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Start Learning → Browse All Articles →Insurance stocks are read on a completely different vocabulary from banks or manufacturers — value of new business, persistency and embedded value matter more than revenue or profit alone.
Life insurance companies are valued and analysed using a vocabulary largely specific to the sector: value of new business, which measures the profitability of policies sold in a period; embedded value, a measure of the company’s existing book of business plus net worth; and persistency, which tracks how well customers continue paying premiums on existing policies over time. Traders coming from a banking or manufacturing background need to learn this vocabulary before quarterly results are genuinely legible.
SBI Life benefits from access to its parent bank’s extensive branch network as a distribution channel alongside its own agency and digital channels, and the productivity of this bancassurance relationship — how much new business is sourced through bank branches versus other channels — is a recurring theme in how analysts assess distribution strength and diversification.
Life insurers sell a mix of pure protection products (like term insurance) and savings-oriented products (like unit-linked and traditional endowment plans), and the mix between these categories affects both margins and the perceived quality of growth, with protection products typically viewed as higher-margin and savings products as more sensitive to market conditions and competing investment products.
Because a life insurance policy’s profitability is realised over many years of premium payments, persistency ratios — the percentage of policyholders who continue paying premiums in subsequent years — are a critical quality metric, and deteriorating persistency can signal future earnings pressure well before it shows up in near-term reported profit.
SBI Life trades an actively used single-stock F&O contract. Given its relatively high per-share price, lot sizes are periodically revised by NSE; confirm the current figure from the exchange’s live F&O contract file before sizing a position.