Life insurance stocks: Investors need to pause, wait for better cues

Growth challenges coupled with pricing issues and recent stock market rally doesn't bode well

There are two ways of looking at the recently released life insurance premium collection data for the month of August. Certainly, when compared to months under lockdown, when premia collected declined by 23 - 28 per cent year-on-year, August month’s eight per cent decline seems better. In other words, more people seem willing to meet their premium dues or buying new insurance plans.

However, it is important to dissect the data finely before turning optimistic on the sector. Consider this, much of the growth has come from group insurance premium (up 30 per cent year-on-year) and single premium products (up 60