MUMBAI: Private sector companies in the insurance industry posted a strong growth in March with annual premium equivalent growing 19 per cent from a year ago.
Analysts believe that this hints at a stable growth trend and reaffirms that the structural trend of a market share shift towards private players remains intact.
“The 19 per cent growth for private insurers came off reasonable base growth of 7 per cent year-on-year in March 2018 and indicates a stable growth trend for the last 3-4 months now in spite of market volatility,” said Nomura.
SBI Life Insurance Company remains a preferred pick for many in the
life insurance space due to rising market share and strength in the protection business.
“SBI Life has a strong bancassurance partner (parent company SBI) that only sells SBI Life products. Overall, NBP (new business premium) growth for the company has remained strong over the past 2-3 years, with improving market share,” said
CIMB Securities. SBI Life is CIMB’s top pick in the sector with an add rating and target price of Rs 715.
SBI Life’s shares ended down 2.8 per cent at Rs 599.35 on Tuesday in a subdued market. The stock has declined 16 per cent in the past one year. “SBI Life reported 28 per cent year-on-year growth in new business APE on a slightly subdued base of March 2018. SBI continues to gain share with 22.5 per cent share within private insurers in FY19 versus 16 per cent in FY16 and it has also delivered a big swing in its protection business, warranting a re-rating,” said Nomura, adding that SBI Life remains its preferred pick in the space.
For
Deutsche Bank, SBI Life and ICICI Prudential are the key picks in the life insurance space while it has a hold rating on
HDFC Life.
Nomura has a neutral rating on HDFC Standard Life. It prefers SBI Life in the life insurance space followed by Max Financial and ICICI Prudential Life.