Life insurance stocks: Concerns may be priced in; analysts 'optimistic'

While they are trading at substantial discount to their average historical multiples, data shows there is pickup in business in May

The change in tax regulations bringing high value policies with premiums exceeding Rs 5 lakh under the income tax net was expected to impact the life insurance industry badly. Two months into the new financial year, data suggests there was a reasonable pickup in May 2023, after a flat April 2023. 

Private life insurers reported 10 per cent year-on-year (YoY) Annual Premium Equivalent (APE) growth in May, following April which didn’t have healthy numbers.

Month-on-month (MoM), May grew by 42 per cent over April. The YoY calculations were on a high base since May’22 showed a high 101 per cent