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Life Insurance Corporation of India, the largest insurer in the nation, jumped the most in eight months on the expectation of double-digit growth in new business premiums.
The insurer is expecting higher growth based on a recent trend showing an uptick in individual retail business, Chairman Siddhartha Mohanty told the local news agency, Press Trust of India, in an interview published Thursday.
Its shares jumped as much as 10.4%, the most since March 24, while trade volume surged. State run general insurers New India Assurance Co. and General Insurance Corporation of India also registered gains. The brighter outlook for the sector underscores the potential for insurers as the Indian economy grows faster than most major peers.
“Premium growth in the first half of the year wasn’t very good. The expectation is that going ahead they will grow in double-digit and gain back some market share” Mohit Mangal, an analyst at BoB Capital Markets Ltd., said by phone on Friday.
LIC Rallies More Than 10% on Premium Growth Optimism
For the last financial year that ended March, LIC’s income from new business premium grew 6.9%. In this first half of this fiscal year the growth was less than 3%.
The comments from LIC chairman come after the Reserve Bank of India last week imposed curbs on unsecured lending by banks and shadow lenders to stem the relentless rise in risky consumer loans, sending shares lower.
Shares of non-lending firms such as insurers and asset managers are safer spots than banks, Jefferies said in a report on Thursday, after India’s central bank warned banks to undertake stress tests and avoid “exuberance.”
“Some hot money could be moving out of lenders to insurers after these actions,” said Kranthi Bathini, director of equity strategy at WealthMills Securities Pvt.
The insurer is expecting higher growth based on a recent trend showing an uptick in individual retail business, Chairman Siddhartha Mohanty told the local news agency, Press Trust of India, in an interview published Thursday.
Its shares jumped as much as 10.4%, the most since March 24, while trade volume surged. State run general insurers New India Assurance Co. and General Insurance Corporation of India also registered gains. The brighter outlook for the sector underscores the potential for insurers as the Indian economy grows faster than most major peers.
“Premium growth in the first half of the year wasn’t very good. The expectation is that going ahead they will grow in double-digit and gain back some market share” Mohit Mangal, an analyst at BoB Capital Markets Ltd., said by phone on Friday.
LIC Rallies More Than 10% on Premium Growth Optimism
For the last financial year that ended March, LIC’s income from new business premium grew 6.9%. In this first half of this fiscal year the growth was less than 3%.
The comments from LIC chairman come after the Reserve Bank of India last week imposed curbs on unsecured lending by banks and shadow lenders to stem the relentless rise in risky consumer loans, sending shares lower.
Shares of non-lending firms such as insurers and asset managers are safer spots than banks, Jefferies said in a report on Thursday, after India’s central bank warned banks to undertake stress tests and avoid “exuberance.”
“Some hot money could be moving out of lenders to insurers after these actions,” said Kranthi Bathini, director of equity strategy at WealthMills Securities Pvt.
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