*SECTOR UPDATE* *Insurance** *
*Slowdown persists* - The growth in the annual premium equivalent (APE) of the life insurance industry declined for the eleventh consecutive month in May 2013 as it declined by 23.6% year on year (YoY). This was largely contributed by the Life Insurance Corporation of India (LIC), which showed a decline of 32.0% YoY in the APE. On the other hand, the private players reported a decline of 7.2% YoY in May, with Aviva Life (down 42.5% YoY), HDFC Life (down 38.1% YoY) and Birla Sun Life (down 31.2% YoY) posting the steepest decline in the APE. However, Reliance Life Insurance (Reliance Life; up 165.5% YoY) and Kotak Life Insurance Company (Kotak Life; up 138.1% YoY) posted a significant increase in the APE on a year-on-year (Y-o-Y) basis. - On a year-to-date (YTD) basis (April 2013-May 2013), the private players fared relatively better as their APE declined by mere 4.1% YoY as compared with a 28.9% Y-o-Y decline by the LIC and a 21.1% Y-o-Y decline by the industry. The growth (April 2013-May 2013) in the APE of the private players was mainly led by players like Kotak Life (up 100.9% YoY) and Reliance Life (up 88.8% YoY). Max Life Insurance (Max Life) also reported a healthy growth of 15.6% YoY in its APE. - On a month-on-month (M-o-M) basis, the APE for industry grew by 28.5% with the private players and LIC showing a growth of 51.9% and 16.1% respectively. On an M-o-M basis, mere eight out of the 24 players posted a decline in their APE. Companies like Tata AIA Life Insurance Company (Tata AIA), MetLife and Max Life reported a decline of 15.6%, 10.4% and 8.3% respectively in their APE. - The market share of the private players in May 2013 improved by ~725 basis points to 41.0% (LIC, 59.0%) compared with 33.8% in May 2012. During the period under review, the companies like Reliance Life, Kotak Life and Max Life turned out to be major gainers as their market share improved by ~440, 190 and 85 basis points respectively. *Outlook* Slowdown persists in the sector and it's been almost a year since the sector has seen a positive growth (Y-o-Y basis). Compared with a growth expectation of about 10% at the beginning of the fiscal, we now expect the premium growth to be flattish in FY2014. The IRDA is likely to come up with guidelines on bankassurance over the next couple of months, which could help the sector. Besides that, the transition towards the newer regulations (proposed for traditional products) will continue to impact the premium growth. ------------------------------ Click here to read report: *Investor's Eye*<http://email360api.com/email360/link.php?M=920349945&N=101795&A=101795&L=3995&F=H> -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/globalspeculators. For more options, visit https://groups.google.com/groups/opt_out.
