Demise of competitors to buoy insurance firms-JO Hambro

By Natsuko Waki

LONDON (Reuters) - Some insurance, leisure and financial sector stocks are poised to benefit from the demise of competitors that would pave the way for them to boost market share, JO Hambro Capital Management said on Thursday.

The UK-based boutique fund said UK insurance firms could gain more business after U.S. giant AIG (AIG.N), which had up to a quarter of the U.S. casualty insurance market, nearly collapsed and had to be bailout out by the government.

The September collapse of Britain's third largest package holiday operator XL Leisure Group, which had seven percent of market share, could also lead to outperformance by TUI Travel (TT.L).

"The crunch is leading to massive supply side shifts. There are huge opportunities to grow market share as loads of competitors are going bust," JO Hambro's senior fund manager Clive Beagles said.

The fund, which is overweight on the life insurance and non-life insurance sector relative to benchmark by 2.8 percent and 7.8 percent respectively, likes insurance firms such as Hiscox (HSX.L), Aviva (AV.L) and Royal & Sun Alliance (RSA.L).

"I'm not trying to think outside the box. We are thinking about how they will benefit from the events of the past year or so," he said.

JO Hambro is 2 percent overweight on the banking sector relative to the benchmark, favouring firms such as Lloyds TSB (LLOY.L) and Barclays (BARC.L).

Given falling energy and commodity prices, the fund is underweight on oil and resource firms such as Royal Dutch Shell (RDSa.L) and Rio Tinto (RIO.L).

(Editing by Stephen Nisbet)