IGI Logo

The general insurance industry reported a weak 5.2% YoY growth in premiums in Jun’25, reporting INR 234bn on an unadjusted (reported) basis. This follows a growth of 6.5%YoY in May’25. April growth was higher at 13.5% YoY due to the higher proportion of fire business, which has minimal impact of 1/n guidelines. Private multi-line players reported flat (-0.3% YoY) premiums in Jun’25, PSUs grew 15.4% YoY and SAHIs reported a growth of 10.5% YoY in Jun’25 – in line with 10.0% YoY in May’25. However, these growth numbers are not understated as long term policy premiums are in the base and would be comparable only post Oct’25.

Within private multi-line players, Bajaj Allianz outperformed its listed peers with 17.1% YoY growth in Jun’25 (and 21.0% YoY growth in May’25) while Go Digit also returned to growth path with 11.6% YoY (vs -2.2% YoY in May’25). ICICI Lombard, however, saw premiums contract 10.4% YoY following tepid growth of 2.4% and 6.7% YoY in Apr’25 and May’25, respectively. This may due to lower crop business – which accounted for 7% of ICICIGI’s premiums in Jun’24.

Amongst SAHIs, Star Health posted a 2.9% YoY growth (vs 3.3% YoY in May’25). For 4Q25, Star’s growth, adjusted for 1/n accounting, came in at a respectable 12.8%, despite cutting down on group business. Niva Bupa reported strong growth of 15.5% YoY (vs 9.7% in May’25) while Aditya Birla Health continued its strong growth momentum with 26.5% YoY growth (36.1% YoY in May’25 and 27.5% FYTD’25).

While general insurance sector has seen pressure in terms of growth, lower growth numbers include the impact of higher share long term policies post 1/n regulation by IRDAI in Oct’24. We are focused on revival in growth and pricing in commercial lines, especially the high-RoE fire segment, and group health. These segments have seen pricing pressure with insurers’ focus on complying with IRDAI’s EOM guidelines on a blended basis.

Despite weak growth, we prefer ICICI Lombard in general insurance, valuing the insurer at 32x FY27e EPS of INR 67 for a Target Price of INR 2,150. We have a HOLD rating on Star Health, valuing it at 20x FY27e EPS of INR 20 to get a Target Price of INR 400.

Please refer disclaimer at https://www.jmfl.com/disclaimer

SEBI Registration Number is INM000010361