Relationship of SBI Life Insurance Ltd shares with Nifty 50
Author Name – Sakshi Deepak Lokhande ( MMS First Year, Roll no. 0222032)
Kohinoor Business School, Kurla.
Introduction
SBI Life Insurance Ltd is prominent life insurance company in india , established as joint venture between the State Bank of India (SBI) and BNP Paribas Cardif, a global insurance expert. With its roots in 2001,SBI Life brings togather the trust and widespread reach of State Bank of India with the expertise of BNP Paribas Cardif. The company offers a diverse range of insurance product and services , catering to the financial security needs of individual and families.SBI Life’s commitment to customer- centric solutions, innovating offerings, and a strong distribution network has positioned it as leading player in India’s insurance sector.
Objective
To calculate beta of SBI Life Insurance Ltd and observe its significance.
Views and Reviews
Mr. Dinesh Kumar Khara Chairman of SBI Life
1.Greater need to boost financial immunity
The Indian insurance industry has seen impressive growth in the past decade. This growth can be attributed to growing income, increasing awareness and a greater need for safeguarding oneself and one’s family post-pandemic. The Indian government has played a very crucial role in increasing the scope of the insurance sector through various policies and schemes, such as the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY,) providing life insurance coverage at an affordable price. During FY23, the Life Insurance industry recorded 18% growth in New Business Premiums. The life insurance premium is expected to grow at 9% annually in real terms by 2032, making India the fifth-largest life market globally. Today the awareness and demand for Life Insurance products amongst the customer along with digitalization are supporting the sector’s growth. Further, the regulatory development and vision set for the increasing penetration and sector development are laying the path for long-term and sustainable growth of the Insurance Industry. At SBI Life, we are aligned with the regulator’s vision and will continue to focus on various reforms enabling deeper penetration of the Life Insurer Industry.
2.Committed to environment and society
SBI Life is deeply committed to empowering the communities around its business operations. Your Company’s overarching goal is to create a sustainable and inclusive environment where everyone can thrive. We have taken a holistic approach to development, focusing on society and sustainability. To safeguard the environment and society in the process of development, your Company has integrated business operations with the ESG framework. Aligned with these objectives, your Company is providing insurance solutions to the unorganised sector and implementing diverse CSR initiatives. Your Company has spent ₹226.21 million across social impact initiatives in FY23. SBI Life has adapted to the “Business Responsibility and Sustainability Report (BRSR)” framework in accordance with the directives issued by the Securities and Exchange Board of India (SEBI) in this regard.
Data Collection
Data for ( 1/7/22 – 30/6/23) has been downloaded from the NSE India site and weekly closing prices are found out . The weekly return of nifty and weekly return of SBI Life Insurance Ltd were calculated (Nifty were taken as x and equity were taken as y ) Y was regressed on X.
Data Analysis
Equation Y= -0.14-0.36x+e
(SBI Life Insurance Ltd. = -0.14-0.36 Nifty 50 + E)
T Stat For B = -1.26
R2 = 0.032186937
F= 1.596354746
The Above Equation Show Relationship between Nifty 50 (X) and SBI Life Insurance Ltd(Y). SBI Life Insurance Ltd Runs On its Own Fundamentals The T Stat For B Is -1.26 Not Statistically Significant At the 5 % Level, and R2 is 0.03218 Which Means 3.2% Y Is Explained By X. 96.8% Is The Error In the Model. 1.59 Which Is Less Than The Table Value Which Means Overall Them Model Is Not Statistically Significant At a 5% Level.
Conclusion
The Beta Of The SBI Life Insurance Ltd. Is < 1 So The Company Is Good For Long-Term Investment.