Life Insurance Companies: Invest or Not, If Yes Which is Best?

Life Insurance Companies: Invest or Not, If Yes Which is Best? Whole Sector Analysis is discussed at: http://www.profitfromit.co.in/wealth_creation_third.php We have discussed: Future Of Insurance Insurance World Wide Insurance India Best Companies to Invest Good Price and Long Term View Life Insurance: Life Insurance Industry is on high Growth since last 2 decades after the entry of private players. TOP 7 Private Players has 75% private market share ie strong Bancassurance platform will dominate the market. This is also the growing and emerging industry of India. Can have one company in the portfolio form either Insurance. Penetration in India is just 2.8% along with Density of 3840 Rs is too less v/s other countries. Protection Gap is 92%. Both China and India are Under-Insured countries. Growth opportunity is there as Life Expectancy would grow from current 68 to 75 during the next 2-3 decades along with Young population growth. Initially, Growth was from the Agency channel but now Bancassurance is playing a major role. Insurance Companies with widespread Banking are able to grow better as today around 55% of Business is sourced from Bank channels & Agency channel is now below 25% which was 100% pre-year 2000. Even E-commerce & Direct channels are on High growth. Activation is also maintained well through all channels. HDFC Life & SBI Life are leading companies in Insurance along with ICICIPru. All these 3 companies have average same Business & profits. Margin, Persistence of Policy life are also almost the same. Yes, there is a difference in growth SBI & HDFC are having better growth whereas ICICI PRU profit has not grown for last 5 years. Even in current Muted Economy Insurance is the growing sector. HDFCLIFE: cmp: 607: HDFC & SBI are best in Life Insurance Companies. HDFC Life is able to grow from 14000 cr sales and 500 cr Profit from 2013 to today around 39000 cr sales and 1300 cr Profit. It shows around 19% CAGR growth. Yes, they are able to grow and cash the boom of Insurance. We should expect around 15% CAGR growth in Revenue & profits in the coming years. Can Select HDFC LIFE as the good life Insurance company for long term Investment and expect consistent Growth. We may see this company cross 1 lakh cr sales till 2025. Even 9M revenue and Profits have grown by 20% & 8% Respectively, sales were in line with our expectations but profits are deemed. 55% consistency even after 61st Month. Buying could be done during any fall near 501 with the short term this year target of 680 and Can hold it for long term wealth. Strong 76% Promoter Holding with 52% HDFC along with 25% Standard Life. 11% holding by varied FPI while 7% Retail investors. SBILIFE: cmp: 999: SBIlife has grown as the best insurance company, yes despite PSU they are going good. SBI Life was established in 2001 as a joint venture between SBI & BNP Paribas. Have grown from 15000 cr revenue & 600 cr profits from 2013 to today around 44000 cr shows sales and 1300 cr profits. CAGR sales growth of 30% can be seen which is extraordinary. The majority of Insurance companies were able to have good growth. 9M revenue has grown attractive by 33% Profit has increased by a mere 3%. Yet high growth of 33% revenue where the new Business premium has increased by 40% can create good long term story. 58% consistency even after 61st Month. 57% of clients are from banking clients. 1st choice should be HDFC yet those who hold SBI Life can add again during any fall in the range of 853 to 627 and target this year should be 1305. SBI is the promoter of 57.5% stake while BNP holds 5.2%. 24% holding by FII and 6% MF companies holding. Disclosure: Do Not Buy or sell before consulting your advisor as the writer may have the position in the above-given stocks or indices http://profitfromit.co.in/wealth_creation_third.php