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
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