By Aparna Deb,News18

Copyright news18

Insurance Stocks Rise: Insurance stocks traded higher on Monday after foreign brokerage JPMorgan upgraded ratings and raised target prices on select life and non-life insurers, citing sustained growth potential and resilient balance sheets. Shares of HDFC Life Insurance, Life Insurance Corporation of India (LIC), and General Insurance Corporation of India (GIC Re), among others, gained over a percent in trade.
JPMorgan expects India’s insurance sector to maintain its compounding growth momentum, similar to trends observed over the past five years. This, it said, will support balance sheet expansion and showcase resilience through market and regulatory cycles.
The brokerage forecasts annual growth of 15% in new business value (NBV) for life insurers and 12% in book value for non-life players over the next three years, offering what it considers an attractive risk-reward profile.
LIC remains JPMorgan’s top ‘Overweight’ pick, with a share price target of Rs 1,152 apiece. Greater clarity on GST-related product strategies could act as a near-term catalyst during the 2QFY26 earnings season in mid-October, it noted.
HDFC Life shares were upgraded to ‘Overweight’, with the target price raised to Rs 980 from Rs 750 earlier. GIC Re shares were also upgraded to ‘Overweight’, with the target price hiked to Rs 480 per share from Rs 197 previously.
Life Insurance Companies
According to JPMorgan, despite strong operating performance, the market has assigned conservative valuations to life insurers. Regulatory concerns have compressed the price-to-embedded value (P/EV) multiple from 4.3x in 2019 to an estimated 1.8x for FY26.
The brokerage views this as a compelling opportunity to add exposure, anticipating multiple expansion, and does not expect further significant regulatory tightening in the coming years.
LIC is projected to deliver the strongest growth over the next three years, driven by a rising share of non-participating products, which climbed to 30.3% of individual APE in Q1FY26 from 18.3% in FY24.
HDFC Life is expected to regain its valuation premium within one to two years, as IFRS-17 standards better reflect its reserve strength and higher contractual service margin compared to peers that rely more heavily on ULIPs. SBI Life is also seen benefiting from its strong bank distribution network.
Non-life Insurance Companies
JPMorgan believes India’s non-life insurance sector continues to face profitability challenges, with underwriting margins under pressure and combined ratios remaining above 100%.
Even so, it upgraded GIC Re shares, citing improvements in overseas underwriting from the 2025 renewal season and potential earnings catalysts as legacy claims are resolved. However, ICICI Lombard General Insurance was not upgraded, given the unfavourable domestic underwriting cycle.
JPMorgan’s pecking order in the sector is: LIC, SBI Life, HDFC Life, GIC Re, New India Assurance, ICICI Lombard, and ICICI Prudential Life.
Meanwhile, the Goods and Services Tax (GST) exemption on individual life and health insurance policies came into effect today. The GST Council has removed the 18% levy on health insurance premiums to enhance affordability and improve insurance penetration across the country.
At 11:50 AM, LIC was trading 1.56% higher at Rs 908.20 apiece, HDFC Life was up 0.32% at Rs 785.05 apiece, while GIC Re gained 0.93% to Rs 367.35 apiece on the BSE.