3 Stocks To Buy From The Life Insurance Space For Good Returns

Broking firm Sharekhan has come-up with its latest report on the life insurance space as well as its preferred picks from the space. Here are a few stocks from the life insurance space the firm is recommending to buy.

New life insurance premium surges

According to Sharekhan, for May 2022, new business premium for the industry grew strongly by 89% y-o-y and 37% m-o-m on a lower base of May 2021, which saw muted growth on account of lockdowns. The growth in premium was primarily aided by private players whose NBP increased by 114% y-o-y in May 2022.

"Among the listed and other large players, SBI Life Insurance (SBI Life) reported the fastest new business premium growth in May 2022 (rose by 136% y-o-y and 23% m-o-m). While, LIC witnessed premium growth of 77% y-o-y and 35% m-o-m. ICICI Prudential Life Insurance reported at par industry growth in premium (up 87% y-o-y and 37% m-o-m). Max Life Insurance witnessed premium growth of 62% y-o-y and 32% m-o-m in May 2022. While HDFC Life Insurance reported premium growth of 62% y-o-y (4% m-o-m). Likewise, total annual premium equivalent (APE) for SBI Life Insurance saw strong growth of 182% y-o-y and 16% m-o-m. LIC saw its total APE growing by 79% y-o-y and 37% m-o-m. Total APE for Max Life Insurance rose by 73% y-o-y (39% m-o-m). For HDFC Life Insurance, APE grew by 54% y-o-y and 25% m-o-m in May 2022. For ICICI Prudential Life Insurance, APE grew by grew by 40% y-o-y (flat m-o-m)," the brokerage firm has said.

Individual APE demonstrated strong growth

According to Sharekhan, companies under its coverage saw robust individual APE growth in May 2022 on yearly basis. Max Life reported the fastest individual APE growth of 73% y-o-y and 40% m-o-m, after witnessing slower growth in April 2022. Growth for HDFC Life was at 52% y-o-y and 34% m-o-m. While ICICI Prudential saw individual APE growth of 36% y-o-y (down 2% m-o-m). Individual APE growth for SBI Life Insurance surged by ~194% y-o-y and 16% m-o-m.

Sharekhan stocks to buy from insurance space

Sharekhan has recommended its stock picks of Max Financial, HDFC Life and ICICI Prudential Life.

"We believe that after witnessing muted growth in business premiums in January and February 2022, the life insurance industry is witnessing heathy recovery. The protection segment for life insurers is expected to continue to gain pace as supply-side issues subside and non-par and annuity segments are likely to witness strong growth. While ULIPs are expected to remain affected by volatility in capital markets. Further, after witnessing underperformance for the past two years, the insurance sector is poised to return to a healthy growth trajectory. Factors such as a large protection gap and expanding per capita income are key long-term growth drivers for the sector. In this backdrop, we believe strong players armed with the right mix of products, services, and distribution are likely to gain from this opportunity," the broking firm has said.

Disclaimer

Investors are advised caution as the markets have become exceedingly volatile. Neither Greynium Information Technologies, nor the author, nor the brokerage firm, would be responsible for any losses based on a decision reading the above article. Every effort has been made to provide accurate information and readers should understand the inherent risks before investing in the markets.