InvestorQ : Can you tell me why the insurance stocks like GIC and Oriental rally so sharply on 18 February after almost lying dormant for so many years?


If the company can increase its business at a faster pace, then its valuations should continue to increase. Full access to our intuitive epaper – clip, save, share articles from any device; newspaper archives from 2006. Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app. The modus operandi observed is that once a client pays amount to them, huge profits are shown in his account online inducing more investment. However, they stop responding when client demands return of amount invested and profit earned.

  • Meanwhile, the company is shifting its focus towards scaling up its traditional partners and agents which could help cushion this decline.
  • He’s been creating Content for a long time, but it was his fascination and zeal for the stock market that steered him in the right direction.
  • According to the brokerage, the retail APE growth in February was largely driven by size growth, with overall average ticket size for Retail Regular Premium policies growing by 32% YoY.
  • The rationale behind giving such a recommendation is the adequate solvency ratios, robust claim settlements, and vast agency channel being the company’s moat.

Some of the risks general insurance players could face is from the lower-ticket size of two-wheeler insurance since it results in greater lapse rate post the sale of new 2Ws, which already have a mandatory insurance component. Distributors should concentrate on the higher-ticket size insurance segments. Life insurers are now allowed to sell health plans, this will also add to competition among the players.

Life insurance stocks fall up to 10% after Budget pushes for new tax regime

Profit and Loss statement of an insurance company is extremely different than any other industry. Annual premium equivalent which forms the topline in life insurance players is a key parameter to observe. In simple terms, APE forms the premiums received by the companies from its various products. It usually measures the volume of new business premiums written in the course of the year. NBP is the term used for new business premium which should continuously grow for a life insurance player.


financial planning process 5 simple steps Bank CFO Srinivasan Vaidyanathan states that there were no guidelines on whether this action had to be achieved through fresh fund infusion or purchases from the market. It’s important to research and understand the industries and companies included in each sectoral index to make informed investment decisions. BOB Capital Markets gave a ‘Buy’ tag to the company with a target price of Rs 800 indicating an upside of around 46 percent as compared to the current price levels. We collect, retain, and use your contact information for legitimate business purposes only, to contact you and to provide you information & latest updates regarding our products & services. At this reasonable valuation, they can generate new business at a fast pace.

It is mostly concerned with loans, asset management, wealth management, and insurance. Up the process of claims through video calls and virtual offices will prove to be extremely effective for them in the long run. ICICI has a lower share of 5.3% in health compared to SAHI health players (26.8% share) and has scope for improvement.

Insurance Stocks NEWS

We take a look at what analysts are saying for select financial service stocks. Mr. B Gopkumar, MD & CEO, Axis Securities said “An extremely well-balanced budget focussed on growth driven by capital expenditure while giving an adequate push to rural welfare and agriculture. Government borrowing is well-calibrated, and it is a significant positive. The fiscal deficit target of 5.9% indicates a considerable degree of prudence. On top of this, relief to the middle class on the income tax front is the cherry on the cake.

  • Goldman Sachs maintained its neutral rating on ICICI Prudential Life Insurance Company post March quarter results but raised the target price to Rs 490 from Rs 460 earlier.
  • Price to Earnings Ratio (P/E)- It compares the company’s stock price with its earnings per share.
  • Historically, post SARS impacted China, MERS hit Saudi Arabia life premiums surged around 20-52% in the second year after the breakout.

Of life insurance is at 3.2% compared to world average of 3.3%, while penetration for non-life insurance is further lower at 1% in comparison to global non-life insurance segment’s at 4.1% as of FY22. The company’s consolidated net profit rose 26% to Rs 235 crore for the January-March period as compared to Rs 186 crore in the corresponding period of last year. The new business premium for the quarter rose 18% to Rs 5,635 crore against Rs 4,788 crore in the same quarter last year.

This allowed banks to enter into corporate agency alliances with upto 3 life, 3 non-life, and 3 standalone health insurance companies. Exclusive access to banking partners was a competitive advantage for many players but this changed the competitive landscape among the industry. Morgan Stanley and JPMorgan have both maintained an overweight rating on Bajaj Finance after its March quarter results. The former predicts a target price of Rs 8,000 and the latter Rs 9,000, citing strong asset quality and growth potential. Goldman Sachs has suggested a buy rating on SBI Life Insurance, with a target price of Rs 1,510 due to the company’s robust visible new business growth.

For FY24, Emkay said the GoI proposed withdrawal of the tax exemption on Maturity proceeds of Non-ULIP policies purchased after 1 April 2023, with an aggregate annual premium above Rs5lakh. Against the backdrop of the Budget, the industry, especially private players, is expected to continue witnessing strong growth in Mar-23, led by the strong sale of the high ticket-size policies being tax-exempt up to 31 March 2023. In its latest report, Emkay said, the life insurance industry posted a muted Retail APE growth of 10.5% YoY for Feb-23, with the Private sector growing at 18.2% and LIC’s retail APE declining by 3%YoY over the same period.

Taxation proposals, lower volumes may weigh on near term prospects

The balance sheet is well placed to tide through the crises with a solvency margin of 210%, well above regulatory requirements. Going forward, HDFC Life could emerge stronger because of its diversified product mix and well-established digital presence which will boost margins. An approval by IRDAI for a regulatory sandbox initiative to experiment on various innovative approaches will also aid HDFC Life to strengthen its product mix strategy. It is currently trading at higher valuations P/EV of 3.40x than peer average of 2.57/EV hence if you already own this stock you should continue holding it in your portfolio for the long term. As per the budget 2023, the maturity proceeds of all life insurance policies that are issued after 1st April 2023 and have an annual premium of more than Rs. 5 Lakhs will now be taxable. However, the death benefit continues to remain tax-exempt from such life insurance policies, and it is not applicable to ULIPs.

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Preeti Sharma, Partner – Tax and Regulatory Services, BDO India said the Finance Minister has taken conscious efforts to make the New Tax Regime more attractive for the taxpayers. Pick your 5 favourite companies, get a daily email with all news updates on them. Do you have the nerves of steel or do you get insomniac over your investments?

SBI Life is an Indian life insurance company founded by the State Bank of India and the French financial corporation BNP Paribas Cardif. SBI owns a 55.50% stake in the company, while BNP Paribas Cardif owns 0.22%. Ltd., each with a 1.95% stake, with the remaining 12% held by public investors. SBI Life has a paid-up capital of ₹10 billion (US$130 million) and authorized capital of ₹20 billion (US$270 million). In a week where the Q4 results of Infy brought to the street pressure on the Nifty, the counter force came in by way of financial service and banking stocks which saw an up move in a falling market and damage to Nifty was contained. It was not the first time that balance was created with two sectors making moves in opposite directions.

New business premium of life insurance companies rises 30% in November

While both belong to the insurance sector, there is a world of difference between macro and micro factors which impact the bottomline of the life insurance player and non life insurance player. The list is based on upside estimated by the analysts, with the highest potential stock coming on the top of the list. Groww is India’s growing financial services platform where users can find their investment solutions pertaining to mutual funds, stocks, US Stocks, ETFs, IPO, and F&Os, to invest their money without hassles.

«Prevent unauthorized transactions in your account update your mobile number/ email Id with your Stock Broker. Receive information of your transactions directly from Exchange on your mobile / email id at the end of the day.» Reinsurance is something that General Insurance Corporation of India specializes in. Its domestic business offers reinsurance coverage to direct general insurance firms on the Indian subcontinent, while its international business offers the same coverage to a number of businesses located in other countries.

On the other hand, INSURANCE (down 0.0%) was among the top losers. On the other hand, SBI LIFE INSURANCE (down 0.0%) was the top loser.

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Embedded value on the other hand is a valuation measure to estimate the consolidated value of shareholders’ interest in the insurance company. P/Ev and P/VNB are used as valuation multiples and India’s current average is 3.5 P/EV and 42.9 P/VNB. An investor should check for higher VNB margins as they translate to higher EV in the longer term. Moreover, there are a number of drivers that have a hand in shaping this industry and changing the distribution dynamics. In FY17 a significant development was allowed in the form of open architecture in bancassurance.

Investors are requested to note that Stockbroker Alice Blue Financial Services Private Limited is permitted to receive/pay money from/to investors through designated bank accounts only named as client bank accounts. Stockbroker Alice Blue Financial Services Private Limited is also required to disclose these client bank accounts to Stock Exchange. Hence, you are requested to use following client bank accounts only for the purpose of dealings in your trading account with us. The details of these client bank accounts are also displayed by Stock Exchanges on their website under “Know/ Locate your Stockbroker”. Bajaj Finserv Limited is a non-banking financial services firm headquartered in Pune, India.

Given the earning season has just started, moves and counter moves in different sectors are likely to continue. Indian insurance industry has been seeing a steady uptick in the premium amount collected, both in the life as well as non life segment. The premiums of Indian life insurers, from new business, stood at $81.7 billion in FY21, representing a 2.8% growth compared to the previous year. As per industry reports, India’s life insurance industry premiums are expected to reach $317 billion by FY31. Life insurance continues to be a key component of household financial savings and from FY15 the contribution of these life insurance premiums has increased by 3-5% points.

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In insurance business, an investor must always look out for a higher proportion of product mix which is long-tailed in nature. As a long-tailed business carries a longer settlement period which gives access to the investment float for a longer period. This will inturn lead to higher ROEs and this higher investment leverage will result in better returns. Motor TP and engineering or liability insurance are all long-tailed in nature. General insurance companies with a higher proportion to any of the above is expected to generate better returns. In fact in the last one year of volatility and bearish conditions, there has been a clear relative out performance by the banks.

In the short term, we expect the markets to move higher on the back of pro growth measures announced in the budget and less fear of the government crowding out private investments due to fiscal prudence shown by the government. The market has not held up on the gains, as, again, Banks and Adani group stocks have come under pressure apart from a correction in insurance stocks due to changes in taxation laws.» Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from the depository on your email id and/or mobile number to create a pledge. Pay 20% upfront margin of the transaction early to trade in the cash market segment. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.


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