FY26’s Top Life Insurance Stock Picks? Nuvama’s Surprising Bet Revealed
Nuvama’s Bullish FY26 Outlook on Life Insurance Stocks
Life Insurance Stock Picks: Brokerage firm Nuvama has maintained a positive outlook on India’s life and general insurance sector for FY26, even as the industry navigates mixed headwinds. Its latest report highlights key growth trends, margin expectations, and the top insurance stock picks across life, general, and insurance intermediary categories.
Life Insurance: Margins to Stabilise, Traditional Segments in Focus
Nuvama expects the life insurance industry to post modest growth in FY26. Here’s a quick snapshot:
- APE (Annualised Premium Equivalent) growth for Q1FY26 is forecast at 5.9% YoY, impacted by high base effect in linked products and sluggish credit life sales.
- Despite that, Value of New Business (VNB) margins are expected to remain stable at 22.3%, slightly up by 28 basis points YoY.
- Growth will likely shift from market-linked products to traditional and protection plans, which remain in demand amid market volatility.
“Investors should closely track product mix guidance and margin commentary in the upcoming quarters,” Nuvama advised.
General Insurance: ICICI Lombard, Star Health Stand Out
The general insurance segment reported 9.1% YoY growth in Q1FY26, while standalone health insurers clocked 10.5%. However, Nuvama cautions about elevated Combined Ratios (CoRs) and increasing loss ratios in key verticals.
Still, it remains bullish on major players:
- ICICI Lombard: Target price raised to ₹2,300 (from ₹2,100), based on FY27E P/E of 36x.
- Star Health: New target price of ₹500 (up from ₹450), based on FY27E P/E of 25x.
Investors are advised to keep an eye on commission payouts, Expense of Management (EoM) norms, and the impact of industry competition.
Insurance Intermediaries: PB Fintech Leads Growth
Insurance platforms and intermediaries are also showing strong momentum.
- PB Fintech (Policybazaar): Expected to post 30%+ YoY growth in health and term insurance verticals. Margins are likely to improve, with adjusted EBITDA growth projected at 79.9% YoY.
- Medi Assist: While international segments may see weaker performance, domestic business remains strong. Margins are expected to stay stable despite some one-time costs.
Nuvama’s Top FY26 Insurance Stock Picks
Life Insurance Picks:
- HDFC Life – Target Price: ₹920
- Max Financial Services – Target Price: ₹1,810
General Insurance Picks:
- ICICI Lombard General Insurance – Target Price: ₹2,300
- Star Health – Target Price: ₹500
Insurance Intermediaries:
- PB Fintech – 30%+ YoY platform premium growth
- Medi Assist – Resilient core operations
Final Takeaway
Despite market fluctuations and margin pressures, Nuvama believes the insurance sector is poised for solid performance in FY26. From life and general insurers to digital intermediaries, there are multiple investment opportunities for smart investors watching the space.
If you’re building a long-term portfolio in the financial or insurance sector, these life insurance stock picks deserve your attention.
Also Read: Pramerica Life Insurance Sets New Standard with 99.18% Claim Settlement Rate
