Why Are Insurance Stocks Gaining Momentum In November?

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Why Are Insurance Stocks Gaining Momentum In November?

By Aditya Raghunath

Investing.com -- If there’s one thing the COVID-19 pandemic has done, it is to raise the awareness and need for insurance today. A BloombergQuint report said that the premium collection of private life insurance companies has returned to pre-pandemic levels.

Insurance companies on the stock market are booming and have gained between 10%-20% on the indices in November. HDFC (NS: HDFC ) Life Insurance Company Ltd (NS: HDFL ) stock was trading at Rs. 589 on October 30 and is at Rs. 663 right now, an increase of over 12%. SBI (NS: SBI ) Life Insurance Company Ltd (NS: SBIL ) is trading at Rs. 855, up 11% from Rs. 769 on October 30 and ICICI Lombard General Insurance Company Ltd (NS: ICIL ) is up over 17% trading at Rs. 1,455 compared to Rs. 1,236 on October 30. Yesterday, even as both major Indian indices dropped over 1.5%, all three stocks held on or made marginal gains in their stock prices.

In the first two quarters of the financial year 2020-21, health insurance crossed auto insurance (motor) to become the second most valuable segment after life insurance. This is the first time that health insurance has moved to second place in 20 years. This is also because sales of cars have reduced during the pandemic. However, it is a very encouraging sign for insurance companies over the long-term.

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