What will drive Canara HSBC Life grow 20% in premiums by 2028?

India’s recent GST exemptions and a narrowing protection gap support this growth.

Canara HSBC Life Insurance is projected to register a compound annual growth rate (CAGR) of 20% in annualised premium equivalent (APE) and 23% in value of new business (VNB) for the period of FY 2025 to FY 2028, according to the Morning India report.

This outlook led to an initial buy rating with a target price of 180 INR. 

The insurer has historically outperformed the private segment with an APE CAGR of 22% between FY 2015 and FY 2025.

Industry tailwinds such as GST exemptions and a narrowing protection gap support this growth. 

India currently has a protection gap of 83%, the highest amongst its peers, whilst life insurance penetration stands at 2.8% compared to the global average of 2.9%. 

Proposed regulatory shifts toward risk-based solvency and composite licenses are expected to further stimulate market traction.

Canara HSBC Life currently reaches only 1.7% of Canara Bank’s customer base. 

As the bank invests in digital tools for customer segmentation, there is significant room for expansion beyond its 72.5% contribution to the insurer's individual APE. 

HSBC also remains a key partner, contributing 13% of individual APE with a focus on high-value retail clients.

Value of new business margins are expected to increase by 50 basis points annually over the next two years. 

This margin expansion will likely be driven by a more favorable product mix and scale benefits, even as the company invests in its agency channels. 

Operating return on embedded value is projected to remain above 17% through the forecast period.