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Insurance stocks rally 3-20% on premium collections data, SBI Q2 numbers

New India Assurance Company was locked at 20 percent upper circuit at Rs 113.75, but ICICI Lombard General Insurance Company fell 6 percent following premium collections data.

October 16, 2019 / 03:37 PM IST
 
 
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Shares of insurance companies gained 3-20 percent intraday on October 16 after SBI Life reported consistent growth in September quarter earnings and an increase in premium collections during the first half of FY20.

New India Assurance Company was locked at 20 percent upper circuit at Rs 113.75, but ICICI Lombard General Insurance Company fell 6 percent following premium collections data.

General insurers saw a 17.2 percent year-on-year (YoY) increase in the premium collections for April to September (H1FY20) period. Data from the Insurance Regulatory and Development Authority of India (IRDAI) showed that non-life insurers collected Rs 95,978.99 crore gross direct premium in the first half of FY20.

Among the different business segments, standalone health insurers saw a 36.1 percent YoY increase in premium to Rs 6,096.98 crore. The specialised PSU insurers wrote premium of Rs 7,079.50 crore showing an 8.5 percent YoY increase while the other general insurers saw a 16.8 percent YoY increase in premiums.

With respect to the listed entities, New India Assurance saw a 15.15 percent YoY growth to Rs 13,544.01 crore, but ICICI Lombard saw a 11.8 percent YoY drop in premiums to Rs 6,439.50 crore.

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Life insurance stocks were also buzzing after SBI Life reported in-line results with strong gross written premium (GWP) and annual premium equivalent (APE) growth of 33.3 percent YoY and 17.5 percent YoY, respectively, in Q2FY20, led by a focus on protection, annuity and individual non-par savings business.

Company's Value of New Business (VoNB) increased 33 percent YoY to Rs 940 crore in H1FY20 while the VoNB margin increased from 19.2 percent to 20.2 percent in H1FY20 on a 400bps positive variance from a change in product mix, neutral effect of change in assumptions (as will be reviewed by year-end) and 300bps negative impact due to falling interest rates.

SBI Life's new business premium (NBP) continued to grow strong at 40 percent YoY in H1FY19 with APE growth of 26 percent on very strong growth from non-PAR.

As a result, HDFC Life, ICICI Prudential and SBI Life Insurance gained 3-6 percent intraday. In fact, SBI Life and HDFC Life hit record highs during the day.

Shares of General Insurance Corporation of India, which provides reinsurance solutions, also jointed the party as it was locked at 20 percent upper circuit.
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