The article discusses the projected performance of key players in the life insurance sector, as covered by a brokerage. SBI Life is expected to maintain its value of new business (VNB) margins in the range of 27.0-29.0% for FY26E, thanks to favorable reinsurance pricing and continuous product innovation. HDFC Life is well-positioned to stabilize or improve its margins, driven by improving persistency rates, higher universal life insurance plan (ULIP) attachment rates, and operating leverage.
ICICI Prudential Life, on the other hand, is targeting mid-teen VNB growth, although its near-term margin performance may be impacted. The brokerage expects SBI Life to maintain its leading position in the sector, driven by its strong brand, wide distribution network, and innovative products. HDFC Life is also expected to continue its strong performance, driven by its strong brand reputation and solid execution.
The brokerage notes that HDFC Life’s persistency rates have improved significantly over the past two years, and it expects this trend to continue, driving higher margins. ICICI Prudential Life, while targeting strong growth, may face challenges in the near term due to increases in operating expenses and mild pressure on margins.
Overall, the brokerage expects the life insurance sector to continue its growth trajectory, driven by increasing demand for insurance products, regulatory support, and the efforts of individual companies to improve their product offerings and distribution channels. The sector’s growth is expected to be driven by a combination of factors, including increasing penetration, expanding product offerings, and the growth of digital channels.
In terms of key performance indicators, the brokerage expects VNB margins to remain stable or improve for HDFC Life, while SBI Life’s margins are expected to remain in the 27.0-29.0% range. ICICI Prudential Life’s margins are expected to face some pressure in the near term due to increased operating expenses, but the company is targeting mid-teen VNB growth over the medium term. Overall, the brokerage’s analysis suggests that the life insurance sector is set to continue its growth momentum in the coming years.