K. ARAVIND
Insurance is currently the sector that can be considered as the ‘Sunrise Sector’. Areas where the new dawn of business growth is exploding are what we call the ‘Sunrise Sector’.
The insurance premium business was 2.71 per cent of GDP in 2000-01 and increased to 3.69 per cent in 2019-20. With this, insurance companies went through the initial phase of spending more than the revenue and became profitable. Earlier, Life Insurance Corporation was the only for-profit life insurance company to handle a large share of the life insurance sector in the country. Today that situation has changed. Private life insurance companies that have entered the profitability phase are expected to continue to grow well.
One hundred per cent foreign investment is allowed for insurance and intermediaries. SBI Life, a leading insurer, will be the main beneficiary of the growth in the sector. The life insurance industry is expected to grow by 12-15 per cent in the next three to five years.
During the July-September quarter of the current financial year, SBI Life posted a net profit of Rs.300 crore. This is a growth of 120 per cent compared to the same period last year. Net premium income rose 22 per cent to Rs.12,858 crore.
It was listed on the SBI Life Stock Exchange in September 2017. Although the stock is trading at a high value as it has good growth potential, it is a stock that has the potential to grow investor wealth in the coming years as a sunrise sector. SBI Life Insurance is a stock that can be considered by investors who opt for stocks with a long-term goal.
