India’s life insurance stocks rose on Friday, October 9, led by HDFC Life Insurance Ltd., as brokerages HSBC and Nomura retained a positive outlook on the sector despite moderating individual premium growth and uncertainty over proposed regulatory changes.
HSBC said individual annualised premium equivalent (APE) growth moderated to around 9% year-on-year in September due to a higher base. HDFC Life grew faster, while ICICI Prudential Life and Axis Max Life were broadly flat. SBI Life Insurance reported a decline in individual APE.
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Nomura’s data showed private life insurers’ individual APE grew 7% year-on-year in September, against a base growth of 8% a year earlier. Policy volumes, measured by the number of policies, rose 6%, compared with a 3% decline in the year-ago period.
On a total APE basis, private insurers recorded 24% growth in September, against 11% a year earlier. Listed life insurers reported mixed growth in individual premiums in September.
HDFC Life Insurance outperformed peers even as a higher base moderated growth across the sector. It grew 27%, followed by ICICI Prudential Life at 10% and Axis Max Life at 7%. SBI Life’s total APE declined 1% year-on-year.
Brokerages remain positive despite regulatory uncertainty
HSBC views the Insurance Regulatory and Development Authority of India’s (IRDAI) consultation paper on insurance distribution as structurally positive for insurers over the long term and retained a positive outlook on the sector.
The proposals seek to tighten commission caps and reduce insurers’ expenses of management, alongside changes aimed at improving transparency and curbing mis-selling. The regulator has proposed a phased reduction in expense limits, with life insurers moving towards a 12.5% cap over five years.
Read more: IRDAI’s insurance reforms need phased rollout, not one-size-fits-all approach: Industry CEOs
However, the regulatory framework remains in flux. Nomura said the landscape had received a significant shock, with developments evolving rapidly, but said it remained comfortable with life insurers, particularly SBI Life, ICICI Prudential Life and HDFC Life.
Life insurance stocks trade higher
Life insurance stocks traded higher on Friday, led by HDFC Life Insurance, which was up about 2% to ₹555.45. ICICI Prudential Life Insurance rose nearly 2% to ₹463.40, while SBI Life Insurance advanced 0.8% to ₹1,695.20.
Max Financial Services, which owns an 80.98% stake in Axis Max Life Insurance, edged up 0.29% to ₹1,326.20.