Wednesday, May 5, 2010


Below is a chart of the financial performance of Insurance companies in India.

Public sector behemoths like L.I.C. & New India Assurance have continued to maintain their stranglehold over the Indian Insurance sector.

ICICI Prudential, HDFC Standard Life & Bajaj Allianz have continued to gain market share, but have yet to make profits.

Equity market analysts are always trying to value the above above three insurance companies - to calculate the sum of parts valuation of their listed parent companies.

At this stage it's worth pointing out, that it may take a while for these guys to be profitable.
Cut throat competition and well established incumbents are delaying their break even dates.

Warren Buffett is rumored to be interested in the Indian Insurance sector.
In the long run, this sunrise industry is set for many decades of exponential growth, given the low penetration of insurance products in the Indian economy.

In the near term, we may be headed for a shake out or consolidation, as weak hands throw in the towel or sell out to larger players.

Watch this space.

No comments: