More consolidation may happen in insurance sector going ahead; SBI Life, ICICI Prudential Life among analysts top picks
- There are a total of 14 life insurance companies and 13 non-life insurance companies with a market share less than 1%, so acquisition is bound to happen.
- ICICI Prudential Life and SBI life are among top two gainers in the insurance segment.
- Reliance Life, Bharti Axa, and Edelweiss Tokio too are good acquisition candidates in the life insurance space, say analysts at ICICI Securities.
So, mergers and acquisitions will be a crucial part of the growth journey as there are many insurance companies with less than 1% market share.
There are a total 14 life insurance companies and 13 non-life insurance companies with a market share less than 1%, according to a report by ICICI Securities.
AdvertisementIn the listed space, SBI Life and ICICI Life have performed well with 36% and 43% returns in 2021, so far, respectively.
Analysts at CLSA reportedly say SBI Life leads listed life insurers with strong growth and hence is their top pick among life insurers.
|Listed insurance companies||% year-to-date returns|
|ICICI Prudential Life||43%|
|The New India Assurance||21%|
|ICICI Lombard General||5%|
“When we look into all the life insurers, beyond the leading ones in the private sector, Exide actually had the largest agency new business premium in FY21 at ₹4.3 billion followed by Reliance Life (₹3.6 billion), Bharti Axa (₹2.9 billion) and Edelweiss Tokio (₹2 billion). Hence, if agency premiums and agent number is taken into consideration, Reliance Life, Bharti Axa, and Edelweiss Tokio too are good acquisition candidates in the life insurance space,” said a report by ICICI Securities.
The broking firm has given a positive call on the shares of HDFC Life, SBI Life and ICICI Prudential Life. It has recommended a ‘buy’ rating to HDFC and SBI while an ‘add’ rating to ICICI Prudential.
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