Which are the top insurance companies in India right now?
As per Equitymaster's Stock Screener, here is a list of the top insurance companies in India right now...
- #1 LIFE INSURANCE CORPORATION
- #2 SBI LIFE INSURANCE
- #3 HDFC LIFE INSURANCE
- #4 ICICI PRUDENTIAL LIFE INSURANCE
- #5 ICICI LOMBARD GENERAL INSURANCE
These companies have been ranked as per their market capitalization. The higher the market cap, the higher the total value of the company.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
When should you invest in the insurance sector?
The best time to invest in the insurance sector is when Price to Book Value (P/BV) valuations of insurance companies are attractive.
The ideal metrics for valuing insurance companies are the Price to Embedded Value Ratio (P/EmV) and the Price to Book Value (P/BV) ratio. The lower the ratio, the more undervalued the stock is.
Where can I find a list of insurance stocks?
The details of listed insurance companies can be found on the NSE and BSE website. For a curated list you can check out our list of insurance stocks.
What kind of dividend yields do insurance stocks offer?
Unlike, conventional sectors, the insurance sector does not have a consistent trend of dividend yields. Different companies have different dividend policies which vary depending on the owners discretion.
For more details, check out our list of top insurance stocks offering high dividend yields.
What are the metrics used to evaluate insurance companies?
Insurance companies have some very distinct metrics of evaluation. These include solvency ratio and embedded value (EmV).
The solvency ratio is the ratio of a company's net assets to the risks it has taken, usually net written premiums. The EmV is the sum of adjusted net worth and the present value of the future profits.
The ratio of the company's market cap and the embedded value i.e the Price to Embedded Value Ratio (P/EmV) can be used to compare the valuation of life insurance companies.
One can also use Price to Book Value Ratio (P/BV) which compares a firm's market capitalization to its book value. The lower the ratio, the more undervalued the stock is and vice versa.
To find stocks with favourable P/BV Ratios, check out our list of insurance stocks according to their P/BV Ratios.