohli, Co-founder of wealth management firm Client Associates.

SAFE & SOUND

This story is from the December 22, 2024 edition of Business Today India.

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This story is from the December 22, 2024 edition of Business Today India.

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