Niva Bupa is likely to be a beneficiary of the structural growth story of India’s under-penetrated health insurance market given its customer-centric focus, tech-based capabilities and historical growth track record. It has showcased strong CAGR of ~40% in GWP between FY20 and FY25 leading to improvement in its retail market share from 4% in FY19 to 9.1% in FY24 and 9.4% in 11MFY25. Loss ratio remains good at average of ~58% in last six years (FY19-24).
Niva Bupa has been able to deliver standout growth in health insurance premiums (~40% CAGR between FY20-25) while its improved scale and assets under management should help improve margins and earnings growth ahead (expect IFRS PAT CAGR of 53% over FY25-27E). The relative high growth could continue driven by diversified channel which in turn creates positive flywheel on loss ratios, especially when players across industry including Niva have taken multiple price hikes. In this report, we have detailed the key tenets of earnings trajectory under accounting methods of IGAAP (without and with 1/n) and IFRS which should help appreciate the impact of long-term business mix and deferment of acquisition costs in the quest of realising the normalised annualised earnings.