Life Insurance Sector Q1 Results Review - Expect Strong Growth In H1; Margins Under Pressure: Nirmal Bang

Nirmal Bang Report

Life insurers continue to see strong growth (25.7% YoY growth July’24 year-to-date); we expect the momentum to continue in H1 FY25, led by a strong pipeline of products and continued traction across segments.

We expect value of new business margins to be under pressure as the new surrender value guidelines become effective from Oct-24. While life insurers continue to engage with distributors, we expect an impact of 100-200 bps on margins across covered companies.

In our view, ICICI Prudential Life Insurance Company Ltd. is better-positioned versus peers as it has already launched two products to navigate the new guidelines. We reiterate Buy on ICICI Life with a target price of Rs 850 (2.2 times FY26E price/embedded value versus Rs 750 at two times earlier).

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