How to play the insurance boom in India?
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Sector talk
Forum Discription: Discussion on sectors with regard to specific matters. We will be discussing the various sectors of the economy and how they would perform. Basically a top down approach.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=202
Printed Date: 28/Apr/2024 at 4:17pm
Topic: How to play the insurance boom in India?
Posted By: BubbleVision
Subject: How to play the insurance boom in India?
Date Posted: 19/Aug/2006 at 4:17pm
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I believe we would see a lot of Insurance IPO'S in 2008, as from what i know, they have to list by then. If i am wrong.. Plz correct me.. But when the licences were given to private insurance company's given, this was in the terms and conditions.. Some of them are listed in an indirect way Including. HDFC, ICICI, MAX, BAJAJ and i think Royal Sundaram ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Replies:
Posted By: basant
Date Posted: 19/Aug/2006 at 4:35pm
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Yes, Insurance could be huge but no way to play them directly except for Max india. Sundaram is more into general insurance which is not as remmeunerative as life. Also general insurance is a longer term play. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 19/Aug/2006 at 5:21pm
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Insurance is a great business. The master (Warren Buffet) made his money by converting an old textile company ( 1) Money comes first and payments are made later 2) No debtor problems 3) Free cash flows 4) No capex cycle 5) No replacement of fixed assets Insurance is all about probabilities and all Indian companies have made foreign collaborations. these foreign partners would help in bringing their skills to the table. The best way to play insurance is through the focused players like: Aditya Birla Nuvo – Birla Sunlife Sundaram Finance – Royal Sundaram Kotak Mahindra - Except for Max none of the players are focused but if insurance their grows the contribution to the company's bottom-line could be significant. The other players like HDFC and ICICI have a very small percentage of their income coming through insurance so any growth in this business will not adequately reflected in their EPS. A very surprising choice could be Pantaloon retail. Their JV with Italia Generali could become huge. Generali is ranked 21st in the list of 500 companies and generates close to 20% of its revenues from sale of policies at Malls. They have tested this concept in The best part with the Generali venture is that while Pantaloon paid Rs 100 crores for a 74% stake Generali paid the same amount for a 26% stake. In Fy 08 Pantaloon expects to have 300 million visitors at its malls. Even if the company is able to convert 0.5% of them it should sell around 1.5 million policies. At an average premium of Rs 15,000 this would work out to Rs 2250 crores of insurance premium. That would place it among the top five insurers in the country. The market cap of the company is Rs 4000 crores. There are a lot of ifs and buts in the above statements but errors should cancel out each other suppose the conversion rate is lower then maybe the annual premium will be higher and so on. Like all other companies these are additional kickers that set in once business rolls through and the company is also not dependent on this business .But this is a niche way of selling policies and should gather steam. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: reetesh
Date Posted: 07/Sep/2006 at 8:57pm
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Mr. Basant, what about Reiacne Capital , I think it Reliance Insurance is in it, please correct me if I am wrong? And braod sense because one day Anil will make this into a full financial services company your view on this..
Regards,
Reetesh. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: kulman
Date Posted: 07/Sep/2006 at 9:12pm
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You are right Reetesh jee. I have been holding Rel Cap since past 7 years, saw it dip below 50% of my cost but fortunately have not sold it. I have high hopes on this basically on account of following:
1. Non-life insurance
2. Retail stock broking (novel concept like pre-paid cards for broking), use of their WebWorlds as outlets etc.
3. New foray into Life insurance
4. Its investment portfolio
5. Mutual fund distribution biz
In the recent Tarapore Committee on CAC, it was suggested that large biz houses be given banking licence. It is rumoured that Rel Capital is eyeing for the same very aggresively.
It is likely that this company might be Berkshire-Hathway of India, what say Basantjee? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: basant
Date Posted: 07/Sep/2006 at 9:12pm
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Reliance capital is great value. I have not done an indepth calculation recently but the value of holdings should be Rs 200 per share. So we cannot value this company on PE. This stock surely has the power to
go a long way.
They are into Asset management in a big way. the best part about an AMC is as more money flows into the fund the AMC gets wealthier. they take their fees as a part of theoverall assets.Their brokerage business will give all the broketrs a run for their money (clients). Kotak has already responded by cutting down brokerage rates.
Reliance is into general Insurance which is a very long term story. people have to sink in money for years to break even.Life insurance is the place to be in.
In Insurance I would go with HDFC or ICICI or AB Nuvo but Reliance capital is a good stock to own but not the best if one wants to play insurance. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 07/Sep/2006 at 9:19pm
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About insurance, can we look at Exide in view of their ING Vyasa Insurance holding? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: reetesh
Date Posted: 07/Sep/2006 at 9:29pm
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What % of holding does HDFC and HDFC bank has in HDFC life and which one is better if we want to take a view on LIFE insurance. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: b_kothari2001
Date Posted: 07/Sep/2006 at 9:29pm
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I like Sundaram Finance (listed in NSE only), Market Cap is around 900 Cr, Price of 350/share
You will get:
One of the trusted financial services groups in South India
A company paying Dividend for last 50 years. Last Dividend of 135% including 50% one time Special Dividend.
A Company with Insurance Business.
A company with Asset Managment Company.
All type of Financing activity like Housing, Car, Business Finance, NPA less than 0.4%
Also having exposure in Infotech, BPO, Logistic.
Expecting EPS of more than 30 for this FY
Have a look in http://www.sundaramfinance.com/ - http://www.sundaramfinance.com/
What do u guys say? Basant Bhai kiya bolte? Cheers,
Bharat
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Posted By: basant
Date Posted: 07/Sep/2006 at 9:48pm
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Two words to describe before you buy "Absolute value"
Two words to describe after you buy "Keep patience"
Four words to describe after you sell "Great call. Stay wealthy"
Sundaram finance is a no brainer. Its association with BNP Paribas for its MF business should do very well. I am told that in the South people value the Sundaram group in equal terms with a bank. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 07/Sep/2006 at 9:59pm
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http://www.theequitydesk.com/forum/default.asp - HDFC - the mortgage company will finally hold 50% in HDFC Standard Life currently it currently owns close to three quarters. The bank does not own it.
Exide I guess owns 49% in ING so that is only portfolio investment since it cannot consolidate accounts with it. better to buy ING.Vyasa ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: catchsudipto
Date Posted: 22/Sep/2006 at 3:42pm
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Dear Sir, While i was trying to analyze the potential winners in the INSURANCE sector, i find that whose who will be able to catch the customer first will be the winner. So to catch the customer, they have to reach to the customer or catch the customer which are visiting to their shops( pantaloon) bank( kotak, hdfc,Ing visya,icici) . LIC have recruted a huze number of agents throughout India. These agents try to capture every possibe customer ( relatives, friends etc). Now LIC have the advantage of having the stamp of Govt. Now peoples of INDIA in the rural area believe the stamp of Govt like a semi God. So I feel it will be a difficult task for the private insurance company to make a huze dent in the rural area now. They can capture the market in urban area, where LIC dont have that agent power. Now the point is how they are going to attract the customers. That is the biggest challance. HDFC, Kotak, ING Visya, ICICI have the added advantage of having a pool of customers ( from their retail bank). Now what about AV Nuvo, Max life ? How they are going to catch the customers first and quickly. How will they increase their customer base faster than their competitor to be an potential multibagger. Pantaloon has an advantage of large foolfall in their retail ventures. Now according to u who could be the potential winner ? thanks ------------- Make your Life as simple as possible. |
Posted By: basant
Date Posted: 22/Sep/2006 at 3:57pm
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Excellent thought. http://www.theequitydesk.com/forum/forum_posts.asp?TID=305 - Aditya Birla Nuvo is more of everything rather then something specific as such. Today we have cross selling of products also for example South Indian Bank could sell Max New York policies etc. but I would agree with you 100% that owing a customer interaction platform would help.
ALlright Rural areas might do just LIC but the urban market is itdelf growing at 15% - 20% and we are in the very initia stages. Once the folks from rural areas see ICICI bank they would have no problem gettinga policy done from there.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prosperity
Date Posted: 22/Sep/2006 at 4:12pm
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Basantji,
Good that you mentioned ICICI and not HDFC among the private insurer players. Yes the omnipresent bank would win - and niche players like HDFC would prefer not to be omnipresent..
This brings up ICICI Vs. HDFC debate again - But is expanding to newer cities, increasing branches - Is that the reason why ICICI raised equity ?
If yes, i think their equity dilution is a long term positive...
Cheers,
------------- |
Posted By: basant
Date Posted: 22/Sep/2006 at 4:17pm
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The distribution reach of ICICI is mind boggling and HDFC is different from HDFC Bank but ICICI without equity dilution is phenomenal. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 22/Sep/2006 at 4:21pm
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Basantjee
ICICI-Pru as well as Lombard are hyper-active nowadays in marketing their products. Almost every alternate day, I get calls from their tele-marketeers.
P.S. : I'm however a loyal LIC client and New India for non-life.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: catchsudipto
Date Posted: 22/Sep/2006 at 4:33pm
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Dear Sir, Thanks for the complement and a very very quick reply. Sir LIC is very very strong in rural area. Their agents try to catch the customes by hook and crook ( by any means). If I tell u a small story u can understand that. My wife works in a Govt school in a village. That school have 35 teaches at present. There an LIC agent who had done lic policy for every teacher( except my wife). The most important part is the all the 34 teaches have done 2-3 policy on an average. In lie he gives free tax consultaion etc. Its unbeliable that some some teaches have LIC policy as their only long term saving. So i believe its huze huze market. Now to penetrate this market someone have to be more aggressive than LIC. I totally agree with u that Insurance is just in a nascent stage. Urban insurance is growing at 15% to 20% is a very very good sign. What i feel that its not clear to me that who could be the next potential winne in Insurance sector. I think i should rather wait more more lightor buy a basket of Hdfc, icici, SBi, AV nuvo. I also agree about your dark horse ( Pantaloon) as they are very very aggressive in whatever business is does. Who could be the winnee in your eyes Now. i request other forum members to sent their suggestions and comments etc. Thanks ------------- Make your Life as simple as possible. |
Posted By: BubbleVision
Date Posted: 22/Sep/2006 at 4:34pm
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Sudipto.. Insurance co's will have greater premium per policy from the Urban areas, making them more lucrative market. and hence the Private insurance companies are in the correct market currently. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: basant
Date Posted: 22/Sep/2006 at 4:54pm
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Bubblevision made a very piquant observation. Normally Insurance companies take very long to throw back profits. And as we discussed there is no pure insurance play (except Max) so it would be better to play it through the surrogate players like http://www.theequitydesk.com/forum/default.asp - HDFC ICICI http://www.theequitydesk.com/forum/forum_posts.asp?TID=135&PN=1 - Pantaloon Retail etc.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: surajmnair
Date Posted: 22/Sep/2006 at 5:58pm
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Considering the fact that only 2-3% India's GDP is insured, it turns out to be a money spinner.
I beleive Birla SunLife should soon turn break even and lets see how the market responds to Adity Birla Nuvo on that ocassion.
Value Unlocking thru insurance is a situation which we are all not accustomed to, so far.However considering all these ,Birla Nuvo seems to be a growth play.
But i believe the real challenge of an Insurance company comes only during the pay out period and pay out track record.In case of new entrants,We will have to really wait for that .
In that case, UTI still seems to be insurers favourite pal.
All said and done it is wise to take exposure on Adity Birla Nuvo...
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Posted By: nav_1996
Date Posted: 22/Sep/2006 at 6:03pm
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Watch out for Bajaj. Bajaj is a trusted brand even in rural India and they are getting aggressive in rural area. You can imagine they are present in almost all districts of one of the most rural state like Bihar.
http://www.bajajallianzlife.co.in/corporateweb/contactus/ourlocations.asp?state=Bihar |
Posted By: basant
Date Posted: 22/Sep/2006 at 6:14pm
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ANd if I not mistaken Bajaj Alliance is the largest of all the private insurers. But again the same problem Bajaj's hjas a low proportion of Insurance revenues to its total business but truely a commendable company and an absolute Buy! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 25/Oct/2006 at 2:09pm
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ICICI BANK says it shall list its insurance subsidiaries post 2010. Till then, the insurance business of ICICI Bank would have also grown. I was wondering Basant ji, if you could provide a detailed analysis of how the insurance sector would look post 2010. I meant, what kind of addressable market would there still be after 2010?
And post 2010, if insurance companies do list, what kind of growth can be seen in them post 2010? Right now, there DOES NOT seem to be a really niche and refined player in the insurance sector only, whose stock I can confidentally get into just to play to the insurance theme.
All others may also post their views, as that will help a lot surely.
Also basant ji, it would help if you could provide what kind of rate of growth has the top 5 US insurance companies(listed on the exchanges) shown in the past 5-10 years and what is the addressable market there as of now?
Since its a mature market there, it will help us understand where the stagnation could come in India too, when insurance levels reach very high levels.
Thank you. ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 25/Oct/2006 at 2:26pm
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Private Insurance will be a steady 20%-25% grower post 2008. See there is nothing new about insurance just that as people get wealthy and businesses expand they would need further/additional coverage.By 2010 ICICI would have creamed its insurance business and I do think that there would be nothing significant for investors to make a big multibagger out of it.Never read into the US insurers but we cannot match the absolute size. Their GDP is 20 times larger then ours. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: omshivaya
Date Posted: 25/Oct/2006 at 2:46pm
1) Post 2008 for how long?
2) Which private insurance company would you invest into, if it got listed? ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 25/Oct/2006 at 2:53pm
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At least for the next 5-7 years. All depends on the price at which they get listed. As they say everything is good only at a price. But ICICI, HDFC should be the front runners. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 17/Nov/2006 at 4:29pm
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Hi,
Insurance is growing very fast with strong growth projected in the future also Any views on how to value the insurance business of the companies? |
Posted By: basant
Date Posted: 17/Nov/2006 at 4:39pm
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Good point. I think that the DCF is the only way to value an insurance company but all calculations could go topsy turvy if a company has large claims that is why most insureres do not protect against deaths in case of war or natural disastors etc. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 17/Nov/2006 at 10:22pm
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I am not sure how we can do it by DCF. this is one business in which money comes first and liability later. Also there are different type of policies - term/ULIp/Endowment etc. With everything the risk and the premium are different. Also most of the insurance companies are more interested in selling ULIPs as they make much more money on those. One possible way of doing this would be segregating the premiums in two parts - risk premium(sum assured etc) and non-risk premium(mutual fund investments etc). then each will have to be valued separately. Non risk premium income can be taken to be equivalent to mutual funds with certain AUMs while the risk premium income can be taken as % of mortality probability. Obviously Insurance companies have an advantage of having very long term investors and much higher margins on non-risk premium business so that will create some valuation gap as compared to normal mutual funds. This concept is still hazy but seems like a way to start. |
Posted By: bub100
Date Posted: 17/Nov/2006 at 12:58pm
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any view on sundram finance good bet on Insurance and AMC for 2-3 year.
thanks ------------- gs |
Posted By: basant
Date Posted: 18/Nov/2006 at 8:16pm
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Sundaram finance is into General Indurance and that takes a few years to throw back cash. Apart from that it is solid value but when that value would get unlocked is the question? ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: bub100
Date Posted: 18/Nov/2006 at 10:40pm
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thanks for ur view.
in the last few months MF(Tempelton,frank) had bought and vol.is getting more than unusual. BPO and IT company are also under sundaram.In the next 2 year may be diluting stake (holding 74%) to royal as the insurance mkt opened up. - I hold some share for the last 1 year. ------------- gs |
Posted By: basant
Date Posted: 18/Nov/2006 at 1:22am
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when the holding gets sold off then prices should move. It is Ok to be pateient and think long term but then if we can estimate when that unlocking happens the returns gets magnified. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: PrashantS
Date Posted: 18/Nov/2006 at 2:15am
| Is it one of those that we can add in our portfolio Basanthji??? |
Posted By: nav_1996
Date Posted: 18/Nov/2006 at 7:22am
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I had mentioned sometime back how Bajaj Allianz has gone rural aggressively in last years. Here is an article from BS/Rediff.
-------------------------------------------------------- Vikas Gupta joined Bajaj Allianz close to a year ago. The 26-year-old was entrusted with setting up an office for the life insurance major in Itarsi, a small town in Madhya Pradesh. Gupta was in charge of finding a suitable location, negotiating the rent, buying the furniture and even hiring a couple of junior managers to work for him. He's now got four sales managers reporting to him, who in turn supervise a team of agents. It's not the way most insurance companies in India have grown, but small towns and local recruits are the major planks of Bajaj Allianz's distribution strategy. Having discovered that even the smallest towns can prove rich catchment areas, the insurance company is spreading out rapidly into the interiors. In just about five years, it has rolled out one of the biggest networks in the industry: at present, Bajaj Allianz has around 900 offices across the country, compared with around 330 for market leader ICICI Prudential. Before the year is out, it will have more than 1,000 offices covering 586 districts, up from the current 450. Bajaj Allianz will be the first private sector insurance player to have a presence in towns like Akola in Chhattisgarh and Uluberia in West Bengal. "We want to be a mass brand and that's why we're looking at a large footprint. Of course, a geographical spread helps derisk the model, which is particularly important for insurance. Today we earn our premia almost equally from each of the four regions," says Sanjay Jain, marketing head, Bajaj Allianz. Still, why so many offices? Jain explains that in the insurance business a physical presence is critical. "People need to know we're going to be around, because insurance is a long-term product where the money is paid out after 15 or 20 years." An office, however small, is a reassuring sign, he adds. Which is why the company has a presence even in towns where the population is less than 50,000, pleasantly surprised by the purchasing power even in states such as West Bengal and Orissa. The strategy seems to be paying off. For the first time, in FY05-06, Bajaj Allianz notched up a first year premium of Rs 2,715.62 crore (Rs 27.16 billion), overtaking market leader ICICI Prudential, which earned Rs 2,637.48 crore (Rs 26.37 billion) as premium during the same period. Observes Arvind Mahajan, executive director, KPMG, "Bajaj Allianz seems to have adapted Allianz's global philosophy - you're never too far from an Allianz shop - rather well. It has a more pronounced retail approach compared to others." The retail approach is combined with one of independence. Once Bajaj Allianz decides on a new location, it typically hires local youngsters to man the office, working on the belief that since insurance is all about trust, customers are likely to have more faith in locals. The new recruits are given a more or less free hand: they scout around for an office, furnish it, hire managers and agents. "We don't pay great salaries but we give our office heads a lot of freedom. They take almost all decisions including how they want to spend their ad budgets - whether they want to use hoardings or simply remunerate the agents. In that sense, it's a totally decentralised model," says Jain. Most offices are small - around 350-400 sq ft - and functional, with an eye on cost control. Speed is of essence, and new offices are up and running within a month of the decision to set it up. At a later stage, budgets and targets are set and agents found. "In some ways it's like an entrepreneurial effort: they [the local recruits] are the ones driving the business through the agents," Jain adds. Apart from setting up its own offices in smaller towns, Bajaj Allianz has also beefed up its distribution by teaming up with 10 co-operative banks, around 100 district co-operative banks, as well as some regional rural banks to drive business to it. The banks earn a referral fee, so it's an attractive revenue stream for them. Recently, the company also joined hands with Godrej Aadhar - the rural retail chain that has around 28 outlets across the country. "We have agreed to set up shops-in-shops at all Aadhar outlets and we are also talking to other such rural retail chains," says Jain, who adds that the response and interest levels at rural malls has been "a revelation". Importantly, at every location, whether bank counter or a rural outlet, the company ensures that it posts its own people, the idea being to inspire trust in customers. While it may use the bank staff for back-office functions, the selling of insurance policies is always done by a company employee. Not surprisingly, Bajaj Allianz already has 18,000 people on its rolls, and will soon be adding another 7,000. About six months ago, in a bid to strengthen its urban distribution, the company also forged an alliance with GE Money, which has around 200-odd outlets. However, agents remain the biggest selling channel and so the company ensures that commissions are competitive - the industry average is around 25-30 per cent. Bajaj today has 125,000 agents, way behind LIC's 1 million but ahead of ICICI Prudential's 100,000. However, in some of the towns, Bajaj has also used local financial advisors, since it believes the comfort level of the customer may be higher with them than with agents. In keeping with its regional focus, brand building efforts have also been localised; rather than advertise nationally, Bajaj Allianz relies more on vernacular dailies and slots on regional television channels. "We even have jingles in Bhojpuri," says Jain. And although Bajaj Allianz hasn't leveraged the Bajaj Auto distribution network, the company admits that the Bajaj tag does help enormously, lowering entry barriers in smaller towns. Meanwhile, Vikas Gupta, who had never been out of Madhya Pradesh, is just back from a trip to Egypt, a reward for his performance. Whether it's Bajaj or its people, everyone seems to be going places. |
Posted By: nav_1996
Date Posted: 18/Nov/2006 at 7:30am
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I read couple of days back that Kotak has valued ICICI's stake in ICICI Pru at about 19K crores. I would value Bajaj's stake in Bajaj Allianz similarily. Though Bajaj Allianz (about 4.5%)is slightly smaller that ICICI Pru(about 5.5%) but growing at slightly faster rate.
M Cap of Bajaj Auto is 25K crore. This means we are getting Auto business + other investments of Bajaj Auto for just 6K crore. It is really strange that I did not have courage to buy Bajaj Auto at 300 but at 2500 it still looks like a value+growth play. |
Posted By: basant
Date Posted: 18/Nov/2006 at 9:18am
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I would second that. Bajaj Auto seems to be some solid value with decent growth and a must hold for all diversified portfolios. Along with Allianz it has stake in ICICI.
I heard Rahul Bajaj say in an interview that he wants to split his business equally between the two brothers where one holds the 2 wheeler space and the other would do wioth the misc businesses. Now if the businesses would be split into two equal it means that both the parts should be equally valuable at least the insider thinks so. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Friend
Date Posted: 19/Nov/2006 at 1:33pm
| Basant, would really appreciate if u can break up Sundaram value . I mean presnt buiness , BPO plus insurance like u ahve done for Aditya nuvo. It will help all boarders as all of us know that Sundaram Fin. is slid buy but how much worth it should be , no idea. |
Posted By: Friend
Date Posted: 19/Nov/2006 at 1:35pm
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Dear Basant ,
We still await your analysis on HINDUJA as we feel current price of 500 throws good opportunity. Also do u ahve any idea on GODFREY PHILIPS |
Posted By: nav_1996
Date Posted: 19/Nov/2006 at 4:52pm
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We discussed Sundaram Finance earlier. Pls check http://www.theequitydesk.com/forum/forum_posts.asp?TID=431&KW=Sundaram
It was a value buy at 360 when we discussed it. I would slightly differ with view that it has been relatively underperformer in terms of returns. Returns need to viewed in conjunction with risks. |
Posted By: nikhil090
Date Posted: 23/Nov/2006 at 11:17pm
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Hi everybody, Over the weekend I was working to understand how to put some value to insurance business of the companies - Bajaj, ICICI et. Now there is one listed play in insurance - max india. Besides insurance it operates/building 7 hospitals around New Delhi. Couple of them are operational and others are being built. This business has still not generated money, but should be profitable business in the future. Now they hold 74% stake in Max Newyork Life insurance. they are growing pretty fast , though on a much smaller base. In the last 6 months Apr - sept, they did 535 cr in gross premium. Bajaj in the same period would have done close to 1700 cr in gross premium (878 cr in 3 months). The growth rates for Max Life insurance is relatively higher right now. this means that max newyork is about 1/3 the size of bajaj life insurance. now total business of max is valued at @ 900*3.6= 3300 cr which includes hospital/speciality chemicals and other businesses. assuming a conservative valuation of 800 cr for this business, the value of life insurance business is taken at 2500 cr. Now bajaj/icici being 3-4 times, should be valued at 7500 cr-10000 cr for life insurance. This value is coming significantly lower than the estimates of 15-16000 cr as done by valuers. Now is there something which we are missing? Either market is valuing max newyork life cheaply or icici/bajaj insurance higher? Or is there something else which we need to look at while valuing insurance business? |
Posted By: basant
Date Posted: 23/Nov/2006 at 9:24am
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Very relevant point. Generally that is the way to value companies where little is known. ICICI has a huge Bank branch network so when they see some one has Rs 100,000 in his current account they could send a person selling insurance. On the other hand when they see some one who is barely able to keep his min balance they would not waste their time. So this would give it a premium valuation.Also that Max valuation should be for 74% but this kind of avaluation differential is not justified unless we are missing something. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: go4lalit
Date Posted: 23/Nov/2006 at 11:42am
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My guess is that we are missing the General Insurance part. For ICICI it is ICICI Lombard & Bajaj it is Bajaj Allianz Genaral Insuance. For Bajaj, general insurance biz is already profitable.
If you goto buy bike/car, the insurance is mostly Bajaj Allianz or ICICI Lombard (at least in the big cities). Also the customer renews the policy every year, & thus every year they already have customers (like the mobile business).
Also for ICICI Lomabard, they sell at least one Home Insurance Policy to every their Home loan customer.
With ICICI/Bajaj beinh the private leaders in the business & also having greater reach than other private insurers. Bajaj Allainz has reach to even very rural districts.
So MAX India will always be valued at a discount to the leaders.
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Posted By: basant
Date Posted: 24/Nov/2006 at 12:06pm
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Yes, your argument seems to be bang on! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 24/Nov/2006 at 12:08pm
| I agree. General insurance has not been included in the above analysis on purpose. The reason was that Max India is not operating in General insurance business. Also because I did not included the General insurance business, the value of life insurance business was taken at 15-16K crore instead of 19K crore. I will hazard a guess that the general insurance business would be valued at roughly 3-4K crore because (i) The margins are much lesser as they dont have any ULIP kind of product and it is industrial selling (ii) the growth is much slower (iii) the overall opportunity itself if comparatively much less. Due to this I think there would be some other significant reason for the difference in valuation. |
Posted By: basant
Date Posted: 24/Nov/2006 at 12:27pm
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General Insurance is also a bleeding business and take years to break even also. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 24/Nov/2006 at 12:59pm
dear basant would yu then take a serious look at ICICI BANK as an
investment at the current price you get atop qulity retail bank, you do
get a top quality insurance co and you get some good quality assetslike
the bpo business etc maybe they are risk takers and agressive so what
does your brain say i will refrain from using the word gut feeling bcos
the gut cant think.in medical terminology the gut comprises of the
stomach to the rectum
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 24/Nov/2006 at 1:10pm
gut cant think.in medical terminology the gut comprises of the stomach to the rectum
_________________________________________________________
That is one new thing I learnt here. SUrely having a DOctor on board helps! We have discussed http://www.theequitydesk.com/forum/forum_posts.asp?TID=277 -
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Posted By: tigershark
Date Posted: 24/Nov/2006 at 1:30pm
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very true basant just skipped my mind, thks for the reminder so that
brings us to the fact that hdfc still remains numero uno and will
continue to do so
------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: nav_1996
Date Posted: 24/Nov/2006 at 2:22pm
| Look at Bajaj Allianz closely. Kind of brand equity Bajaj enjoys in semi-urban and rural India is unmatched (only Tata can match that but guess they are too busy chasing global dream). Insurance business and Trust go together. Bajaj Allianz was number 7th 3-4 years ago and today they are challenging ICICI for top position. I would bet on them and ICICI for their executing capabilities. Thus for a given size Max Newyork should be valued at half of Bajaj Allianz as immediate addressable opportunity for them is much smaller. Is insurance valuation itself correct is another matter? |
Posted By: nikhil090
Date Posted: 27/Nov/2006 at 4:52pm
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Hi everybody,
Any views on Max India. They are into 3 businesses.They have a hospital business which they are setting quite agressively in and around Delhi. They plan to have 1500 rooms by 2008, expect to breakeven by that time in this business. Currently they are having around 700+ rooms in and around Delhi which are running at average of 60% occupancy. Max India holds 70% in this business. The 2nd business as we know already is INsurance. They are into life insurance only holding 74%. They are growing pretty fast, in line with the industry. Max NY life agents are considered to be more informed. They receive more training than any other life insurance agents. consequently the productivity of these agents is better than others. 3rd business is the speciality business which is profitable, though small. Besides this, the company has good cash reserves in excess of $100 million. another important point is that Warburg Pincus holds more than 37% equity in this company. they are funding the hospital business also. The total marketcap is around $800 million. Seems to have good pedigree and doing good work in emerging sectors. what is your view? |
Posted By: basant
Date Posted: 27/Nov/2006 at 5:22pm
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Max seems a good bet - nothing on the EPS/PE front but it still has a strong underlying business that could become very valuable. I am not that bullish on the hospital business though. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nikhil090
Date Posted: 27/Nov/2006 at 6:22pm
| Any specific reason for not liking the hospital business. THis business has good potential - size of opportunity is big (medical tourism can become a reality).Also the reputation of the hospital improves with time. There would also be very little "Raw Material" requirement as such and possibility of bad debt would also be very low. Therefore this would be an annuity kind of business, after development. (say an NTPC of healthcare) |
Posted By: basant
Date Posted: 27/Nov/2006 at 9:05pm
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Hospital needs huge doses of capital to increase volume Apollo has done nothing over the past 15 years maybe the management is bad but volume expansion is extremely hard to generate unless capex is put up.
YOu may say that it is like a hotel business but there is no cyclicality so we cannot play iot like we do in case of hotels (right now hotels are in demand).
On the other hand hospitals are recession free and in case of a recession hospitals will do brisk business as people suffer from heart attacks!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: anurag
Date Posted: 10/Dec/2006 at 10:48am
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Try out Exide Industries to play the insurance boom........ It has 50% stake in ING VYSYA's Life Insurance Subsidiary and the value of its investment in IVLI subsidiary has increased from 290 crores to 800 crores in one year. Also, ING VYSYA is targetting a premium collection of 5000 crores by 2010 and currently it is expected to be at 700 crores by end of this year.
So, you get indirect stake in Life Insurance business and a stake in India's largest battery maker who has come up with decent results and is available at around 39 rupees.
Take your call.
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Posted By: basant
Date Posted: 10/Dec/2006 at 11:31am
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Yes, ING also holds a lot opf promise Reetesh has analysed this one in detail I presume. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nav_1996
Date Posted: 17/Dec/2006 at 10:23pm
| Adding just to avoid any confusion: ING Vysya bank does not seem to have any holding in ING Vysya Life Insurance. |
Posted By: reetesh
Date Posted: 17/Dec/2006 at 1:41am
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Nuwendu: There is no confusion in my mind that you are wrong. They hold 24% odd in ING Life, 50% is held by Exide and rest with ENAM and Guj. Ambuja Cem. Commonsense tells me that if they dont hold any stake in there life insurance then. 1. Why it is known as ING Life instead of Exide life.
2. Why would they be till now be known as promoter (they will not do charity).
Correct me if I am wrong.
The reason why they hold 24% because there is cap of 24% FDI in insurance. Once FDI is moved higher or removed they will increase there holding by issuing fresh capital which they have already indicated.
Note: I have put up what I know (Ref: Annual Report). If you are right then I am wrong, I will not debate further. Please dont think I am arrogant, this is because I dont want to creat any confusion in your mind. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: nav_1996
Date Posted: 17/Dec/2006 at 7:58am
| You may be right. My understanding was that parent ING holds the 24% and not ING Vysya bank. But then I may be wrong. |
Posted By: kulman
Date Posted: 27/Jan/2007 at 11:52am
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Insurance is a very big biz around which Buffet built his empire. But very important how it is managed & run. Read more on http://www.berkshirehathaway.com - http://www.berkshirehathaway.com in his letters.
----------------------------
Some great comments from WB:
Insurance is our biggest business and always will be. We like it. I think we have more float than any property and casualty insurer in
We don't want people focusing on growth. It's suicide [in the insurance business].
In the insurance business, people hand you money to put something on a piece of paper. What you put on that paper is very important, but the money can tempt you to do dumb things. If you're willing to do dumb things, people will find you. Even if you're in a rowboat in the ocean, the brokers will swim to you, with their fins showing. It's brutal. You'll see a lot of cash, won't see any losses for a little while, and then the roof will fall in. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 28/Jan/2007 at 12:04pm
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Excellent Article on Insurance Business Kulman. ------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: ramki830
Date Posted: 28/Jan/2007 at 3:01pm
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A related question. Will Selling Insurance along with mobile phone connections work?
Reliance (ADA) is trying it... selling Reliance Money's Insurance plans with RCom's Phone Connections...
Maybe Birla SunLife may do it with IDEA . Bharti I believe is set to market Bharti Axa that way...
Sounds interesting synergy....
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Posted By: kulman
Date Posted: 30/Jan/2007 at 12:09pm
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http://www.dnaindia.com/report.asp?NewsID=1077049 - Royal Sundaram bets on motor premiums, targets 35% growth
http://www.dnaindia.com/report.asp?NewsID=1077049 - Private sector general insurance firm eyes Rs 600 cr income this year
It is also expected to clock a 35% growth in income in 2007-08, despite an overall reduction in insurance premium rates from this month. The private general insurance major hopes to leverage on the advantage of having a lower share of property and engineering risks (where the recent rate cuts have been more severe) in its portfolio and higher motor premium volumes (which account for 51% of the total portfolio). “Right now, our efforts are focussed towards renewal premiums falling due in April this year. These are early days of a detariffed market and we expect prices to find their own levels in 12-24 months. While there is an average of 25% decline in insurance premiums, the current growth in infrastructure projects and real estate on the back of a robust GDP growth will drive insurance volumes,” Antony Jacob, managing director, RSA, said. “Health, personal accident and home insurance are also set to grow in the coming months,” he added. RSA hopes to ride on a 45% growth in the automobile business. The company, which generates almost 40% of its business from south India, also plans to increase its overall number of offices to 60 from 38 at present. It may also increase its equity capital from Rs 140 crore in the next fiscal.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: CHINKI
Date Posted: 09/Feb/2007 at 2:50pm
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Just to add one more information about Max India.
They have tied up with Amway ( more than a year back ) and selling Life Insurance Policies through their Distributors. As you know all, Amway is world's largest Network Marketing (ofcourse first in India also) Company expanding their business throughout the world in a big way. Selling Policies through their distributors is a catchy as Distributors would get some points ( 1 Point = Rs.45/-)for the premium collected. This should be good move by Max India to increase their market share as Amway Distributors are known to be very agreessive in marketing. ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: basant
Date Posted: 09/Feb/2007 at 3:04pm
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That is interesting because I always thought that selling insurance without a distribution network would be tough! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: jstk
Date Posted: 09/Feb/2007 at 5:47pm
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One can also look at Tube Investments alongwith the other stocks mentioned in this section as a Insurance play.
M/cap : 1236 cr
consolidated debt : 770 cr
holds 74% of Cholamandalam MS [ Mitsui sumitomo ] general insurance co
[ they grew by 35% in the year upto jan ]
Tube investments also has a good quoted investment portfolio valued at approx 700 cr [ comprises of 20 lakh shares of M&M, 1.17 cr shares of cholamandalam DBS Finance, 1 crore shares of self held thru a trust etc ] besides a decent unlisted portfloio.
jayendra ------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: deveshkayal
Date Posted: 16/Feb/2007 at 12:47pm
Insurance valuations set to double by 2010.
While the life insurance business is almost rocking in India — with a growth of around 150% year-on-year — the valuations of most insurers have silently grown by between 20% and 60%, and are poised to more than double by 2010. Further, the share of life insurance sector premiums is expected to rise from 2.6% of the GDP to 5.5% in the next three to four years. A recent study of Merrill Lynch ranked ICICI Prudential Life on top of the valuations’ list for private life insurers. It was valued at $3,744 million in financial year 2006-07 and is estimated to go up to $9,304 by 2010. Other companies that it valued were HDFC Standard Life at an estimated $1,150 million in FY07 (to grow to $2,724 million in FY10), Max New York Life at an estimated $712 million in FY07 (to grow to $1,638 million in FY10), Bajaj Allianz at an estimated $2,035 million in FY07 (to grow to an estimated $4,322 million in FY10) and SBI Life at an estimated $1,162 million (to grow to an estimated $2,854 million in FY10). While most of the valuations have increased by 20% at the lower end, it has been a hefty 60% for a few insurers owing to the higher growth and margins achieved by them. The research report has valued Indian life insurance companies on the basis of a multiple to their new business achieved profit (NBAP), which is basically the present value of the profits arising from new business written during the year. This method, Merrill Lynch feels, is appropriate as most of the value of Indian life insurance companies comes from their growth potential. In the absence of adequate disclosures of any actuarial data or embedded value by any life insurer in India, NBAP remains the only valuation tool that can be applied to Indian life insurance companies. According to Merrill Lynch, the growth prospects for ICICI Prudential will be largely driven by its focus on product innovation and aggressive marketing and cross selling. HDFC Standard Life, on the other hand, is slated to remain one of the larger insurers. Owing to the lower load structure on its unit linked policy, its NBAP margins are estimated to be at around 20%, lower than the sector average, the report said. It feels that the current growth rate for Bajaj Allianz is “unsustainable as almost 50% of its growth is being driven by single premium policies, especially Ulips”. On the other hand, given the higher proportion of single premium and unit linked policies, SBI Life’s margin is estimated to be at the lower end of the sector at 19% by FY10 ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: omshivaya
Date Posted: 16/Feb/2007 at 2:22pm
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Nice info. Devesh ji. Keep it up!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: basant
Date Posted: 16/Feb/2007 at 3:59pm
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yes, this informations helps us analysing spin off plays like Bajaj a bit more accurately. Thanks for that Devesh. By the way Pantaloon expects to be among the top three insurance players by 2010. Their JV with FOrtune 500 company Itallia Generralli is in full swing. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: PrashantS
Date Posted: 16/Feb/2007 at 7:00pm
| you know there was this good report on Insuarance in India if i find it again i will post it ..i thiknk it was Morgan stanley report on insuarance sector will copy paste soon..but this is nice to know the new development on Pantaloon.Has the JV with Starbucks taken place? |
Posted By: pramodjain
Date Posted: 14/Apr/2007 at 2:18pm
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Life insurers unfazed by high interest rates The hardening of interest rates in the economy does not portend sharp decline in life insurance industry's premium collection growth rates in the current fiscal, say captains of the private insurance companies. The popular view is that rising interest rates would not hurt industry growth although some slowing down may happen during the current fiscal. The life insurance industry recorded a 120.41 per cent growth in new premium collection for the period April-February 2007 to Rs 57,937 crore from Rs 26,286 crore in the same period in the previous year. "There will be some reallocation of savings pool. The share of insurance in the savings is unlikely to drop. We expect more flow into fixed deposits. At the same time, asset allocation in property, gold and mutual funds will come down and some will come into insurance. Net-net, there will be no hit on insurance," Ms Shikha Sharma, Managing Director, ICICI Prudential Life Insurance Company, said. She said that the life insurance industry was "crowded" and the current fiscal would see growth rate of 30-40 per cent. "The over 100 per cent growth seen last fiscal (up to February) is clearly unsustainable. You can't grow at the same rate on this higher base. Last financial year, a number of insurance companies expanded their distribution footprint. Moreover, a lot of people bought into ULIPs in the first quarter," Ms Sharma said. HDFC Standard Life Insurance's Managing Director, Mr Deepak Satwalekar, told Business Line that rising interest rates would not affect growth rate of life insurance industry in the current fiscal. 'It would affect the mutual funds industry more. I don't see it affecting insurance industry. One can expect close to last year growth (over 100 per cent). In fact, investment return of insurance companies will get affected positively (better returns),' he said. Mr Bert Paterson, Managing Director, Aviva Life, said that he saw rising interest rates having only marginal impact on the growth rate of life insurance industry. 'I don't think so. If so, it would only be marginal,' he said, when asked whether hardening interest rates would hurt life insurance industry's growth rate this fiscal. Bajaj Allianz's Chief Executive Officer (CEO), Mr Sam Ghosh, however felt that hardening interest rates would have some impact on the life insurance industry's growth this fiscal. 'The industry is likely to grow about 60 per cent this fiscal. We will grow at the industry rate,' he said. Taken from Business Line http://www.thehindubusinessline.com/ - |
Posted By: us121
Date Posted: 15/Apr/2007 at 6:57pm
Remember, Manish Dave's comment few days back on the one of the sector to benefit from interest rate rise is INSURANCE.
Going by WB's investment with GEICO, i feel this benefit of they getting their annual instalments on earlier insurances (not likely to be affected by rising rates) and the opportunity which arises to invest them with rise of interest is enormous. ------------- ABILITY will get u at d top. CHARACTER will retain u at d top |
Posted By: basant
Date Posted: 15/Apr/2007 at 7:23pm
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Yes, that was quite an insight. Money comes first which can be invested for higher returns but the point is it is good for insurance companies investing their own surplus in debt and bad for the ones who take an equity call. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 15/Apr/2007 at 11:11pm
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Buffet made huge money by efficient deployment of insurance funds. One must read his letters to shareholders carefully to understand this concept called "float'' in insurance business and how Berkshire has smartly multiplied that money.
However, one must remember that not all the insurance companies have smart managers.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: deveshkayal
Date Posted: 08/May/2007 at 11:19am
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Rel ADAG is adopting an extremely agrgressive growth strategy for all its business.This includes its insurance ventures.In a bid to grow the business of its life insurance co Reliance Life,the co has decided to withdraw group insurance business of Reliance Energy with LIC.The group has pulled out close to Rs 67crore and transferred to its insurance firm even though this meant paying a premature withdrawal penalty to LIC.
Source: ET ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 08/May/2007 at 11:40am
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I was told that they also get all ticketing for the group done through yatra.com!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: CHINKI
Date Posted: 10/May/2007 at 7:50am
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Bajaj Alliance have done 20,80,000 policies during the last year. This achievement done for the first time by a Private Insurer has given them 166% growth during the last year.
This is mainly due to innovations & flexibility in their products and reach (more no. of offices) claims their CEO ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: pirate
Date Posted: 10/May/2007 at 11:32am
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all said and done ..buy max india (insurance play) |
Posted By: CHINKI
Date Posted: 11/May/2007 at 10:31am
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Private Insurers benefit most from free pricing
Read this article in the following link: http://economictimes.indiatimes.com/News/News_By_Industry/Finance__Insurance/Insurance/Private_insurers_benefit_most_from_free_pricing/articleshow/2030105.cms Surprisingly they have not posted the following table in the net along with the article: INSURER Q4'05-06 Q4'06-07 TOTAL PREMIUM INCOME FOR 06-07 ROYAL SUNDARAM 132.77 162.21 600.03 TATA-AIG 175.18 171.91 741.56 REL. GENERAL 50.89 301.09 912.23 IFFCO- TOKIO 265.91 256.56 1150.32 ICICI - LOMBARD 369.66 676.91 3003.45 BAJAJ ALLIANZ 321.25 497.10 1804.60 HDFC CHUBB 62.90 48.23 190.16 CHOLAMANDALAM 45.79 85.00 314.59 NEW INDIA 1370.73 1310.11 5024.15 NATIONAL 913.80 1064.68 3810.88 UNITED INIDA 797.74 881.19 3509.95 ORIENTAL 902.45 970.20 3940.53 PRIVATE TOTAL 1424.36 2199.00 8716.94 PUBLIC TOTAL 3984.72 4226.17 16285.51 GRAND TOTAL 5409.08 6425.17 25002.45 This table should answer lot of queries asked in this forum. Some problems in arranging the last column heading. It should be read as "TOTAL PREMIUM INCOME FOR 06-07" ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: smartcat
Date Posted: 12/May/2007 at 4:25pm
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On a side note,
"Insurance is the subject matter of solicitation"
I know the above statement is in English - but I am having a difficulty in understanding what it means.
What does it mean? Why do all Indian companies put this in their ads? Is it an IRDA advertisement requirement?
|
Posted By: nav_1996
Date Posted: 15/May/2007 at 3:25pm
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Bajaj Auto[:o]
---------- I just read in ET that Allianz can raise its stake in Bajaj Allianz to 49% as and when government allows at a very "nominal rate". Now this is a big negative. It will knock off huge amount of insurance valuation from Bajaj Auto. This is definitely a big negative with auto business already under pressure. [URL=http://economictimes.indiatimes.com/Stake_hike_option_may_drive_BAL_demerger/articleshow/2042140.cms][/URL] |
Posted By: basant
Date Posted: 15/May/2007 at 3:34pm
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I was also suurprised to read that. Nominal is the word that hurts in that report!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: xbox
Date Posted: 15/May/2007 at 5:54am
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"Insurance is the subject matter of solicitation"
------------------
Insurance aagrah ki vishaya vastu hai!!!. It means one needs to ask for it.
In other context... Insurance is always sold never purchased. ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: Mohan
Date Posted: 15/May/2007 at 10:04am
Common perception is that companies are out to sell us policies. Its agents sell policies by making an application on our behalf to insurance companies. It means that its the we as individuals apply for Insurance coverage thru agents and coverage is subject to approval of certain conditions and not automatic. The Companies are not obligated to provide coverage for every application. ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: nav_1996
Date Posted: 17/May/2007 at 4:15pm
I think Bajaj Auto will get derated as a result of this. |
Posted By: kaushalchawla
Date Posted: 17/May/2007 at 10:01pm
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Bajaj auto and finance looks cyclical to me. and now I think a good amount of value that could have been created due to demerger (thru insurance) is gone now. ------------- Warm Regards, Kaushal |
Posted By: basant
Date Posted: 17/May/2007 at 10:48pm
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Quite a few mungeris are loaded on this one. They thought that like Reliance this would also create value- lesson Buy on demerger only if the brothers are fighting. That way they protect their own interests.
I heard Rahul Bajaj give out some examples of getting into a 1000 MW plant. That would be the worst thing to do because power generation is a low RoE busienss where investors can never above market rates of return. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 18/May/2007 at 8:03pm
So if the managements have issued such Call Options, an investor has no option but to call the broker for sell orders!
And on top of that if he is a leveraged player, then his close relatives have an option to Call the Ambulance
 ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: BubbleVision
Date Posted: 18/May/2007 at 8:39pm
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Kulman...I am surprised that the Allianz options did not have a KO (KnockOut option) clause. That is the general pattern between Foregin and Domestic companies when a regulation comes in middle.
BTW, this lack of KO has produced a KO-Effect on the shareholders and then their close relatives have no option otherthan to Call the Ambulance
You have composed it Brilliantly!!!
BasantJi...Please move these posts to the insurance thread!!!
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: kaushalchawla
Date Posted: 18/May/2007 at 9:46pm
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Basantji,
Why did u say "quite a few mungeri are loaded on this one". Since it was a demerger theme along with insurance sector, it should have been a pretty strong case of value creation, had this call / put option not been there.
Was there anything wrong in having this in your portfolio? ------------- Warm Regards, Kaushal |
Posted By: basant
Date Posted: 18/May/2007 at 10:48pm
People bought Bajaj Auto just because of the demerger without looking at the ratio and that was the problem.Demergers create wealth but only when we are sure of the ratios. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Ajith
Date Posted: 18/May/2007 at 12:11pm
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The call option to Allianz must have been there all along.How was this not factored in the market price? ------------- Ajith |
Posted By: basant
Date Posted: 18/May/2007 at 10:00am
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It is upto the management to disclose such instruments and they chose not to. This is tragic for anyone who says that Bajaj has the best corporate governence practcices. If what we are assuming is true then it is a shame on "Hamara Bajaj". ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BubbleVision
Date Posted: 18/May/2007 at 11:12am
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There are a few more areas of significant risk for companies which the investors or the "Shareholders at large" dont even know.
I know a couple of risks which some companies have and importantly TEDies have exposure in those stocks. I just hope that these things dont surface...
 Worse thing is that these risks are not even noted down in contingent liabilities.
------------- You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer! |
Posted By: Ajith
Date Posted: 19/May/2007 at 11:09pm
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I think therefore its important for investors to look at buys/sales by insiders/large instititutions though even they(not the insiders but institutions) may be caught on the wrong foot quite often. ------------- Ajith |
Posted By: basant
Date Posted: 19/May/2007 at 8:12am
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Investors have to bet on the best managment and that word "best" is vague. WHo thought that Bajaj was not the best mangaed companies. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: vip1
Date Posted: 20/May/2007 at 2:37pm
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Bajaj is a Lala company . In the 70's Narayanmurthy worked for one such Company run by another Lala Mr. Patni. He was quite Fed up with the Lala and decided to create a better Company.
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Posted By: pirate
Date Posted: 20/May/2007 at 9:21pm
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can you tell me about insurance co. icici,max india,hdfc they are listed directeliy in the market ordemerge after list. |
Posted By: smartcat
Date Posted: 20/May/2007 at 1:03am
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What very few people know is - Reliance Capital owns only 16% of its insurance arm Reliance Life and therefore, brokerages generally don't include Reliance Life's financials in consolidated results.
Thankfully however, the remaining 84% is held by an associate company of Rel Cap called 'Viscount Management'
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Posted By: basant
Date Posted: 20/May/2007 at 8:04am
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Is this not cheating the shareholders - Discount this management!!! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |