“We expect 2QFY27 earnings call discussion and stock price performance to be centered around the impact of the proposed distribution norms and EoM guidelines, with less emphasis on the quarterly financial performance itself,” a research report by Kotak Institutional Equities
New Delhi: Life insurance companies in India are likely to register a 10 to 20 per cent year-on-year growth in value of new business (VNB) during the second quarter of FY27, even as broader discussions focus heavily on proposed regulatory guidelines rather than quarterly operational prints, according to a research report by Kotak Institutional Equities.
The brokerage noted that private life insurers under its coverage show steady underwriting performance, driven largely by solid expansion in protection plans despite moderate annualised premium equivalent (APE) growth.
“We expect 2QFY27 earnings call discussion and stock price performance to be centered around the impact of the proposed distribution norms and EoM guidelines, with less emphasis on the quarterly financial performance itself,” the report stated.
Growth in protection is supporting margins and VNB despite moderate (10-15% yoy for the private sector) APE growth. Health claims tend to inch up in 2Q, though secular improvements and higher leverage continue to drive core earnings; trends in motor TP claims provisioning will drive the performance of non-life companies for the quarter. PB will continue on a steady growth path,” the report added.
Analyzing company-level performances across the life insurance basket, the brokerage projects private insurers to record 10 to 15 per cent APE growth with a 6 to 18 per cent increase in VNB, alongside net margin shifts ranging between negative 200 basis points and positive 150 basis points.
State-owned Life Insurance Corporation of India (LIC) is projected to outpace private peers on profitability, delivering an estimated 320 basis points of margin expansion to 22.5 per cent on the back of higher non-participating product share, which drives a 40 per cent surge in its VNB.