PB Fintech seen as a key beneficiary of insurance sector shifts, says analyst

PB Fintech is well-positioned to benefit from multiple evolving trends within the Indian insurance space, making it a preferred play in the fintech sector, according to Suresh Ganapathy, Managing Director & Head of Financial Services Research at Macquarie Capital.

While Macquarie Capital maintains a neutral stance on PB Fintech, Ganapathy highlighted several reasons for his positive view. He believes that as more companies enter the insurance market, business will increasingly flow through aggregator platforms like PB Fintech.

Additionally, he sees the company as a direct beneficiary of potential regulatory action curbing the sale of insurance products by banks. “If the bancassurance thing goes through then obviously there will be a greater degree of dependence or sales happening through the PB Fintech channel,” he stated.

Over the medium term, Ganapathy also expects the company to gain from a demand boost in both life and general insurance spurred by recent goods and services tax (GST) cuts.

Finally, he pointed to the proposed composite licensing regime in the Insurance Amendment Act as another tailwind that should benefit a broker like PB Fintech more than other distribution channels. “PB Fintech is a better play in my opinion,” he concluded, summarising the confluence of positive factors.

Composite licensing means giving one insurance company a single license to sell different types of insurance—like life, health, and general insurance—instead of needing separate licenses for each.

In the life insurance sector, valuation and potential regulatory shifts are key factors favouring Life Insurance Corporation of India (LIC) over private peers like HDFC Life, according to Ganapathy.

He maintains an ‘outperform’ rating on LIC while giving HDFC Life an ‘underperform’ rating, despite the latter’s higher earnings growth projections.

The core of his argument is the valuation discrepancy.  Ganapathy pointed out that while the market is paying a high multiple for HDFC Life’s value of new business (VNB), LIC offers a compelling case on valuation. “The VNB multiple for LIC is negative because it trades below EV (embedded value),” he explained.

Another significant factor is the anticipated regulation from the Reserve Bank of India (RBI) concerning the mis-selling of third-party products by banks. Ganapathy believes these rules, when implemented, will negatively affect insurers with a high dependence on bancassurance channels. “LIC has the least dependence on bancassurance. There also LIC benefits,” he noted.

Overall, Ganapathy expects a “relatively modest year” for the life insurance space in fiscal year 2026, citing a challenging first half due to base effects. In this environment, his preference is for low-valuation companies like LIC.

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