Investec ranks ICICI Pru, Max Life among top insurance picks

Investec Securities has rated ICICI Prudential Life Insurance Company as its top pick in the life insurance space as it ranks highly on most metrics. Max Life is also a top pick for Investec in this space.

“ICICI Prudential ranks highly on most metrics..it’s the most cost-efficient, and a market leader in retail protection and ULIP, with the best persistency, least balance sheet risk, most conservative EV (embedded value) assumptions, industry-leading digital infrastructure and strong return ratios,” said Investec, retaining buy rating with a target price of Rs 500.

The brokerage is bullish on Max Life with a buy rating and target price of Rs 620 as it believes that Max has been a steady performer with a diversified product mix and highest return ratios due to a scaled par business. “Though it ranks lower than ICICI Prudential and HDFC Life on key metrics, nevertheless, its management has executed well,” said Investec.


The brokerage said Axis Bank is a key bancassurance partner and the sustainability of this tie-up is a significant uncertainty. “Management aims to simplify the holding structure by swapping Mitsui Sumitomo’s stake from Max Life to holding company. This, we believe, is a precursor to a long term deal with Axis Bank. If it fructifies, this should create value given extremely cheap valuations.”

The brokerage has a hold rating on HDFC Life with a target price of Rs 590. Investec has a hold rating and target price of Rs 940 on SBI Life with a target price of Rs 940.

Investec said ICICI ranks highest in terms of quantitative metrics such as cost, persistency and risks, but lower on product mix. HDFC Life ranks highest on management quality as is visible from its ability to identify new segments ahead of peers, product mix and distribution, it said.

SBI Life has benefited from tailwinds due to SBI’s distribution strength, which is likely to taper down over the next three years, said Investec. Max Financial looks attractively priced and a collaboration with Axis Bank is expected, said Investec.