India’s insurance sector, valued at $131 billion in 2023, is experiencing rapid growth driven by rising awareness and income levels. The sector, comprising 58 insurers (24 life and 34 non-life), is expected to achieve a CAGR of 12-15% through 2025, reflecting increased penetration and demand.
Health insurance premiums have likely been increased by approximately 15-18 percent. The increase in insurance premiums is due to various factors, especially inflation in the healthcare sector, As per Motilal Oswal Financial Services Limited, medical inflation in India has continued to rise. The report noted that room rents have increased 3-4 percent over the past year. As per CNBC reports.
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In addition, claim frequency is important in this context. The claim frequency rate is the expected percentage of insureds who will make claims and the number of claims they will make over a certain period. This aids in estimating the expected average cost of claims, which are then used to determine premium rates.
Claim frequency rate in insurance refers to the expected percentage of policyholders who will make claims and how often they will do so within a specific timeframe.
For instance, if an insurance company insures 1,000 cars and expects 5% of them to file claims each year, with each claim averaging $2,000, they estimate an average of 50 claims annually. This data helps insurers determine premium rates by factoring in the anticipated cost of claims per policyholder.
Here the stocks in focus after companies are likely to hike premiums.
Go Digit General Insurance Ltd
Go Digit General Insurance Limited is a digital full-stack insurance provider. The firm uses technology to offer several non-life insurance products, including auto, health, travel, property, marine, and liability.
With a market capitalization of Rs 33,386.17 crore, the shares were trading at Rs 363.85 per share, increasing around 5 percent as compared to the previous closing price.
Life Insurance Corporation of India
Life Insurance Corporation of India is an India-based insurance company. The Company is engaged in the business of life insurance in and outside India. It offers a range of individual and group insurance solutions including participating, non-participating, and unit-linked lines of businesses.
With a market capitalization of Rs 6.62 lakh crore, the shares were trading at Rs 1,048.45 per share, increasing around 1.63 percent as compared to the previous closing price.
HDFC Life Insurance Company Ltd
HDFC Life Insurance Company Ltd is an India-based life insurance company. The Company provides a range of individual and group insurance solutions across India. The portfolio comprises various insurance and investment products such as protection, pension, savings, investment, annuity, and health.
With a market capitalization of Rs 1.36 lakh crore, the shares were trading at Rs 633.70 per share, increasing around 2 percent as compared to the previous closing price.
Star Health and Allied Insurance Company Ltd
Star Health and Allied Insurance Company Ltd is an India-based health insurance service. The Company provides services in health, personal accident, and overseas travel insurance. Its product categories include health insurance, accident insurance, and travel insurance.
With a market capitalization of Rs 33,732.13 crore, the shares were trading at Rs 576.15 per share, increasing around 1 percent as compared to the previous closing price.
Sbi Life Insurance Company Ltd
SBI Life Insurance Company Limited is an India-based company, which offers life insurance. The Company operates through three segments: Participating, Non-Participating, and Linked segments. Its Participating segment includes Individual Life, Individual Pension, Group Pension, and Variable Insurance.
With a market capitalization of Rs 1.56 lakh crore, the shares were trading at Rs 1,559.70 per share, increasing around 2.27 percent as compared to the previous closing price.
Written by:- Abhishek Singh
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