Home/ Markets / Stock Markets/  Insurance stocks today: GIC share jumps 9%, LIC shares rise 3%; why are insurance stocks rising? Should you bet on them?

Many insurance sector stocks traded with healthy gains in morning trade on BSE on May 4, with shares of General Insurance Corporation of India (GIC) surging nearly 9 per cent and those of Life Insurance Corporation of India (LIC) rising nearly 3 per cent.

Shares of The New India Assurance Company jumped nearly 7 per cent while shares of ICICI Prudential Life Insurance Company and SBI Life Insurance Company rose 2 per cent each.

Stocks such as HDFC Life Insurance Company, Star Health and Allied Insurance Company and ICICI Lombard General Insurance Company rose up to a per cent.

Some of the insurance companies have posted decent March quarter earnings which appears to have a positive rub-off on other sectoral peers.

Industry observers point out that healthy quarterly numbers and a positive growth outlook have made some of the insurance stocks attractive bets for the long term.

Healthy Q4 show

HDFC Life posted a standalone PAT of 358.66 crore in March 2023 quarter, rising by 13.8 per cent from 315.22 crore in the preceding quarter. The company declared a dividend of 1.90 per equity share. The insurer closed the fiscal year FY23 on a strong note delivering growth across all key metrics.

Star Health and Allied Insurance Company's profit after tax (PAT) stood at 619 crore for the financial year ended March 31, 2023, against a loss of 1,041 crore in FY22. During the quarter ending March 2023, the company's net profit reached 101.79 crore against a net loss of 82.04 crore during Q4FY22.

The total annualised premium equivalent (APE) of ICICI Prudential Life Insurance Company rose nearly 26.5 per cent year-on-year in Q4 and 11.7 per cent YoY in FY23.

SBI Life Insurance Company records double-digit growth in both PAT and net premium incomes in the fourth quarter of FY23. SBI posted a 15.57 per cent growth in PAT to 776.85 crore in Q4FY23, compared to a profit of 672.15 crore in the same period a year ago. Net premium income soared by 14.1 per cent to 19,896.92 crore versus 17,433.77 crore in Q4 of the previous fiscal.

ICICI Lombard posted a net profit of 436.96 crore in Q4FY23, rising by 39.82 per cent compared to a profit of 312.51 crore in the same quarter a year ago.

Read all market-related news here

Road ahead

Most insurance firms ended the financial year 2023 on a strong note and their growth prospects look attractive.

As per a report by CareEdge (CARE Ratings), the Indian non-life insurance market would grow by approximately 13-15 per cent over the medium term.

"The health insurance segment is on track to breach the 1 lakh crore mark, while Motor insurance premiums to cross 85,000 crore in FY24 given the fact that they have already crossed 90,000 crore and 80,000 crore mark respectively during the last year," CareEdge said.

"The growth would be driven by the popularity of health insurance products/schemes, growing demand for motor insurance (third party and owner damage) products, an expected rise in per capita / disposable income levels, a greater volume of transactions under segments such as fire, marine, export credit, customised products, especially in motor and health insurance and gradual introduction of new products."

"Further, improving profitability, and stabilisation of loss ratios which had increased during the pandemic, expenses of management would be controlled given the regulations around the same, enabling regulatory environment, strengthening of distribution networks (increase in the number of partners, digital issuance and online channels are expected to witness continued growth) higher investment yields due to a rising interest rate environment and adequate availability of growth capital will support growth," said CareEdge.

The rating agency said the outlook is expected to be stable in the medium term. However, the intensification of competition and an uncertain geopolitical environment and high inflation can negatively impact economic growth and subsequently the non-life insurance sector.

Disclaimer: The views and recommendations given in this article are those of the rating firm. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 04 May 2023, 10:44 AM IST
Recommended For You

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Get alerts on WhatsApp
Set Preferences My Reads Watchlist Feedback Redeem a Gift Card Logout