Business News | Insurance Sector Set for Stronger Year as Life, Health Insurers Post Robust Growth: Kotak
Get latest articles and stories on Business at LatestLY. India's insurance sector could see a stronger year ahead as life insurers post robust growth and health insurers benefit from improved new business and lower claims, even as insurance stocks have remained under pressure, according to a report by Kotak Institutional Equities.
New Delhi [India], August 20 (ANI): India's insurance sector could see a stronger year ahead as life insurers post robust growth and health insurers benefit from improved new business and lower claims, even as insurance stocks have remained under pressure, according to a report by Kotak Institutional Equities.
The report noted that private insurance stocks have underperformed by 7-15 per cent over the past three months, but said the weak market performance does not reflect the improvement in their underlying business.
Also Read | BLACKPINK Jennie's Agency Threatens Legal Action Over Wardrobe Malfunction Video and Malicious Edits.
Life insurers recorded 8-36 per cent growth in annualised premium equivalent (APE) in the first quarter of FY27, while margins improved by around 200-300 basis points for several players. Kotak said growth was particularly supported by protection products such as term insurance, along with traditional savings and annuity products.
Importantly, the improvement came despite the impact of the GST exemption on insurance, which resulted in a loss of input tax credit for insurers. The report said insurers had passed the benefit of the GST cut on to customers, with term insurance premiums falling across several companies.
Also Read | Jharkhand Rock Offers 3.5-Billion-Year-Old Evidence of Life, Among Oldest Directly Dated Signs on Earth.
Kotak expects insurers to focus more on growth going forward as uncertainty around proposed commission regulations eases. "With commission guidelines being pushed out, we expect insurance companies to focus on growth and have a decent year," the report said.
The improvement is also visible in health insurance. New business growth for health insurers rose 37-41 per cent in the first quarter, while the combined ratio -- a measure of how much of premium income is used for claims and expenses -- improved by 160 basis points for Star Health and 300 basis points for Niva Bupa.
Kotak, however, flagged risks for diversified non-life insurers from higher motor third-party claims. It maintained a positive view on life insurers, saying valuations were attractive despite regulatory concerns.
For life insurers, Kotak expects moderate mid-teen growth for most private players over the next few years, while forecasting more measured growth for LIC. (ANI)
(The above story is verified and authored by ANI staff, ANI is South Asia's leading multimedia news agency with over 100 bureaus in India, South Asia and across the globe. ANI brings the latest news on Politics and Current Affairs in India & around the World, Sports, Health, Fitness, Entertainment, & News. The views appearing in the above post do not reflect the opinions of LatestLY)