This Bluechip Life Insurance Stock Is down 6.5% In Trade Today, Should You Buy?

The shares of ICICI Prudential Life Insurance has fallen a huge 6.5% in trade, following its quarterly numbers. Is it a good buy the stock now following the sharp fall.

Emkay Global prefers to buy other life insurers

Broking firm, Emkay Global says that amid the rapidly changing external environment, changing customer demographics and their product preferences, its hypothesis of large private life insurers continuing to take market share away from LIC is playing well and will continue to play in the coming years. Powered by their strong brands and distribution network (especially the banacassurance reach), private sector leaders are executing their strategy nicely by being agile and innovative when it comes to offering the insurance products to match customer preferences and needs amid the dynamic external environment.

Previous close	Current market price	Fall %
Rs 608	Rs 565	6.3%

"Based on risk-reward proposition, our pecking order of stocks is a Buy on SBI Life Insurance, Buy on Max Financials and a buy on HDFC Life," the brokerage has said.

It does not have a buy on the stock of ICICI Prudential Life Insurance, but, does have a hold call on the stock.

Strong growth in GTI, led by price hikes

According to the broking firm, group Term Insurance (GTI) segment has delivered 69% YoY premium growth in 9MFY22 against the sum assured growth of 28% YoY in the same period. This is largely a reflection of strong price hikes taken by the life insurers in the GTI segment post adverse claims experience in the damaging second wave of Covid-19. For FY22, growth in the GTI segment should be strong at levels similar to 9MFY22. In FY23, the pricing should likely to stabilize at the current levels; hence, growth should be driven by increase in sum assured.

Our own belief is that that the stock of ICICI Prudential Life is over valued and hence despite the fall in the stock, it is not a good buy at the current levels. Investors can easily find value elsewhere.

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and is family do not hold shares in the above mentioned companies.