It also said that asset quality trends remain weak given the stress mainly from developer financing portfolios and some pockets of stress even in vehicle financing for select players.
"Money supply for the sector witnessed some improvement with NBFCs continuing to diversify their borrowing sources toward banks, international and retail markets instead of the traditional capital markets, while the securitisation market too is opening up," it said.
The Emkay report further said that withdrawal of '80C benefits' under new tax regime would be less disruptive.
"We believe private insurance players are unlikely to see any significant shift in premium growth due to the recent announcements made in the Union Budget 2020 (tax savings sale dropping under the new tax regime), given a diversified product suite and evolving distribution ecosystem," it said.
However, it added that the removal of dividend distribution tax (DDT) may have negative, but limited impact on insurance companies to the extent of 1-2 per cent on the value of the companies and 10-12 basis points on VNB (value of new business) margins.