Insurance share price target

The life insurance sector is poised to deliver a strong performance in Q4FY25E, supported by a
seasonal surge in new business volumes and steady growth in renewal premiums. However,
margins are expected to remain broadly stable or may see slight compression due to product mix
and pricing dynamics.

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The life insurance sector exhibited healthy premium growth in Q3FY25, supported by diversified product portfolios, digital transformation, and expanding distribution networks. While margin pressures persisted, insurers are actively shifting towards high-margin products and driving operational efficiencies to sustain
profitability.

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In Q3FY25E, the business growth is expected to remain steady, with life insurers under our coverage universe likely to report an 18.4% YoY increase in APE, aided by strong demand for ULIPs and improved traction in the protection segment despite regulatory changes regarding surrender value. In Q3FY25E, we expect the gross premium for life insurers under our coverage to grow by 15.5% YoY.

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In September 2024, private insurers sold 8.7 lakh policies, while LIC sold 23.5 lakh schemes. The first-year premium for private insurers grew by 16.4% YoY to Rs 14,651 crore. Meanwhile, LIC's first-year premium increased to Rs 20,369.3 crore, but its market share contracted by 80 bps YoY.

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The life insurance sector has already demonstrated a significant increase in new business premiums, with a 22.9% YoY growth in Q1FY25. This momentum is expected to carry into Q2FY25E, supported by a low base effect and increasing consumer awareness of insurance products.

In August 2024, private insurers sold 7.6 lakh policies, while LIC sold 16.4 lakh schemes. The first-year premium for private insurers grew by 6.7% YoY to Rs 13,335 crore. Meanwhile, LIC's first-year premium increased to Rs 19,309.1 crore, with its market share expanding by 580 bps YoY.

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In July 2024, private insurers sold 7.6 lakh policies, while LIC sold 16.3 lakh schemes. The first-year premium for private insurers grew by 7.3% YoY to Rs 13,379.2 crore. Meanwhile, LIC's first-year premium increased to Rs 18,430.6 crore, with its market share expanding by 270 bps YoY.

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The life insurance companies within our coverage demonstrated robust YoY business growth, yet VNB margins continued to face pressure due to the shifttowards linked product portfolios.
We are confident that the companies we cover will significantly expand their product offerings through exciting new launches while enhancing their digital capabilities.

India's life insurance sector experienced healthy growth in Q1FY25. The provisional New Business Premiums (NBP) for the industry grew by an impressive 22.9% YoY led by a surge in both premium collections and policy issuances, reflecting a robust market performance and a significant uplift in consumer confidence in life insurance products.

In June 2024, private insurers sold 7.1 lakh policies, while LIC sold 14.6 lakh schemes. The first-year premium for private insurers grew by 9.7% YoY to Rs 10,333.4 crore. Meanwhile, LIC's first-year premium increased to Rs 28,366 crore, with its market share falling by 70 bps YoY.

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In May 2024, private insurers sold 6.2 lakh policies, while LIC sold 12.5 lakh schemes. The first-year premium for private insurers grew by 9.7% YoY to Rs 10,333.4 crore. Meanwhile, LIC's first-year premium increased to Rs 16,690.4 crore, with its market share rising by 190 bps YoY.

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