Insurance Stocks to Buy, Insurance Stocks: The domestic life insurance industry witnessed subdued performance in August 2025, with both private players
and the state-run Life Insurance Corporation of India (LIC) showing muted growth. The question now is whether investors should consider sector stocks such as HDFC Life, ICICI Prudential, and others. Brokerages' analysts, in their latest reports, highlighted weak new business momentum but maintained positive outlooks on select private insurers.
How the industry performed earlier
According to brokerage Motilal Oswal Securities Limited (MOSL), industry annualised premium equivalent (APE) remained flat year-on-year (YoY) in August 2025, with private players recording just 1 per cent YoY growth—a sharp slowdown from 14 per cent in July.PSU LIC reported a 5 per cent YoY decline in APE during the month.
Moreover, new business premium (NBP) for the industry fell 5 per cent YoY in August. LIC’s NBP dropped 17 per cent, while private players managed a 12 per cent YoY rise.
Private insurers’ NBP rises up to 56%
Here is how major private insurance firms’ NBP performed:- HDFC Life’s NBP grew 23 per cent
- SBI Life rose 10 per cent
- ICICI Prudential Life’s increased 18 per cent
- Max Life climbed 20 per cent
- Bajaj Allianz Life (BALIC) surged 56 per cent
Private insurers post mixed WRP growth
Additionally, Max Life and HDFC Life posted the fastest weighted received premium (WRP) growth at 16 per cent YoY and 1 per cent, respectively. In contrast, SBI Life, ICICI Prudential Life, and BALIC reported WRP declines of 4, 13 and 6 per cent, respectively.Why did the insurance industry’s demand decline?
MOSL's analysts noted that demand in August was impacted by the recent GST exemption announcement, which led customers to postpone purchases. However, they expect recovery from the second half of FY26, supported by traditional products and affordability.MOSL highlighted HDFC Life and SBI Life as its preferred picks in the sector.
Meanwhile, Nuvama echoed the cautious near-term outlook, pointing to flat private insurers’ individual APE growth at 1.3 per cent YoY in August and LIC’s 5.1 per cent YoY decline. The brokerage noted that demand slowed as buyers awaited clarity on the GST rate cut.
However, for the April–August period (FY26TD), private insurers’ individual APE market share rose to 70.4 per cent, an improvement of 216 basis points YoY.
Among players, Aditya Birla Sun Life (AMLI) gained 85 bps market share, while HDFC Life added 74 bps.
GST exemption will support long-term demand, but insurers must rework pricing and absorb the margin impact from the ITC loss, according to Nuvama. "Margins remain under pressure, though SBI Life is expected to be the least affected," it said.
Analysts pick SBI Life, HDFC Life, ICICI Pru, others; check out targets
Analysts at Nuvama remain selective on insurance counters after the sector’s muted August performance, with top picks including SBI Life, HDFC Life, ICICI Prudential and Max Financial, while Bajaj Finserv is seen as a hold.HDFC Life Share Price Target
Nuvama has recommended buying HDFC Life shares for a target of Rs 920, suggesting a return of 20.90 per cent from Tuesday’s closing.SBI Life Share Price Target
The brokerage has a 'buy' stance on SBI Life shares with a target of Rs 2,250. According to the given target, the stock could rise up to 24.58 per cent from Tuesday’s closing.
ICICI Prudential Share Price Target
Nuvama has a 'buy' rating on ICICI Prudential Life shares with a target of Rs 770, implying an almost 30 per cent gain from Tuesday’s closing.
Max Financial Services Share Price Target
The brokerage is bullish on Max Financial shares with a target of Rs 1,870, indicating around 20 per cent returns in the near term.Should you buy Bajaj Finserv shares now?
For Bajaj Finserv stock, the brokerage has a 'hold' stance with a slightly positive target of Rs 2,190, which indicates around 8 per cent upside from Tuesday’s closing.(Disclaimer: The above article is meant for informational purposes only, and should not be considered as investment advice. ET NOW DIGITAL suggests its readers/audience consult their financial advisors before making any money-related decisions.)
