The share of Unit-Linked Insurance Plans (ULIPs) is likely to rise, in lockstep with the surge in stock indices, slowing the growth in Value of New Business (VNB) margins.
General insurers are expected to report small premium growth, with listed ICICI General Insurance improving its combined ratio and net profit.
Listed private life insurers’ VNB margins are likely to show some contraction on a year-on-year basis due to a reduced share of non-participating products in the product mix and movement in interest rates.
“In our view, this lower growth would be owing to sluggish growth in higher-ticket policies given the changes in taxation and decline in the group fund-based business,” said Avinash Singh, senior analyst, Emkay. “Driven by buoyant equity markets during Q3FY24, ULIPs are likely to contribute a higher share in the product mix, possibly leading to some negative implications for VNB margins.”
HDFC Life is expected to see an increase in new business premiums driven by annuity, non-PAR segments and retail protection. Also, credit life is likely to see healthy traction as disbursement momentum across lending institutions remains strong, according to Motilal Oswal. HDFC Life is expected to see VNB Margins of 27.6% and new business APE growth of around 5%.
Similarly, ICICI Prudential Life Insurance is expected to see VNB margins of 29.5%, but a decline in new business APE. SBI Life is expected to maintain VNB Margins at around 28% as the protection mix and non-PAR growth will be healthy with the company focusing on the segment. General insurers are expected to clock decent growth in premiums, driven by growth in retail health and motor own damage.