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Life Insurance shares in focus; HDFC Life, Max Financial hit record highs
Share price movement of life insurance companies today
Shares of listed life insurance companies were in focus, gaining up to 4 per cent on the BSE in Friday's intra-day trade.
Max Financial Services (up 4 per cent at ₹1,467.50) and HDFC Life Insurance Company (up 2 per cent at ₹770.95) hit their respective all-time highs. SBI Life Insurance Company, ICICI Prudential Life Insurance Company (ICICI Pru) and Life Insurance Corporation of India (LIC) were trading higher in the range of 2 per cent to 3 per cent.
Axis Max Life Insurance, formerly known as Max Life Insurance Company., is a Joint Venture between Max Financial Services and Axis Bank. Axis Max Life Insurance offers comprehensive protection and long-term savings life insurance solutions through its multi-channel distribution, including agency and third-party distribution partners.
Sector Outlook
Insurance penetration is still low in India as compared to international benchmarks. Factors such as a large protection gap and expanding per capita income are key long-term growth drivers for the sector.
India has a high protection gap; and credit protection products are still at an early stage and have the potential to grow multi-fold as penetration of retail loans improves in the country. Hence, Mirae Asset Sharekhan believes the insurance sector has a huge growth potential in India. Against this backdrop, the brokerage firm believes that strong players with the right mix of products, services, and distribution are likely to gain disproportionately from the opportunity. However, regulatory changes/ competition, may impact growth and profitability.
Elara Capital view on HDFC Life Insurance
HDFC Life Insurance reported an APE (annualized premium equivalent) growth of 10 per cent year-on-year (YoY) in March 2025 quarter (Q4FY25), driven by: a) sharp growth in participating products on the back of new product launches, b) a pick-up in retail annuity segment, c) continued growth in retail protection segment and d) unit linked products (ULIP). Consequently, Value of New Business (VNB) margin improved QoQ and YoY by 30bps and 50bps, respectively, resulting in a VNB growth of 12 per cent YoY in Q4FY25. ALSO READ |
Analysts at Elara Capital believe APE and VNB growth for HDFC Life will continue to be higher than industry as it continues to enhance its strong franchise with innovative products and investments in technology transformation and deeper distribution. The brokerage firm raised its target multiple to 2.5x P/EV FY27E from 2.1x P/EV, on the back of 50bps reduction in cost of capital implying a raised target price of ₹870 (from ₹720) – Upgrade to Buy.
Emkay Global Financial Services on SBI Life
Over recent quarters, SBI Life has invested heavily in the agency channel, leading to higher agent activation and increased productivity. Going forward, the management would continue to invest in the agency led by investments in both, agent and branch additions. Against this backdrop, the management remains confident of delivering ~20- 25 per cent Retail APE growth in the agency channel, whereas the banca channel should track single digit Retail APE growth resulting in overall ~13-14 per cent retail APE growth for the company in FY26. ALSO READ |
The management expects a stable margin outlook, given 1) lower contribution from ULIP to be offset by growth in Par, both tracking similar margins, 2) increase in share of non-par and protection products, 3) investments in the agency channel and opening of new branches leading to higher fixed costs. The brokerage firm reiterated its BUY rating and revised up its Mar-26E target price to ₹1,950 (from ₹1,850 earlier), implying 2.0x FY27E P/EV.
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