The Profitability Secrets Of Hdfc Lic And Sbi Lic - A Case Study

Abstract

The government's measures to promote life insurance and the increase in disposable income and knowledge of financial security have propelled the insurance business in India to unprecedented growth. For investors, legislators, and other stakeholders, it is essential to comprehend the factors that drive the profitability of dominant businesses. The profitability strategies of SBI Life Insurance Company (SBI LIC) and HDFC Life Insurance Company (HDFC LIC) for the years 2019–2023 are examined in this study. In order to assess profitability patterns and pinpoint underlying causes, the research makes use of Return on Equity (ROE) and Return on Capital Employed (ROCE) measures. Both businesses' ROE and ROCE fluctuate, according to the data, with HDFC LIC seeing a more dramatic drop. In general, SBI LIC's ROCE remained higher, indicating possibly better capital management. This study opens the door for more investigation into the variables impacting profitability in this developing market by shedding light on the profitability dynamics within the Indian insurance sector.