Among individual counters, The New India Assurance Company
(NIAC) zoomed 7.6 per cent to Rs 142.35 in the morning deals on the BSE. Besides, General Life Insurance Corporation (GIC), gained 4.2 per cent, HDFC Life Insurance and ICICI Prudential Life Insurance
(2.4 per cent each), SBI Life Insurance
(2.3 per cent), and ICICI Lombard General Insurance Company
(1.1 per cent). In comparison, the benchmark S&P BSE Sensex was trading 0.13 per cent lower at 40,434.42 level at 9:52 AM. So far in calendar year 2019, most of the insurance stocks have outperformed the benchmark Sensex. Apart from GIC and NIAC, which declined 6 per cent and 27 per cent YTD till December 9, all other insurance stocks gave returns between 48 and 58 per cent. The S&P BSE Sensex, meanwhile, advanced 12 per cent during this period.
That apart, 37.2 per cent year-on-year (YoY) growth in new premiums between April-November further boosted buying sentiment. Life Insurance Corporation of India (LIC) beat the industry in the collections with a 44.5 per cent YoY growth in new premium at Rs 1.2 lakh crore. Private insurers, on the other hand, saw a 22 per cent YoY growth in the first-year premium at Rs 49,078.27 crore.
On an absolute new premium collection basis, HDFC Life Insurance saw a 26.5 percent YoY rise in new premiums to Rs 10,772.9 crore for the April to November period.
ICICI Prudential Life Insurance
saw a 20.3 percent YoY rise in new premiums in the April to November period to Rs 7,060.2 crore. SBI Life Insurance
saw a 38.7 percent YoY rise in the eight-month period to Rs 10,715.72 crore compared to a year ago.
Analysts at JM Financial forecast an industry annual premium equivalent (APE) CAGR of 16 per cent over FY19-21E driven by low penetration, omni-channel becoming the norm, and reduced competitive intensity from other saving products in a low interest rate environment.
"We had lowered our growth expectations for FY20F for select insurers (SBI Life and HDFC Life) in October and expect a moderate growth of 4-15 per cent for insurers, except for HDFC Life, which we believe will have a favourable base from Nov-19. While the growth trends were weak in Sep-19/Oct-19, the improved growth in Nov-19 implies that our coverage stocks will likely meet our APE growth expectationsm," wrote analysts at Nomura in a sector report. The brokerage values HDFC Life's EV at 4.3x for March-21, 2.8x Mar-21F EV for SBI Life, and 2.4x Mar-21F EV for ICICI Prudential Life Insurance.