Being an Insurance and Banking analyst, In my views insurance is a cyclical and commoditized business , people look for cheapest insurance policy and many a times they don’t even know the name of their insurer. Most of the insurance companies would be having combined ratio more than 100 and the profits come to them through investment income. In case of commodities like steel and iron during the upcycle it takes time for fresh supply to come in so the price would be high for at least few years, while in insurance the supply can be added immediately by an insurer ready to offer lower price. Overall in my views insurance is a tough business and heard some bad news about Star Health in Gujrat where hospital denied accepting Star policies. I would stick to insurance broker rather than directly buying a manufacturer.
Disclosure: views can be biased and may be proven wrong
x- @amitsinghpal
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