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Best Insurance Stocks in India 2023

24 Aug 2023


Shares belonging to insurance companies have traditionally been among the best-performing ones on the exchanges. Investing in such shares provides stability to your portfolio and brings long-term growth potential. In this article, you will find a list of the best insurance stocks in India you can add to your portfolio in 2023.

An overview of the Indian insurance sector

Before moving on to the list of the best insurance stocks in India in 2023, you must get an overview of the Indian insurance sector. As in other developing nations, the insurance industry has contributed immensely to India's economic growth. As a result of increasing awareness among the public and favourable government policies, Indian insurance companies have evolved significantly over the last decade.

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In 2017, several private insurance companies launched their Initial Public Offerings (IPOs), one after the other. Since then, this sector has been a niche category for domestic and global investors looking to invest in the Indian equity markets. From 2017 to 2020, most insurance stocks in India outperformed market benchmarks.

However, as the Covid-19 pandemic gripped the nation, insurance companies started facing heat. As a result, the stocks in this sector failed to perform as expected for three consecutive years. But as you approach the end of 2023, the insurance stocks are again set to bring huge upsides in the upcoming months.

As per Trendlyne data, most insurance stocks in India can potentially provide 10% to 40% returns in the long term. Additionally, these stocks can fetch regular dividends, taking your potential returns to unbelievable heights.

Best insurance stocks in India in 2023

Without wasting any more time, let’s get to the best insurance stocks in India to invest in 2023:

1. Life Insurance Corporation of India (LIC)

The Life Insurance Corporation of India (LIC) is the largest insurance company in India in terms of market capitalization. The company's initial public offering (IPO) was launched in May 2022, generating considerable investor excitement. Subsequently, there has been a substantial Return on Assets (ROA) enhancement, coupled with rising profit margins. Additionally, the company maintains minimal debt levels.

You can buy LIC stocks at around Rs. 600 and expect an upside of up to 40% in the long term. The revised target for this stock is around Rs. 800 to Rs. 850.

2. SBI Life Insurance Company

SBI Life Insurance is India's second-largest life insurance company after the LIC. The company operates in the Indian market as a joint venture between the BNP Paribas Cardif and the State Bank of India. It offers a range of products for its customers, including term plans, retirement plans, and Unit-Linked Insurance Plans (ULIPs).

You can buy SBI Life Insurance stocks at around Rs. 1200 with an estimated target of around Rs. 1550, a potential upside of around 25%.

3. HDFC Life Insurance Company

HDFC Life Insurance Company is one of the largest life insurers in India after the LIC and the SBI Life Insurance Company. It is a partnership venture between HDFC Bank and Standard Life Aberdeen PLC. The company’s product portfolio includes group and individual insurance plans for protection, retirement, savings, and health.

Buying HDFC Life Insurance shares at around Rs. 550 can fetch you a potential upside of around 14% with an estimated target of Rs. 640.

4. ICICI Prudential

ICICI Prudential is India's second-largest private insurance player after the HDFC Life Insurance Company. It is a partnership business between the ICICI Bank – India’s largest private-sector bank – and Prudential Corporation Holdings Limited – a renowned multinational financial services company.

You can buy ICIC Prudential stocks at an approximate CMP of Rs. 438 and expect an upside surge of around 30%. The estimated target for this insurance stock is Rs. 570.

5. Star Health and Allied Insurance Company

Although not as big as the other companies on this list, Star Health and Allied Insurance Company shares still make it to the list of our best insurance stocks in India in 2023. The company has emerged strongly as one of India's leading health insurance providers. With low debts and constantly increasing revenues for the last four quarters, the company can prove to be a dark horse.

You can buy Star Health shares at a CMP of around Rs. 580 and expect an upsurge of about 20%. The estimated target for this stock is Rs. 690.

To conclude

The demand for insurance stocks in India is expected to rise shortly, leading to a potential price increase. So, move as soon as possible and allow your wealth to grow considerably. But before investing your hard-earned money, analyse a company’s business model, past performance, and prevailing market trends.

If you need a Demat account to start your stock investment journey, you can open it for free with Motilal Oswal.


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