JPMorgan expects life insurance companies to deliver stronger-than-anticipated growth in the second half of 2025 (2H25), as they appear well-prepared to handle the challenges posed by new surrender value regulations. The firm highlights several factors supporting this outlook:
- Product competition remains benign: The impact of new surrender regulations on product benefits appears minimal, with little to no significant increase in benefits for customers.
- Commission redesign offsets surrender value impact: Life insurers have restructured commissions to distribution channels, which helps mitigate the effect of the surrender value increase.
- ULIP volumes remain steady: While unit-linked insurance plan (ULIP) volumes are strong, JPMorgan expects growth to moderate for some players like HDFC Life and SBI Life due to a high base from the previous year.
- Strong protection growth: Life insurers have expressed confidence in protection product growth, which should drive margin improvement in the second half compared to the first half of 2025.
JPMorgan’s pecking order for life insurers remains: IPRU Life, SBI Life, HDFC Life, and LIC, in that order, as it sees varying levels of growth potential across these companies.
