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Insurance
India
Subdued month; awaiting the peak season. Private insurance companies reported
a sharp 38% yoy decline in APE during November 2010. Large players were down
40-50%. We understand that most companies have been consolidating operations,
training distributors and testing new policies in October and November 2010.
We expect trends to pick up in the next four months which typically account for about
50% of the annual business.
Almost all large players report decline
` Private insurance companies reported a 38% yoy decline in APE during November 2010—a
trend similar to October 2010 (40% yoy decline), LIC reported 2% yoy growth (1% yoy growth
in October), thereby cushioning the industry-wide APE decline to 19%.
` On YTD basis, private players are flat while LIC is up 14% yoy. We believe growth trends will
improve hereon as distributors get familiar with new products though large base may provide a
challenge. Buoyancy in equity markets will likely support business over the next four months.
` Most large players (Bajaj Allianz, Birla AL, ICICI Prudential Life, Reliance Life, Metlife and SBI Life)
reported about 40-50% decline in APE. Max Newyork Life is up 8%—the only positive trend in
large players; HDFC SL reported marginal decline of 5%.
` About 50% the annual business is booked in the past four months. The current run-rate
indicates that our FY2011E APE estimates of HDFC SL and Max NY will likely have some upside
while estimates for Bajaj Allianz, SBI Life and Reliance Life have some downside risk.
` Private players have been focusing on group business for the past two months. LIC’s market
share in this segment declined to 78% from about 90% in September 2010. On an mom basis,
Bajaj Allianz gained some share from SBI Life in this segment.
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