First year premium collection of life insurers surge 76.5% in April-June 2010

LIC's market share jumps to 73.4% during April-June 2010 from 62.4% in April-June 2009 

The first year premium collection of the life insurance sector doubled to Rs 11556.14 crore in June 2010 compared to Rs 5802.3 crore collections in June 2010. During Quarter June 2010, the premium collection surged 76.5% to Rs 25522.2 crore as against Rs 14456.3 crore in the corresponding period previous year. The sector has recorded robust growth above 60% for fourth sequential month. 

The growth of the premium collection in the life insurance segment was largely driven by Life Insurance Corporation of India, who recorded sharp 135.7% increase in premium collection to Rs 8657.6 crore in June 2010, while its premium collection more than doubled to Rs 18740.4 crore in April-June 2010 compared to Rs 9028.7 crore in the same period last financial year.

With the strong growth in premium income, LIC has boosted its market share in terms of new premium collection to 73.4% during April-June 2010 compared to 62.4% in April-June 2009.

The new premium collection of 22 private life insurers together increased 36.2% to Rs 2898.57 crore in June 2010, compared to 25.2% drop recorded in June 2009. Their premium collection rose 24.9% to Rs 6781.8 crore in April-June 2010 compared to 20.1% fall in April-June 2009. The private players had recorded fall in premium collection for six sequential months from April 2009 to September 2009. 

Among the private players, the first year premium of ICICI Prudential nearly doubled to Rs 643.1 crore, while that of HDFC standard surged 77.5% to Rs 317.3 crore in June 2010. The premium income of SBI Life and Reliance Life increased 20.6% to Rs 348.4 crore and 17.6% to Rs 287.4 crore, respectively in June 2010. But, the Bajaj Allianz Life witnessed 3.2% drop in premium income to Rs 229.1 crore in June 2010. These top five private players accounts for more than 60% of the private life insurer's premium collection. 

The new premium income of Birla SunLife increased 14.2% to Rs 225.9 crore, while Max New York and Tata AIG recorded a healthy growth in premium income at 19.9% to Rs 188.2 crore and 26.4% to Rs 98.7 crore in June 2010. The first premium income of Kotak Mahindra Old Mutual life and Canara HSBC OBC Life surged 66.4% to Rs 110.1 crore and 39.8% to Rs 63.4 crore, respectively. 

Aviva Life recorded 16.6% increase in new premium income to Rs 64.3 crore, but MetLife and IDBI Fortis witnessed 42.2% and 8.1% drop in premium income to Rs 43.8 crore and Rs 26.3 crore, respectively during June 2010. New premium income of ING Vysya increased 10.6% to Rs 53.7 crore, while that of Future Generali rose mere 4.0% to Rs 28.4 crore in June 2010.

Private players like Star Union Dai-ichi Life, Shriram Life, Aegon Religare, and DLF Pramerica Life have recorded a multi-fold increase in new premium collection at 187.2% to Rs 35.8 crore, 102.3% to Rs 43.4 crore, 216.1% Rs 14.9 crore and 176.8% to Rs 6.0 crore, respectively in June 2010. IndiaFirst Life, the youngest life insurer that started operations in November 2009, recorded a fresh premium income of Rs 25.9 crore in June 2010. 

The private players have lost the market share to LIC from 37.55% in April-June 2009 to 26.57% in April-June 2010. The premium collection of ICICI Prudential and HDFC Standard Life surged 74% each in April-June 2010, while maintaining the market share at 5.51% and 2.81%. But, the SBI Life exhibited 9% fall in premium income, while its market share halved to 3.83%. Reliance Life and Tata AIG recorded 19.8% and 18.0% increase in premium collection during April-June 2010, but the market share eased to 2.37% and 0.91%, respectively. Further Bajaj Allianz, Birla Sunlife and Max New York witnessed growth of 4.3%, 7.6% and 5.9%, respectively, but still recorded more than 100 bps fall in market share to 1.98%, 1.95% and 1.63% respectively. Out of 22 private players, about 17 players witnessed fall in market share, while only five newer players exhibited slight improvement in market shares. 

Life insurers sold 91.64 lakh policies in April-June 2010

 

Life insurers have sold 91.94 lakh policies in April-June 2010 compared to 84.55 lakh in same period last year. Meanwhile, the number of life covered more than doubled to 187.37 lakh compared to 89.90 lakh in April-June 2009. LIC sold 66.217 lakh policies, while covered 57.45 lives in April-June 2010. All private players together sold 25.420 lakh policies and covered 129.922 lakh lives during. Among the private players, Reliance Life sold the highest number of policies at 4.94 lakh polices, followed by Birla Sunlife and Bajaj Allianz with 3.628 lakh and 3.493 lakh policies. ICICI Prudential and Max New York sold 3.353 lakh and 2.046 lakh policies, respectively, in April-June 2010. During June 2010, Life insurers sold 37.053 lakh policies, while covered 79.609 lives, representing growth of 1.4% and 119.0%, respectively.

Weekly Scenario: Most of the Equity Fund Categories Witness Loss

Indian equity markets were unable to sustain the previous week bull run rally leading Sensex and Nifty to decline 1.45% and 1.50% respectively over week ended 30 July 2010. Markets plummet as RBI increased interest rates to control inflation. It happened to be the derivatives expiry week and mixed corporate results had lead to the fall of equity markets during the week. 

RBI had hikes repo rate by 25 bps to 5.75% and reverse repo rate by 50 bps to 4.50%, on 27 July 2010 to rein in demand pressures and moderate inflation. Moreover it revised the projection of real GDP growth for 2010-11 to 8.5%, up from 8.0% with an upside bias in the April 2010 policy statement taking into account better industry, services growth and reflects progress of monsoon so far. Also it raised the projection for WPI inflation for March 2011 to 6.0% from 5.5% in the April policy statement. 

Growth in India's key infrastructure industries decelerated to an 11-month low of 3.4% in June, mainly on account of near flat coal output. 

The fall in the market was felt in the equity schemes as well, as most of the equity fund categories ended as losers. In the major equity fund categories Index Funds declined the most by 1.40%, Equity Diversified Funds declined 0.60% and Tax Savings Funds slipped 0.55% during the one week period 30 July 2010. 

FMCG Funds gained 1.09% and Banking Funds surged 0.89% in the sector funds. On the other hand Infotech Funds and Pharma Funds fell 0.66% and 1.63% respectively. 

Among the sub categories in debt fund, Floating Rate Income Funds – Short Term, Liquid Funds, Ultra Short Term Funds gained 0.10% each, Floating Rate Income Funds – Long Term climbed 0.07%. While Short Term Income Funds declined 0.01%, Income Funds fell 0.09%, Gilt – Short Term slipped 0.24% and Gilt – Medium & Long Term declined 0.28%. In the ETF category, Other ETF's fell 0.56%, while Gold ETF's declined 2.83%. 

Equity Diversified Funds

 

NAV of the Equity Diversified Funds category declined 0.60% in the week ended 30 July 2010. Among the schemes in the equity diversified category, IDFC Premier Equity Fund – Plan A gained the maximum of 1.70%, followed by SBI Magnum SFU – Emerging Business Fund which climbed 1.66%, Taurus Discovery Fund rose 1.45%, DWS Alpha Equity Fund jumped 1.34% among others. JM Basic Fund and Tata Life Science & Technology Fund were the worst performers in this category declining 2.92% and 2.61% respectively. 

Tax Savings Funds 

 

Tax savings Funds category declined 0.55% over one week period as on 30 July 2010 which is lower than the previous week gain of 0.70%. Taurus Tax Shield and DWS Tax Savings Fund were the top performers with a return of 1.34% and 1.28% respectively during one week period. Among the other schemes in the category, Axis Tax Saver Fund rose 0.09%, Birla Sun Life Tax Plan climbed 0.08% and JPMorgan India Tax Advantage Fund surged 0.03%. HSBC Tax Saver Equity Fund and JM Tax Gain Fund ended at the bottom of the table losing 1.42% and 1.31% respectively. 

Index Funds

 

The Index Fund category declined 1.40% over one week period ended 30 July 2010. All the schemes in this category ended the week as losers. LICMF Index Fund – Sensex Advantage Plan and Taurus Nifty Index Fund were the biggest losers in this category. Their NAV fell 1.58% and 1.55% respectively over one week time period. ICICI Pru Nifty Junior Index Fund and Benchmark S&P CNX 500 Fund had minimum loss in this category, declining 0.16% and 1.05% respectively. 

Sector Funds

 

Pharma Funds category declined 1.63%, with SBI Magnum SFU – Pharma Fund ending the week as the top loser with a erosion in NAV by 2.47%, it was followed by UTI-Pharma & Healthcare Fund which declined 1.51%. 

Banking Funds category gained 0.89%, with Reliance Banking Fund gaining 1.53% and Sundaram BNP Paribas Financial Services Opportunities gaining 1.24%. Sahara Banking & Financial Services Fund ended at the bottom of the category declining 0.49%. 

FMCG Funds category gained 1.09% over one week period ended 30 July 2010. All the schemes in this category were able to deliver gains. SBI Magnum SFU – FMCG Fund was the top performer in this category. It's NAV appreciated by 1.60% over one week period. 

Infotech Funds category declined 0.66% over one week period ended 30 July 2010. Birla Sun Life New Millennium Fund ended as the biggest loser declining 1.26%. 

Hybrid Funds

 

Among the sub categories in the hybrid funds, Arbitrage Funds surged 0.16%. Monthly Income Plans declined 0.18%, Debt Oriented Balanced Funds slipped 0.33%, Equity Oriented Balanced Fund dropped 0.45% and Asset Allocation Balanced Fund declined 0.83%. 

HDFC Prudence Fund and Birla Sun Life '95 Fund were the highest gainer in equity oriented balanced fund category as their NAV appreciated by 0.48% and 0.29% respectively. LICMF Balanced Fund was the worst performer in this category declining by 1.30%. 

Escorts Income Bond was the highest gainer in debt oriented balanced fund category as its NAV appreciated by 0.61%. SBI Magnum Children Benefit Plan was the next highest gainer by 0.38%. LICMF Children's Fund was the worst performer in this category declining 1.10% respectively. 

Debt Funds

 

Among the Debt funds, Sundaram BNP Paribas Bond Saver - Appreciation gained 0.64%, Baroda Pioneer Gilt Fund added 0.31%, Baroda Pioneer Income Fund rose 0.28% and ICICI Pru Long Term Floating Rate Plan B, ICICI Pru Long Term Floating Rate Plan C & Birla Sun Life Short Term Opportunities climbed 0.14% each. Escorts Gilt Fund was the worst performer in this category declining 1.07%.

Birla Sun Life MF Announces Dividend for two Schemes

Record date for dividend is 06 August 2010 

Birla Sun Life Mutual Fund has announced the declaration of dividend under dividend option of its Birla Sun Life Advantage Fund and Birla Sun Life Frontline Equity Fund Plan A. The record date for dividend has been fixed as 06 August 2010. 

The quantum of dividend will be Rs 7.00 per unit and Rs 1.25 per unit respectively, on the face value of Rs 10 per unit. The NAV of the funds stood at Rs 93.14 per unit and Rs 22.91 per unit as on 29 July 2010. 

Birla Sun Life Advantage Fund: (An Open ended Growth Scheme) with the objective to achieve long term growth of capital at relatively moderate levels of risk through a diversified research-based investment approach. 

Birla Sun Life Frontline Equity Fund (An Open ended Growth Scheme) with the objective of long-term growth of capital, through a portfolio with a target allocation of 100% equity by aiming at being as diversified across various industries and or sectors as its chosen benchmark index, BSE 200.

Mutual funds offload shares worth Rs 4405 crore in July 2010

Outflow of Rs 173 crore on 30 July 2010 

Mutual funds (MFs) sold shares worth a net Rs 173 crore on Friday, 30 July 2010, much lower than Rs 637.30 crore on Thursday, 29 July 2010. 

The net outflow of Rs 173 crore on 30 July 2010 was a result of gross purchases Rs 701.70 crore and gross sales Rs 874.70 crore. The BSE Sensex fell 123.71 points or 0.69% to 17,868.29 on that day. 

MFs sold shares worth net Rs 4405.30 crore in July 2010. Mutual funds had sold equities worth a net Rs 1093.10 crore in June 2010.

AAUM of 19 Fund Houses Surges by 4.85% in July ‘10

The Average Assets Under Management (AAUM) of nineteen mutual funds surged by 4.85% or Rs 7203.80 crore in July 2010. This after the industry's assets declining sharply by 15.89% or Rs 1.27 lakh crore in June. 

Of the 19 mutual funds which have reported AAUM for the month of July, 14 fund houses witnessed rise in AAUM. 

Shinsei Mutual Fund was the highest gainer as its assets grew by 29.28% (Rs 79.95 crore). With an asset of Rs 273.08 crore in June, it has grown to Rs 353.03 crore in July. It was followed by Baroda Pioneer Mutual Fund which surged by 28.60% (Rs 879.52 crore) and SBI Mutual Fund climbed by 14.17% (Rs 4779.39 crore) among others. 

Canara Robeco Mutual Fund's assets fell 8.63% (Rs 736.62), followed by L&T Mutual Fund which fell 8.31% (Rs 307.07 crore) among others. 

Motilal Oswal Mutual Fund which is a new entrant into the industry stood with an AAUM of Rs 33.21 crore in July.