Private life insurers expected to report modest growth in Q3
Private life insurers are set to report a modest growth in annualised premium equivalent (APE), a proxy for revenue in insurance, due to changes in taxation and a decline in group fund-based business in the December quarter.
The share of Unit-Linked Insurance Plans (ULIPs) is likely to rise, in lockstep with the surge in stock indices, slowing the growth in Value of New Business (VNB) margins.
General insurers are expected to report small premium growth, with listed ICICI General Insurance improving its combined ratio and net profit.
Listed private life insurers' VNB margins are likely to show some contraction on a year-on-year basis due to a reduced share of non-participating products in the product mix and movement in interest rates.
«In our view, this lower growth would be owing to sluggish growth in higher-ticket policies given the changes in taxation and decline in the group fund-based business,» said Avinash Singh, senior analyst, Emkay. «Driven by buoyant equity markets during Q3FY24, ULIPs are likely to contribute a higher share in the product mix, possibly leading to some negative implications for VNB margins.»
HDFC Life is expected to see an increase in new business premiums driven by annuity, non-PAR segments and retail protection.
Also, credit life is likely to see healthy traction as disbursement momentum across lending institutions remains strong, according to Motilal Oswal. HDFC Life is expected to see VNB Margins of 27.6% and new business APE growth of around 5%.
Similarly, ICICI Prudential Life Insurance is expected to see VNB margins of 29.5%, but a decline in new business APE.
