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ICICI Direct Report
In Q1 FY21, unlocking of the economy and improvement in repayment trend amid reducing moratorium book remained positive for the banking sector.
Prudent restructuring norms announced by the Reserve Bank of India with inclusion of retail loans added strength to effort in faster economic revival.
However, uncertainty looming around the extent of moratorium and anticipation of elevated credit cost keeping earnings muted acted as deterrents.
Post de-growth in initial months amid pandemic, life insurance has seen healthy revival with new business accretion at approximately 12% YoY in August 2020.
Such revival is due to robust traction in group single premium across players. Higher awareness amid Covid-19 bodes well for term-insurance demand, offsetting credit life business slowdown.
Low interest rates lead to some volatility in guaranteed products. With premium accretion seen continuing to improve in H2 FY21E, we expect premium at 8-10% YoY in FY21E.
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