Fundamental Analysis and Its Impact On Insurance Sector

A Study On Fundamental Analysis And Its Impact On Insurance Sector
EXECUTIVE SUMMARY
Insurance sector in India is one of the booming sectors of the

economy and is growing at the rate of 15-20 per cent annum. Together
with banking services, it contributes to about 7.8 per cent to the country's
GDP. Insurance is a federal subject in India and Insurance industry in
India is governed by Insurance Act, 1938, the Life Insurance Corporation
Act, 1956 and General Insurance Business (Nationalization) Act, 1972,
Insurance Regulatory and Development Authority (IRDA) Act, 1999 and
other related Acts.
The total life insurance premium in India is projected to grow Rs

1,230,000 Crore by 2010-11.Total non-life insurance premium is
expected to increase at a CAGR of 25% for the period spanning from
2008-09 to 2010-11.Home insurance segment is set to achieve a 100%
growth as financial institutions have made home insurance obligatory for
housing loan approvals. Health insurance is poised to become the
second largest business for non-life insurers after motor insurance in next
three years. A booming life insurance market has propelled the Indian life
insurance agents into the 'top 10 country list' in terms of membership to
the Million Dollar Round Table (MDRT) - an exclusive club for the highest
performing life insurance agent.
This study focuses on fundamental analysis and it will help me to

follow insurance market closely. Fundamental analysis is the process of
looking at a business at the basic or fundamental financial level. This type
of analysis examines the key ratios of business like EPS, Debt-equity,
interest coverage etc., to determine its financial health.
1
THE OXFORD COLLEGE OF BUSINESS MANAGEMENT
The major objectives of the study were to find out the factors affecting
insurance industry and to study the performance of various insurance
companies. Another major objective was to study the movement of stock
prices of insurance companies with respect to present economic and
government polices.
The major findings of the study that emerged after studying the
insurance sector for selecting appropriate company through analyzing
economy, industry and companies are the global economies are getting
interrelated; the Indian market will no longer be limited to domestic
economic situation. Agricultural growth rate and the monsoon both have
direct influence on insurance and is responsible for the economy to
become prosperous. Health insurance is poised to become the second
largest business for non-life insurers after motor insurance in next three
years.
Finally, the conclusion drawn was that fundamental analysis always

holds good only if the company statement are revealed clearly and
analyzed properly. Investment is serious business and not making
decision on vague and fundamental analysis has a direct impact on
insurance market and my important suggestions are that Insurance
companies have lot of opportunities to grow. So investing in these types
of industries help the investors in the long run and before investing in any
company, it’s required to implement all the data and financial results.
2
CHAPTER-1
INTRODUCTION
3
INTRODUCTION
Insurance is defined as the contract between Insurance co.

(Insurer) and the customer (Insured). In this legal contract, the insurer
agrees to indemnify (compensate) the insured in lieu of payment of
premium, for any financial loss due to risks covered in the Policy.
Insurance sector in India is one of the booming sectors of the

economy and is growing at the rate of 15-20 per cent per annum.
Together with banking services, it contributes to about 7 per cent to the
country's GDP. Insurance is a federal subject in India and Insurance
industry in India is governed by Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and General Insurance Business (Nationalization)
Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act,
1999 and other related Acts.
The origin of life insurance in India can be traced back to 1818

with the establishment of the Oriental Life Insurance Company in
Calcutta. It was conceived as a means to provide for English Widows. In
those days a higher premium was charged for Indian lives than the non-
Indian lives as Indian lives were considered riskier for coverage. The
Bombay Mutual Life Insurance Society that started its business in 1870
was the first company to charge same premium for both Indian and non-
Indian lives. In 1912, insurance regulation formally began with the
passing of Life Insurance Companies Act and the Provident Fund Act.
By 1938, there were 176 insurance companies in India. But a

number of frauds during 1920s and 1930s tainted the image of insurance
industry in India. In 1938, the first comprehensive legislation regarding
insurance was introduced with the passing of Insurance Act of 1938 that
4
provided strict State Control over insurance business.
Insurance sector in India grew at a faster pace after independence.

In 1956, Government of India brought together 245 Indian and foreign
insurers and provident societies under one nationalized monopoly
corporation and formed Life Insurance Corporation (LIC) by an Act of
Parliament, viz. LIC Act, 1956, with a capital contribution of Rs.5 crore.
The (non-life) insurance business/general insurance remained with

the private sector till 1972. There were 107 private companies involved in
the business of general operations and their operations were restricted to
organized trade and industry in large cities.
The General Insurance Business (Nationalizations) Act, 1972

nationalized the general insurance business in India with effect from
January 1, 1973. The 107 private insurance companies were
amalgamated and grouped into four companies: National Insurance
Company, New India Assurance Company, Oriental Insurance Company
and United India Insurance Company. These were subsidiaries of the
General Insurance Company (GIC).
In 1993, the first step towards insurance sector reforms was

initiated with the formation of Malhotra Committee, headed by former
Finance Secretary and RBI Governor R.N. Malhotra. The committee was
formed to evaluate the Indian insurance industry and recommend its
future direction with the objective of complementing the reforms initiated
in the financial sector.
Since 1956, with the nationalization of insurance industry, the

state-run Life Insurance Corporation of India (LIC) has held the monopoly
in that country's life insurance sector. General Insurance Corporation of
India (GIC), with its four subsidiaries, was its counterpart in the general
insurance sector. In 1999, the government passed the IRDA Bill to open
up the insurance sector in India.
5
In the last years, the country saw a large number of Indian and
foreign players rushing to enter this lucrative and untapped insurance
market of India. The Indian Insurance sector is thus at the beginning of a
new era. It has been only a year since the new players became active
and it is difficult to say whether the reforms were successful. But it is
believed that the country has a vast untapped potential and the new
players will surely use this to their best advantage.
The insurance sector in India has completed all the facets of
competition –from being an open competitive market to being
nationalized and then getting back to the form of a liberalized market
once again. The history of the insurance sector in India reveals that it has
witnessed complete dynamism for the past two centuries approximately.
INTRODUCTION OF FUNDAMENTAL ANALYSIS
Fundamental analysis is an important part of learning to

understand the markets. In the short run, the results are not always
straightforward, they can even seem backwards. In the long run,
currencies will always move along with fundamentals. Learning to use
fundamental analysis will help you to understand the reasons behind
trends and give you insight into currency movements.
There are different cycles and causing for movements in the economy
such as “Boom, Depression, Recession” etc., the performance of the
economy depends basically on the monsoon and the growth rate of
agriculture. The most important factor is the “Fiscal Policy”, which
incorporates government expenditure, taxation, borrowing, deficit
financing and which influences both public and private sector in the
economy. The industrial growth in general and of infrastructural industries
in particular influences the corporate performance.
6
A method of evaluating a security by attempting to measure

its intrinsic value by examining related economic, financial and other
qualitative and quantitative factors. Fundamental analysts attempt to
study everything that can affect the security's value, including
macroeconomic factors (like the overall economy and industry
conditions) and individually specific factors (like the financial
condition and management of companies).we can do fundamental
analysis in 3 steps,
1. Economic Analysis
2. Industry Analysis
3. Company Analysis
ECONOMIC ANALYSIS
Economic analysis is a process whereby strengths and

weaknesses of an economy are analyzed. Economic analysis is
important in order to understand exact condition of an economy. It can
7
cover a number of important economic issues that keep cropping up

within a particular economy, which is being analyzed. Many countries of
world are plagued by a rising rate of inflation. Economic analysis helps in
providing an explanation of why inflation has taken place. It also suggests
ways in which rate of inflation could be brought down, so that economic
development could continue.
The Indian economy is one of the fastest growing economies in

the world. The economic survey has projected for the year 2010-11 our
growth rate would be 8.5 percent plus, minus 0.25 percent. The study
highlights some of the major economic factors that influence corporate
earnings and hence insurance industry in Indian context.
Ultimately, investor must make intelligent judgment about the current

state of the market and possible changes in the future. A logical starting
point in assessing the market is to understand the economic factor that
determines the stock price. Understanding the current and future state of
the economy is the first step in understanding what is happening and
what is likely to happen to the market.
Economic policies: This is the major variable affecting the stock

market, especially in the context of the highly regulated environment like
India. While some policies affect specific industries, some have general
positive or negative impact on the entire market the recent moves
towards economic liberalization have noticeably affect the market
sentiments. Changes in credit policies announced by Reserve Bank of
India are seen to affect corporate performance.
Fiscal policies: Measures employed by governments to stabilize

the economy, specifically by adjusting the levels and allocations of taxes
and government expenditures. Preparation of national budget is a major
event in the insurance market. While changes in tax structure introduce in
the budget may affect specific industries, companies some provision
8
affect the entire corporate sector.
INDUSTRY ANALYSIS
A market assessment tool designed to provide a business with an

idea of the complexity of a particular industry. Industry analysis involves
reviewing the economic, political and market factors that influence the
way the industry develops. Major factors can include the power wielded
by suppliers and buyers, the condition of competitors, and the likelihood
of new market entrants.
The porter’s five-force model will help the industry analysis. Five
Forces Analysis assumes that there are five important forces that
determine competitive power in a situation. These are:
1. Supplier Power
2. Buyer Power
3. Competitive Rivalry
4. Threat of Substitution
5. Threat of New Entry
Strategic Consideration in Industry Analysis
• Implication of projected growth in gross national product for
various industries
• Implications of plan priorities and plan expenditures for various

industries.
• Implication of industrial and fiscal policies of the government for an

industry.
• Degree of dependence on scarce non-renewable or imported

materials and energy intensity.
• Vulnerability of industry to business cycle.
9
• Linkage between the sectors vulnerable to business cycle and the

industry.
• Life cycle position of industry.
• Price and income elasticity of end product of industry.
• An analysis of competitive conditions is reflected in barriers to

entry.
COMPANY ANALYSIS
After understanding the linkages between Economy and Industry

Analysis, detailed company analysis gives us more clarity about the
company. We need to select a single company in already selected
industry. Understanding business model will help us how the company
generates revenue and how much it converts into profit. The analysis
focuses on understanding of operating, financial and capital market
performance of the company. These strategies will have major impact on
the future top-line and bottom-line. The industry analysis enables us to
shortlist industries for the purpose of insurance investment. The next step
is to identify the superior performers in the industry. Even though an
industry might be doing well, some companies in the industries can be in
doldrums
Strategic consideration of Company Analysis
• A trend analysis of company’s market share.
• An analysis of cost structure and BEP analysis.
• An analysis of turnover of assets, operating and production

efficiencies through ratio analysis.
• Leverage and coverage ratio analysis.
10
• Fund flow analysis.
• Profitability analysis.
• A trend analysis of book value per share.
• An assessment of the quality of the asset.
• An assessment of the quality of management.
CHAPTER-2
RESEARCH DESIGN
11
RESEARCH DESIGN
2.1 TITLE OF THE STUDY
“A STUDY ON FUNDAMENTAL ANALYSIS AND ITS IMPACT ON

INSURANCE SECTOR “
2.2 REVIEW OF LITERATURE
1.A study done by THE GENEVA ASSOCIATION (SYSTEMIC RISK IN

INSURANCE) The Geneva Association is the leading international
insurance “think tank” for strategically important insurance and risk
management issues. The financial crisis has exposed flaws in the
supervisory system and engendered calls to further regulate the
financial sector. Among the many proposals under consideration or
implementation is the idea of applying more stringent supervision and,
perhaps, more onerous regulation to “systemically relevant
institutions”. This proposal is usually conceived as applying to banks.
However, some institutions and governments have recently suggested
that a similar approach be taken to insurers. This report examines the
performance of the insurance industry during the crisis, assesses the
application of the FSB’s proposal on systemic risk to insurance, and
develops initial recommendations to address current regulatory gaps and
strengthen industry risk management practices.
12
2. A study done by Dr.B.Vijaylakshmi. “Impact of Globalization:

Overview Of Insurance Industries In India. “ Volume III, Number:
1,January, 2009.A global risk exposure, a challenging business
environment requires insurance companies to rethink the fundamentals of
their business. The insurance industry has also succumbed to the
general trend towards globalized market and the risk which is evident by
more rapid growth in global trade, direct investment and portfolio
insurance merely restricted to the production of goods and services.
These global firms face a number of unique kind of loss exposures that
arises as a result of conducting business in multiple countries. This
include risk such as terrorism, political instability, uncertain legal
environment, currency risk, import export restriction, technological and
communicational problems, financial market weakness, and substandard
infrastructure. The inability to assess the accurate risk by the global firm
may also be due to improper information retrieval in the under developed
and developing countries. Multinational insurance are keenly watching
the transformation of Indian insurance sector, mainly because the
domestic markets have become saturated for the indigenous insurer, the
other reason for the global insurer to show their interest in Indian market
is based on the principle of spreading the area of operations over a wide
geographical area that would eliminate sudden dips in earnings due to
the unexpected risk.
3. A study done by JAN FREDERIK SLIJKERMAN (AEGON Asset
Management) on Insurance Sector Risk, July 2006,Tinbergen
Institute Discussion Paper No. 06-062/2. We model and measure
simultaneous large losses of the market value of insurers to understand
the impact of shocks on the insurance sector. The downside risk of
insurers is explicitly modeled by common and idiosyncratic risk factors.
Since reinsurance is important for the capacity of insurers, we measure
risk dependence among European insurers and reinsurers. The results
point to a relatively low insurance sector wide risk. Dependence among
13
insurers is higher than among reinsurers.

2.3 STATEMENT OF THE PROBLEM
The study entitled ” A study on fundamental analysis and its impact

on insurance sector” is undertaken with an intention to study the
fundamentals analysis on insurance sector and will find the problems in
insurance sector and performance of insurance sector
2.4 OBJECTIVES OF THE STUDY
• To find out the factors affecting insurance industry
• To study the performance of various insurance company
• To study the movement of stock prices of insurance companies

with respect to present economic and government polices
2.5 SCOPE OF THE STUDY
The present study is carried to know the following aspects. The study
aims to understand the fundamental analysis and its impact on insurance
sector. This study will provide the relevant information about the
economy, industry, and different companies in insurance sector
2.6 OPERATIONAL DEFINITION OF THE CONCEPT
Insurance Premium
The periodic payment made on an insurance policy is called premium
Insurance Policy
A contract of insurance describing the term coverage, premium, and

deductibles is called policy
Protection policies
14
Polices designed to provide a benefit in the event of specified event,

typically a lump sum payment. A common form of this design is term
insurance.
Investment policies
Polices where the main objective is to facilitate the growth of capital by
regular or single premiums. Common forms (in the US anyway) are whole
life universal life and variable life policies.
Economic Analysis
Economic analysis refers to the analysis of the factors or indicators of the

economy that affects the insurance market
Economic integration
The merging to various degrees of the economies and economic policies

of two or more countries in a given region. See also common market,
customs union, and free-trade area, trade creation, and trade diversion.
Economic policy
A statement of objectives and the methods of achieving these objectives

(policy instruments) by government, political party, business concern, etc.
Industry analysis
Industry analysis refers to analyze the plan , priorities and vulnerability of

an industry for government regulation. The competitive conditions as
reflected in any barriers to industry also taken into consideration.
Company analysis
Company analysis includes analysis the company as potentiality for

growth, present performance of insurance sector
Life Insurance
Life insurance or life assurance is a contract between the policy owner
15
and the insurer where the insurer agrees to pay a designated beneficiary
a sum of money upon the occurrence of the insured individual's or
individuals' death or other event, such as terminal illness or critical illness.
In return, the policy owner agrees to pay a stipulated amount at regular
intervals or in lump sums.
2.7 METHODOLOGY
TYPES OF DATA
Only secondary data
SECONDARY DATA: Secondary data refers to those data that has

already been collected and analyzed by someone else. In other words
secondary data is the information that already exists somewhere having
been collected for another purpose.
SAMPLE SIZE
A study on four companies was done. Analyzed all the four companies by
different methods. Equations are:
1.CAGAR SALES =(sales of 2009/sales of 2006)^(1/3)-1
2.CAGAR EPS= (Eps of 2009/Eps of 2006)^(1/3)-1
3.CURRENT RATIO =Current Assets /Current Liabilities
4.Debt to Equity =Total Debt (Short Term +Long Term)/Equity

+Preference
5.Interest Coverage=Earnings Before Interest And Tax/Interest
16
2.8 LIMITATIONS OF THE STUDY
• An in depth study could not be done because of time constraints
• The study is limited to the extent of available data
• The findings and conclusions made during the study might not be
applicable for a long period of time.
2.9 CHAPTER SCHEME
1. INTRODUCTION
It includes introduction to the study about the specific area chosen.
2. RESEARCH DESIGN
This chapter provides a plan of the study, which include statement of

the problem, need for study, review of the previous studies, objectives,
definition of concepts, scope, methodology, sample design, sources of
data, tool and techniques for data collection, limitations and an overview
of chapter scheme.
3. PROFILE OF THE INDUSTRY AND COMPANIES
This chapter contains a complete profile of the industry and

companies that is history, nature of business, product and services etc..
4. ANALYSIS AND INTERPRETATION OF THE DATA
It provides an analysis of the data with required interpretation with the

help of tables.
5. SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONS
17
This chapter must start with an overview of the dissertation, summarize

the findings under each objective, provide conclusions and
recommendations based on the findings. It is to be noted that the
recommendations are practical, acceptable and comprehensive.
BIBLIOGRAPHY
It includes the list of the articles, books, websites that are referred and
useful for research of the topic.
ANNEXURE
CHAPTER 3
INDUSTRY PROFILE
18
INSURANCE INDUSTRY
In India, insurance has a deep-rooted history. It finds mention in

the writings of Manu (Manusmrithi), Yagnavalkya (Dharma Astra ) and
Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources
that could be re-distributed in times of calamities such as fire, floods,
epidemics and famine. This was probably a pre-cursor to modern day
insurance. Ancient Indian history has preserved the earliest traces of
insurance in the form of marine trade loans and carriers’ contracts.
Insurance in India has evolved over time heavily drawing from other
countries, England in particular.
1818 saw the advent of life insurance business in India with the
establishment of the Oriental Life Insurance Company in Calcutta. This
Company however failed in 1834. In 1829, the Madras Equitable had
begun transacting life insurance business in the Madras Presidency.
1870 saw the enactment of the British Insurance Act and in the last three
decades of the nineteenth century, the Bombay Mutual (1871), Oriental
(1874) and Empire of India (1897) were started in the Bombay
Residency. This era, however, was dominated by foreign insurance
offices which did good business in India, namely Albert Life Assurance,
Royal Insurance, Liverpool and London Globe Insurance and the Indian
19
offices were up for hard competition from the foreign companies.
In 1914, the Government of India started publishing returns of

Insurance Companies in India. The Indian Life Assurance Companies
Act, 1912 was the first statutory measure to regulate life business. In
1928, the Indian Insurance Companies Act was enacted to enable the
Government to collect statistical information about both life and non-life
business transacted in India by Indian and foreign insurers including
provident insurance societies. In 1938, with a view to protecting the
interest of the Insurance public, the earlier legislation was consolidated
and amended by the Insurance Act, 1938 with comprehensive provisions
for effective control over the activities of insurers.
The Insurance Amendment Act of 1950 abolished Principal

Agencies. However, there were a large number of insurance companies
and the level of competition was high. There were also allegations of
unfair trade practices. The Government of India, therefore, decided to
nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the

Life Insurance sector and Life Insurance Corporation came into existence
in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers
as also 75 provident societies—245 Indian and foreign insurers in all. The
LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector.
The history of general insurance dates back to the Industrial

Revolution in the west and the consequent growth of sea-faring trade and
commerce in the 17th century. It came to India as a legacy of British
occupation. General Insurance in India has its roots in the establishment
of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the
British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This
was the first company to transact all classes of general insurance
20
business. 1957 saw the formation of the General Insurance Council, a

wing of the Insurance Association of India. The General Insurance
Council framed a code of conduct for ensuring fair conduct and sound
business practices.
In 1968, the Insurance Act was amended to regulate investments

and set minimum solvency margins. The Tariff Advisory Committee was
also set up then.
In 1972 with the passing of the General Insurance Business

(Nationalization) Act, general insurance business was nationalized with
effect from 1st January, 1973. 107 insurers were amalgamated and
grouped into four companies, namely National Insurance Company Ltd.,
the New India Assurance Company Ltd., the Oriental Insurance Company
Ltd and the United India Insurance Company Ltd. The General Insurance
Corporation of India was incorporated as a company in 1971 and it
commence business on January 1sst 1973.
This millennium has seen insurance come a full circle in a journey

extending to nearly 200 years. The process of re-opening of the sector
had begun in the early 1990s and the last decade and more has seen it
been opened up substantially. In 1993, the Government set up a
committee under the chairmanship of RN Malhotra, former Governor of
RBI, to propose recommendations for reforms in the insurance sector.
The objective was to complement the reforms initiated in the financial
sector. The committee submitted its report in 1994 wherein, among other
things, it recommended that the private sector be permitted to enter the
insurance industry. They stated that foreign companies be allowed to
enter by floating Indian companies, preferably a joint venture with Indian
partners.
A brief history of the Insurance sector
The business of life insurance in India in its existing form started in
21
India in the year 1818 with the establishment of the Oriental Life
Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in

India are:
• 1912: The Indian Life Assurance Companies Act enacted as the

first statute to regulate the life insurance business.
• 1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and
non-life insurance businesses.
• 1938: Earlier legislation consolidated and amended to by the
Insurance Act with the objective of protecting the interests of the
insuring public.
• 1956: 245 Indian and foreign insurers and provident societies

taken over by the central government and nationalized. LIC formed
by an Act of Parliament, viz. LIC Act, 1956, with a capital
contribution of Rs.5 crore from the Government of India.
The General insurance business in India, on the other hand, can
trace its roots to the Triton Insurance Company Ltd., the first general
insurance company established in the year 1850 in Calcutta by the
British.
Some of the important milestones in the general insurance business in

India are:
• 1907: The Indian Mercantile Insurance Ltd. set up, the first
22
company to transact all classes of general insurance business.

• 1957: General Insurance Council, a wing of the Insurance
Association of India, frames a code of conduct for ensuring fair
conduct and sound business practices.
• 1968: The Insurance Act amended to regulate investments and set
minimum solvency margins and the Tariff Advisory Committee set
up.
• 1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India with effect
from 1st January 1973.
• 107 insurers amalgamated and grouped into four companies viz.
the National Insurance Company Ltd., the New India Assurance
Company Ltd., the Oriental Insurance Company Ltd. and the
United India Insurance Company Ltd. GIC incorporated as a
company.
LIFE INSURERS
Public sector
1.Life Insurance Corporation Of India
Private sector
1.Bajaj Allianz Life Insurance Company Limited

2. Birla Sun Life Insurance Co. Ltd
3. HDFC Standard Life Insurance Co. Ltd
4. ICICI Prudential Life Insurance Co. Ltd.
5. ING Vysya Life Insurance Company Ltd.
6. Max New York Life Insurance Co. Ltd
7. Met Life India Insurance Company Ltd.
8. Kotak Mahindra Old Mutual Life Insurance Limited
9. SBI Life Insurance Co. Ltd
23
10. Tata AIG Life Insurance Company Limited

11. Reliance Life Insurance Company Limited.
12. Aviva Life Insurance Co. India Pvt. Ltd.
13. Sahara India Life Insurance Co, Ltd.
14. Shriram Life Insurance Co, Ltd.
15. Bharti AXA Life Insurance Company Ltd.
16. Future Generali Life Insurance Company Ltd.
17. IDBI Fortis Life Insurance Company Ltd.
18. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd
19. AEGON Religare Life Insurance Company Limited.
20. DLF Pramerica Life Insurance Co. Ltd.
21. Star Union Dai-ichi Life Insurance Comp. Ltd.
GENERAL INSURERS
Public sector
1.National Insurance Company Limited

2.New India Assurance Company Limited
3.Oriental Insurance Company Limited
4.United India Insurance Company Limited
Private Sector
1.Bajaj Allianz General Insurance Co. Limited
2.ICICI Lombard General Insurance Co. Ltd.
3.IFFCO-Tokio General Insurance Co. Ltd.
4.Reliance General Insurance Co. Limited
5.Royal Sundaram Alliance Insurance Co. Ltd.
6.TATA AIG General Insurance Co. Limited
7.Export Credit Guarantee Corporation
24
8.Cholamandalam General Insurance Co. Ltd.
REINSURER
1.General Insurance Corporation of India
PRESENT SCENARIO OF INSURANCE INDUSTRY
India with about 200 million middle class household shows a huge
untapped potential for players in the insurance industry. Saturation of
markets in many developed economies has made the Indian market even
more attractive for global insurance majors. The insurance sector in India
has come to a position of very high potential and competitiveness in the
market. Indians, have always seen life insurance as a tax saving device,
are now suddenly turning to the private sector that are providing them
new products and variety for their choice.
Consumers remain the most important centre of the insurance

sector. After the entry of the foreign players the industry is seeing a lot of
competition and thus improvement of the customer service in the
industry. Computerization of operations and updating of technology has
become imperative in the current scenario. Foreign players are bringing
in international best practices in service through use of latest
technologies
The insurance agents still remain the main source through which
insurance products are sold. The concept is very well established in the
country like India but still the increasing use of other sources is
imperative. At present the distribution channels that are available in the
market are listed below.
25
• Direct selling
• Corporate agents
• Group selling
• Brokers and cooperative societies
• Banc assurance
Customers have tremendous choice from a large variety of products

from pure term (risk) insurance to unit-linked investment products.
Customers are offered unbundled products with a variety of benefits as
riders from which they can choose. More customers are buying products
and services based on their true needs and not just traditional money
back policies, which is not considered very appropriate for long-term
protection and savings. There is lots of saving and investment plans in
the market. However, there are still some key new products yet to be
introduced - e.g. health products.
The rural consumer is now exhibiting an increasing propensity for

insurance products. A research conducted exhibited that the rural
consumers are willing to dole out anything between Rs.3,500 and
Rs.2,900 as premium each year. In the insurance the awareness level for
life insurance is the highest in rural India, but the consumers are also
aware about motor, accidents and cattle insurance. In a study conducted
by MART the results showed that nearly one third said that they had
purchased some kind of insurance with the maximum penetration skewed
in favor of life insurance. The study also pointed out the private
companies have huge task to play in creating awareness and credibility
among the rural populace. The perceived benefits of buying a life policy
range from security of income bulk return in future, daughter's marriage,
children's education and good return on savings, in that order, the study
adds.
26
FEATURES OF INSURANCE INDUSTRY
Insurance Policy India provides the clients with the details required
for the coverage in the policy, date of commencement of the policy and
their adopting organizations. It plays a important role in the Indian
insurance sector.
The Insurance Policy India is regulated by certain acts like the Insurance
Act (1938), the Life Insurance Corporation Act (1956), General Insurance
Business Nationalization) Act (1972), Insurance Regulatory and
Development Authority IRDA) Act (1999). The insurance policy
determines the covers against risks, sometime opens investment options
with insurance companies setting high returns and also informs about the
tax benefits like the LIC in India. There are two types of insurance covers:
1. Life insurance
2. General insurance
Life insurance – this sector deals with the risks and the accidents
affecting the life of the customer. Alongside, this insurance policy also
offers tax planning and investment returns. There are various types of life
Insurance Policy India:
a. Endowment Policy
b. Whole Life Policy
27
c. Term Life Policy
d. Money-back Policy
e. Joint Life Policy
f. Group Insurance Policy
General Insurance – this sector covers almost everything related to

property, vehicle, cash, household goods, health and also one's liability
towards others. The major segments covered under general Insurance
Policy India are:
a. Home Insurance
b. Health Insurance
c. Motor Insurance
d. Travel Insurance
Some of the well-known Insurance Policy India are:
Social Security Group Scheme – a scheme covering the age group of

18-60 years and an insurance of Rs.5000 for natural death and of
Rs.25000 on due to accidental death.
Shiksha Sahyog Yojana – a scheme providing an educational
scholarship of Rs.300 per quarter per child is given for a period of four
years.
Jan Arogya Bima Policy – a scheme for the adult’s up to the age of 45
years is Rs.70 and for children it is Rs.50. The limit coverage is fixed at
Rs.5000 per annum.
Mediclaim Insurance Policy – a scheme covering the age group from 5-

80 years with a tax benefit of up to Rs.10,000.
Jana Shree Bima Yojana – this is coverage of Rs.2,000 on natural death

and Rs.50,000 for accidental death. The premium amount is fixed at
28
Rs.200 for single member.
Videsh Yatra Mitra Policy – a scheme-covering medical expenses

during the period of overseas travel.
Bhagya Shree Child Welfare Bima Yojana – a scheme covering one

girl child in a family up to the age of 18 whose parents age does not
exceed 60 years, with a premium of Rs.15 per annum.
Raj Rajeshwari Mahila Kalyan Yojana – a scheme providing protection

to woman in the age group of 10 to 75 years with an insurance of
Rs.25,000 and premium Rs.15 per annum.
Ashray Bima Yojana – scheme-covering workers in case of loss of jobs.

Personal Accident Insurance Scheme for Kissan Credit Card – a scheme
covering all the KCC holders up to an age of 70 years. Insurance
coverage includes 50,000 for accidental death and 25,000 for partial
disability.
The functions of Insurance can be bifurcated into two parts:
1. Primary Functions
2. Secondary Functions
3. Other Functions
The primary functions of insurance include the following:
Provide Protection - The primary function of insurance is to provide

protection against future risk, accidents and uncertainty. Insurance
cannot check the happening of the risk, but can certainly provide for the
losses of risk. Insurance is actually a protection against economic loss,
by sharing the risk with others.
Collective bearing of risk - Insurance is a device to share the financial

loss of few among many others. Insurance is a mean by which few losses
are shared among larger number of people. All the insured contribute the
29
premiums towards a fund and out of which the persons exposed to a

particular risk is paid.
Assessment of risk - Insurance determines the probable volume of risk

by evaluating various factors that give rise to risk. Risk is the basis for
determining the premium rate also.
Provide Certainty - Insurance is a device, which helps to change from

uncertainty to certainty. Insurance is device whereby the uncertain risks
may be made more certain.
The secondary functions of insurance include the following:
Prevention of Losses - Insurance cautions individuals and businessmen

to adopt suitable device to prevent unfortunate consequences of risk by
observing safety instructions; installation of automatic sparkler or alarm
systems, etc. Prevention of losses cause lesser payment to the assured
by the insurer and this will encourage for more savings by way of
premium. Reduced rate of premiums stimulate for more business and
better protection to the insured.
Small capital to cover larger risks - Insurance relieves the

businessmen from security investments, by paying small amount of
premium against larger risks and uncertainty.
Contributes towards the development of larger industries - Insurance
provides development opportunity to those larger industries having more
risks in their setting up. Even the financial institutions may be prepared to
give credit to sick industrial units which have insured their assets
including plant and machinery.
The other functions of insurance include the following:
Means of savings and investment - Insurance serves as savings and

investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's For the purpose of availing
30
income-tax exemptions also, people invest in insurance.
Source of earning foreign exchange - Insurance is an international

business. The country can earn foreign exchange by way of issue of
marine insurance policies and various other ways.
Risk Free trade - Insurance promotes exports insurance, which makes

the foreign trade risk free with the help of different types of policies under
marine insurance cover.
DEMAND DRIVERS
Before Independence
The insurance industry originated in India in the year 1818 with the
formation of Life Insurance Corporation in Calcutta. The idea behind
starting LIC was to provide insurance coverage for English widows and
different premium was charged for the English and for the Indians. In
1870 Bombay Mutual Life Insurance Society established its Insurance
business and the same premium was charged for both Indians and
English. In 1912 the Insurance sector came under the purview of
regulations when the government passed the Life Insurance Companies
Act. But it was in the year 1938 when the government came up with the
first legislation to bring the insurance sector under state control.
Post Independence
In 1956, the Government of India nationalized insurance

companies bringing Indian Insurance sector under the purview of the
Government. These state owned Insurance companies became highly
inefficient and bureaucratic, had excess manpower and countless delay
in settlement of claims but the nation did not have an alternative. Any
effort by the government to privatize the industry met with stiff resistance
from the trade unions.
31
Post Liberalization Policies regarding Insurance
Under the recommendation of Malhotra Committee the Insurance

Regulatory And Development Authority was set up to monitor and control
the Insurance industry some of the initiatives taken by the government
after Insurance sector reforms are:
• Government to have not more than 50 per cent stake in insurance

companies.
• Insurance sector to be opened up for private companies and any

number of insurance enterprises can operate.
• Private players with minimum paid up capital of Rs.1 billion should

be given opportunity to do business.
• Foreign companies can enter Indian market through joint ventures

with Indian companies.
The state controlled Insurance companies like LIC and GIC faced stiff
competition from private insurance companies post reforms. The
monopoly of the national Insurance companies came to an end. The
private Insurance companies were able to exploit the shortcomings in the
state run Insurance companies. The private insurance companies
launched a variety of new insurance products like health care, pension
plans, annuity plans, income protection, market linked products, which
were welcomed by the end customers. The business for the private
sector boomed in both urban and rural sector alike.
FDI Policy Regarding Insurance Sector
THE Finance Minister, while presenting the first Budget of the UPA
government, has proposed to raise the FDI cap in three sectors.
Elaborating upon the decision he said, “The NCMP declares that FDI will
continue to be encouraged and actively sought, particularly in areas of
infrastructure, high technology and exports. Three sectors of the
32
economy fully meet this description. They are telecommunications, civil

aviation and insurance.” The specific proposal for the insurance sector is
to raise the FDI cap from 26 to 49 per cent. We argue below that this
move is unjustifiable on several grounds.
Bodies that regulate the sector:
For better regulation purpose of the insurance sector the

government has established following bodies;
1. IRA: Insurance Regulatory Authority.
2. IRDA: Insurance Regulatory and Development Authority.
3. TAC: Tariff Advisory Committee.
1.IRA: INSURANCE REGULATORY AUTHORITY:
The IRA, under the chairmanship of Rangachary, was set-up in

January 1996. The IRA Bill has to be passed by parliament to make the
IRA a statutory body. Comprehensive legislation aimed at reviewing the
insurance Act of 1938 and repealing the life insurance corporation Act of
1956 have to be passed.
The IRA is also preparing an internal rating system to screen all

applications, as entry will be in phases. The joint venture status of life
insurance companies (with majority holding of the domestic partner) is
likely to be approved by the parliament. Consensus also seems to be
emerging on the minimum of Rs.1 bn capital stipulations for new
insurance companies.
The IRA has stipulated a minimum rural presence for all

companies. The exhaustive guidelines have been issued for the
appointment of intermediaries (brokers, agents, surveyors and actuaries).
33
Feature of IRA:
1. The Bill allowed for up to 26% foreign equity participation in the

insurance sector.
2. The current India monopoly companies were required to bring

down their equity holding to 26% within a period of 10 years.
Government pronouncement:
1. IRA will be sole Authority, which will be responsible for awarding

of, licenses i.e. little or no government or political interference in
licensing process.
2. No restriction on the number of licenses.
3. No composite license for life insurance business.
4. Licensing to be only on national basis (no city by city approach)
5. IRA allowed for up to 26% foreign equity participation in the life

insurance sector.
6. The current Indian monopolies companies are required to bring

down their equity holding to 26% within a period of 10 years.
IRA proposals:
1. New player should start their business within 15-18 months.
2. Trafficking of licenses not to be permitted.
3. IRA to seek business plan with 5-year protection for all applicants.
4. A system of direct brokers to be introduced.
5. IRA to vet top management appointments.
2. IRDA: INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY:-
34
The Insurance Regulatory and Development Authority, constituted

under the IRDA Act, 1999, provide for the establishment of an authority to
protect the interest policyholders, to regulate, promote and ensure orderly
growth of the life insurance industry.
Business Requirement:-
A company will not be issued a license unless the IRDA is satisfied

with the sound financial condition, the general character of management,
the volume of business, the capital structure, earning prospects for the
insurers and that the interests of the general public will be served if
registration is granted to the insurer.
Foreign insurance companies have been allowed to have a

maximum 26% share holding. No life insurance company can be
registered under the Act unless they have a paid up capital of Rs.100
crores. Every life insurer shall deposit with the reserve bank of India one
percent of the total gross premium written in India in any financial year,
not exceeding Rs.10 crores.
This amount would not be susceptible to any assignment or

charge nor would it be available for the discharge of any liabilities other
than liabilities arising out of policies issued, so long as any such liabilities
remain undercharged.
Investment of Assets:-
Every insurer is required to invest, and keep invested, assets

equivalent to not less than the net liabilities as follows:
a. 25 % in government securities,
b. a least 25% of the said sum in government securities or

other approved securities and
35
c. the balance in any approved investment rated as “very

stron” or more by reputed rating agencies, which include various
debt instruments on which dividend on its ordinary shared for the
five years immediately preceding or for at least five out of the six
or seven years immediately preceding have been paid and which
have priority in payment over ordinary shares of the company in
winding up.
The IRDA may in the interest of the policyholder’s directions

relation the time, manner and other conditions and investments of assets
to be held by an insurer. The IRDA may also direct the insurer to realize
the investment, if it sees the investments to be unsuitable or undesirable.
The Act prohibits an insurer from directly or indirectly investing
policyholder funds outside India.
Further, every insurer has to always maintain an excess of the

value of his assets over the amount of his liabilities of not less than Rs.50
crores in the case of an insurer carrying of life insurance business. If at
any time an insurer does not maintain the required solvency margin, he is
required to submit a financial plan, as per directions issued by the IRDA,
indicating a plan of action to correct the deficiency within three months.
In order to ensure that the company does not risk the money of the
policyholder’s, the Act provides that an insurer who does not comply with
the aforesaid provisions may be deemed to be insolvent and may be
would up by the court.
Insurers are required to get an actuary to investigate the financial

conditions of the life insurance business including a valuation of liabilities
every year in order to ensure continual compliance
In order to maintain transparency in its dealings, insurers would

have to keep separate account relating to funds of shareholders and
policyholders.
36
3. TARIFF ADVISORY COMMITTEE:
The tariff advisory committee established under the Act is

empowered to control and regulate the rates, terms, and etc. that may be
offered by insurers in respect of any risk or of any category of risks. It is
provided that in fixing, amending or modifying such rates etc. the
committee shall try to ensure as far as possible that there is no unfair
discrimination between risk of essentially the same hazard and also that
consideration is given to past and prospective loss experience. Every
insurer is required to make payment to the TAC of the prescribed annual
fees.
TAX POLICY AND INSURANCE SECTOR:
Another factor, which affects the insurance sector, is the tax policy.
The tax reforms in India are such that it encourages the citizens to invest
in the insurance sector.
The tax policy of the government is particular relevant for life

insurance which is a long-term contract and inculcates among the
policyholders the habit of saving. Taxation of returns on investment
influences, investment decisions and high rates of taxation will
discourage the desire to save. Already in India there are complaints that
the rates of return on life policies are not what they could be. Therefore
tax incentives play a vital role in determining the attractiveness of such
policies. Such tax breaks are available in many countries and have
helped in the development of their life sector. In western countries the
gain from the proceeds of a life insurance policy is paid free of tax.
Provided the policy satisfies certain qualifying conditions. Non-qualifying
policies get basic rate tax relief, though higher rate taxpayers may still
have to pay tax on the gain, although at a reduced rate. The insurance
companies can use such tax concessions rate. The insurance companies
can use such tax concessions to design products for different categories
37
of taxpayers.
The other factors, which affect the insurance sector, are the
employment law, and government stability. These are the factors, which
affect the insurance industry
CHAPTER-4
DATA ANALYSIS
AND
INTERPRETATION
38
DATA ANALYSIS AND INTERPRETATION
4.1 ECONOMIC ANALYSIS
Overview of Indian Economy
India, an emerging economy, has witnessed unprecedented levels

of economic expansion, along with countries like China, Russia, Mexico
and Brazil. India, being a cost effective and labor-intensive economy, has
benefited immensely from outsourcing of work from developed countries,
and a strong manufacturing and export oriented industrial framework.
With the economic pace picking up, global commodity price have staged
a comeback from their lows and global trade has also seen healthy
growth over the last two years.
As per the advance estimates of GDP for 2009-10 released by the

Central Statistical Organization (CSO), the economy is expected to grow
at 7.2 per cent in 2009-10, with the industrial and the service sectors
growing at 8.2 and 8.7 per cent respectively. India’s gross domestic
product (GDP) grew by 6 per cent during October to December 2009,
over the corresponding quarter of the previous year, as per data released
by the CSO.
The economic activities which registered significant growth in the
third quarter of 2009-10 over the corresponding period in 2008-09 are
'mining and quarrying' at 9.6 per cent, 'manufacturing' at 14.3 per cent,
'construction' at 8.7 per cent, 'trade, hotels, transport and communication'
at 10 per cent and 'financing, insurance, real estate and business
39
services' at 7.8 per cent.

According to the latest estimates available on the Index of Industrial
Production (IIP), the index of mining, manufacturing and electricity,
registered growth rates of 9.6 per cent, 14.3 per cent and 4 per cent,
respectively in Q3 of 2009-10, as compared to the growth rates of 2 per
cent, 0.5 per cent and 2.9 per cent in these industries in same period in
2008-09. The key indicators of construction sector, namely, cement and
finished steel registered growth rates of 8.5 per cent and 7.7 per cent,
respectively in Q3 of 2009-10.
The Economic scenario
Foreign institutional investors (FIIs) were net investors of US$ 4.37
billion in equity and US$ 2.09 billion in debt instruments in the month of
March 2010, according to the data released by Securities and Exchange
Board of India (SEBI). The number of registered FIIs was 1713 as on
March 31, 2010 and the total FII inflow in equity during January to March
2010 was US$ 4.54 billion while it was US$ 4.71 billion in debt.
As on March 26, 2010, India's foreign exchange reserves totaled
US$ 277.04 billion, an increase of US$ 24.71 billion over the same period
last year, according to the Reserve Bank of India's Weekly Statistical
Supplement.
Moreover, India received FDI worth US$ 20.92 billion during April-
December 2009, taking the cumulative amount of FDI inflows from
August 1991 to December 2009 to US$ 127.46 billion, according to the
Department of Industrial Policy and Promotion.
Six-core infrastructure industries grew at 4.5 per cent in February
2010 against 1.9 per cent during the corresponding month last year,
primarily due to increased output in electricity. The six infrastructure
sectors—crude, petroleum refinery products, coal, electricity, cement and
finished steel—that constitute 26.68 per cent in IIP, recorded a growth of
5.3 per cent in the period April-February 2009-10, as against 2.9 per cent
in the same period last year.
40
Moreover, according to latest data from RBI, loan disbursement by

scheduled commercial banks, including regional rural banks, recorded
16.04 per cent growth at the end of March 12, 2010, on a year-on-year
basis. This is above RBI's projection of 16 per cent credit growth in this
financial year.
Of the more than 200 companies from over 50 countries that form part of
the World Economic Forum's Global Growth Companies (GGC)
Community, India today has the second largest representation, with a
total of 18 GGCs. Indian GGCs come from every sector, with a strong
representation in information technology and electronics, retail, consumer
goods and banking.
The GGC Community was formed to engage high-growth
companies with the potential to be tomorrow's industry leaders and drive
economic and social change.
INDIA GDP GROWTH RATE

The Gross Domestic Product (GDP) in India expanded at an
annual rate of 7.20 percent in the last quarter. India Gross Domestic
Product is worth 1217 billion dollars or 1.96% of the world economy,
according to the World Bank. India's diverse economy encompasses
traditional village farming, modern agriculture, handicrafts, a wide range
of modern industries, and a multitude of services. Services are the major
source of economic growth, accounting for more than half of India's
output with less than one third of its labor force. The economy has posted
an average growth rate of more than 7% in the decade since 1997,
reducing poverty by about 10 percentage points.
41
GRAPH NO-4.1
India GDP growth rate
Interest Rate
Interest rates might soon be on an upward move. But if one is

planning to break that lower-paying fixed deposit (FD) to get higher rates,
it will cost . The Reserve Bank of India (RBI) currently expects banks to
convert FD’s without penalizing or reducing the interest rate as long as
the money is rotated into a new FD. “Banks can formulate their own
policies towards conversion of deposits,” the RBI said. This means banks
can penalize for aborting existing FD’s. The RBI raised repo rates by
0.25% and the cash reserve ratio (CRR) by the same amount. The latter
change will immobilize Rs.12,500 crore of bank funds.
42
TABLE NO-4.1
Cash Reserve Ratio and Interest Rates
2010 2010
Item / Week Ended Apr. 2 Apr. 9 Apr. 16
1 2 3
Cash Reserve Ratio (per
cent)(1) 5.75 5.75 5.75
Bank Rate 6.00 6.00 6.00
I.D.B.I.(2) 10.25 10.25 10.25
11.00-
Prime Lending Rate(3) 12.00 11.00-12.00 11.00-12.00
Deposit Rate(4) 6.00-7.50 6.00-7.50 6.00-7.50
Call Money Rate (Low /
High)(5)
- Borrowings 1.75/5.75 1.25/3.75 2.00/3.90
- Lendings 1.75/5.75 1.25/3.75 2.00/3.90
(1) Cash Reserve Ratio relates to Scheduled Commercial Banks
(excluding Regional Rural Banks).
(2) Minimum Term Lending Rate (MTLR).
(3) Prime Lending Rate relates to five major Banks.
(4) Deposit Rate relates to major Banks for term deposits of more than
one year maturity.
(5) Data cover 90-95 per cent of total transactions reported by
participants.
Inflation
On March 19, 2010, the Reserve bank of India raised its

benchmark reverse repurchase rate to 3.5% percent, after this rate
touched record lows of 3.25%. The repurchase rate was raised to 5%
from 4.75% as well, in an attempt to curb Indian inflation. India’s 2009-10
Economic Survey Report suggests a high double-digit increase in food
inflation, with signs of inflation spreading to various other sectors as well.
43
The Deputy Governor of the Reserve Bank of India, however, expressed

his optimism in March 2010 about an imminent easing of Indian
wholesale price index-based inflation, on the back of falling oil and food
prices.
For 2009, Indian inflation stood at 11.49% Y-o-Y. This rate reflects
the general increase in prices, taking into account the purchasing power
of the common man. According to the Economic Survey Report for 2009-
10, economic growth decelerated to 6.7% in 2008-09, from 9% in 2007-
08. The economy is expected to grow by 8.7% in 2010-11, with a return
to a growth rate of 9% in 2011-12.
Food Inflation Up 16.61%
India's annual food price inflation eased in mid-April, but fuel price
inflation quickened maintaining an upside pressure on the wholesale
price index that could prompt further monetary tightening by the central
bank. The food price index rose 16.61 percent in the 12 months to April
17, lower than an annual rise of 17.65 percent in the previous week,
government data showed on Thursday. The fuel price index rose an
annual 12.69 percent, higher than the previous week's reading of 12.45
percent.
Wholesale price inflation in March touched a 17-month high of 9.9
percent, prompting the Reserve Bank of India (RBI) to raise rates in April
for the second time in as many months. Reserve Bank of India Governor
Duvvuri Subbarao said rising prices for food, fuel and wages have made
inflation more of a generalized and demand-side problem. Much of the
country's inflationary pressures were initially on the supply-side as a
result of the 2009 monsoon failure that pushed up food prices. But
summer monsoon is likely to be normal this year, with rainfall expected to
44
be 98 percent of the long-term average, the government said last Friday.

The RBI has forecast the headline inflation to ease to 5.5 percent at end-
March 2011 on normal monsoon.
Exchange Rate
Rupees are used in a number of countries including India and Pakistan.
The Reserve Bank of India (RBI) issues the Indian currency. The Indian
rupee exchange rate measured against six-currency trade weighted
indices. These currencies belong to countries that have a strong trade
relationship with India.
The exchange rate of the Indian rupee (or INR) is determined by market
conditions. However, in order to maintain effective exchange rates, the
RBI actively trades in the USD/INR Currency market. The rupee currency
is not pegged to any particular foreign currency at a specific exchange
rate. The RBI intervenes in the currency markets to maintain low volatility
in exchange rates and remove excess liquidity from the economy.
TABLE NO-4.2
Exchange rates (using values from Friday, April 30, 2010)
1 INR In INR
American Dollar 0.022543 44.3597
Argentine Peso 0.0882526 11.3311
Australian Dollar 0.0241972 41.3271
Brazilian Real 0.0388709 25.7262
British Pound 0.0147346 67.8673
Bulgarian Lev 0.0331127 30.1999
Canadian Dollar 0.0226514 44.1474
Chilean Peso 11.6528 0.0858164
Chinese Yuan 0.153861 6.49937
Colombian Peso 43.9392 0.0227587
Croatian Kuna 0.122797 8.14352
Danish Krone 0.126005 7.93617
Estonian Kroon 0.264905 3.77494
Euro 0.0169305 59.0649
45
Hong Kong Dollar 0.175006 5.7141

Hungarian Forint 4.51741 0.221366
Iceland Krona 2.88264 0.346904
Israeli New Shekel 0.0839016 11.9187
Japanese Yen 2.13003 0.469477
Latvian Lat 0.0119767 83.4957
Lithuanian Litas 0.0584578 17.1064
Malaysian Ringgit 0.0717888 13.9297
Mexican Peso 0.275054 3.63565
New Zealand Dollar 0.0309051 32.3571
Norwegian Kroner 0.132812 7.52947
Pakistan Rupee 1.89406 0.527967
Romanian Leu 0.0699229 14.3015
Russian Ruble 0.657565 1.52076
Singapore Dollar 0.0308424 32.4229
South African Rand 0.165289 6.05
South Korean Won 24.9803 0.0400315
Sri Lanka Rupee 2.56866 0.389308
Swedish Krona 0.1629 6.13872
Swiss Franc 0.0242801 41.1859
Taiwan Dollar 0.706459 1.41551
Thai Baht 0.729383 1.37102
Trinidad/Tobago
Dollar 0.143244 6.98109
Turkish Lira 0.0334497 29.8956
Venezuelan Bolivar 0.0968343 10.3269
Agricultural out put (monsoon impact)
The share of agriculture to the gross domestic product (GDP) has

dropped from 25% in 2002 to 17% currently. Yet, agriculture contributes a
huge chunk to the GDP, making it a very important sector for India's
growth. The performance of this sector is very crucial to the Indian
economy not only with regard to GDP but also as a huge chunk of the
Indian population is dependant on agriculture. Rainfall in India so far this
year is 28% below par and this is a major cause of concern as the impact
46
could be devastating. Monsoon in the northwestern region of India, the

main growing area, is 40% below average. If agricultural production goes
down in India then the direct impact would be a decline in the income of
people. The economy as a whole and the GDP will get affected. This
factor could lower production of food but raise the prices. Hence, the
significance of the monsoon for the economic system cannot be under-
estimated. The monsoon can directly affect government savings, public
investment and foreign exchange reserves.
It is not only important for the monsoon to commence, but the time
of commencement is also important. For farmers, it is highly critical to
know when the onset will occur as this affects the timing of the planting of
crops. If rainfall is deficient then more than two-thirds of the seedlings can
die. To prevent this, the prediction systems play a very important role.
60% of Indian Agriculture is monsoon dependent. With rainfall this time
being deficient by 45%, the agriculture sector has been hit hard.
Also, post-economic disaster, rural India has become the focus for many
organizations. But with monsoon showing no sign of rain, the rural
income is bound to decrease, which eventually will affect the
organization's plans and economic conditions.
Apart from this, a severe problem that bad monsoon is to bring is the rise
in the price of cash crops, vegetables and fruits. This is the most
dreading consequence of deficient rainfall as the basic needs of people
might have to be compromised. This increase in the price of food will
cause inflation to go up.
Economic Policies
As per latest reports from Press Trust of India, Reserve Bank of

India has come up with a new India economic policy whereby it would be
47
relaxing its money supply activities. It has also said that its economic
policy of India would be successful to help this country recover fiscally by
2011 only. However, there is a pre-condition for this situation to be
realized. This economic policy in India would be able to bear fruit
provided other advanced economies of world are able to recover from
aftereffects of global financial meltdown.
In recent times many a Indian economic policy have been

formulated whereby three back to back economic stimulus packages
have been provided to weaker sections of Indian economy. However,
such India economic policies have only led to increasing of financial
deficit. An important part of India economic policy of national government
is bringing back confidence of business establishments in India financial
system.
As per latest India economic policy, economy would be moving

towards a single goods and service tax by doing away with differences
between rates of service tax and CENVAT. In interim budget for fiscals
2009-10 service taxes and excise duties have been reduced. According
to this India economic policy a significant amount of money would be lost
as a result of these tax benefits – losses are expected to amount to INR
29,000 crores. Maximum amount of losses to tune of INR 14,000 crores
would be incurred in services tax selection. Customs duties sector would
face losses of INR 6,600 crores and for excise duties it would be INR
8,500 crores.
MONETARY POLICY
RBI came out with its annual monetary policy for 2010-11, which
was more or less in line with market expectations. RBI hiked repo,
reverse repo and CRR by 25 bps each. The policy rates are with
immediate effect, while the CRR hike will be effective from April 24. The
increase in CRR is expected to absorb about Rs.12500cr from the
48
system.
MONETARY MEASURES
1. Repo Rate hiked from 5.0% to 5.25% (with immediate effect).
2. Reverse Repo Rate hiked from 3.5% to 3.75% (with immediate effect).
3. Cash Reserve Ratio hiked from 5.75% to 6.0% (effective from April
24). As a result of the hike in CRR, Rs.12500cr (approx.) of excess
liquidity will be absorbed from the system.
4. Bank Rate unchanged at 6.0%.
5. Statutory Liquidity Ratio unchanged at 25%.
MONETARY PROJECTION
. The projection of money supply growth for 2010-11 is placed at 17%.

. Consistent with this, aggregate deposits of Scheduled Commercial
banks (SCBs) are projected to grow by 18%.
. The growth in non-food credit of SCBs is placed at 20%.
. Introduction of a reporting platform for all secondary market transactions
in Certificate of Deposits (CDs) and Corporate Papers (CPs)
. FIMMDA has been requested to start work on developing a platform for
CDs and CPs similar to its existing platform for corporate bonds.
. To allow banks to classify their investments in non SLR bonds issued by
companies engaged in infrastructure activities and having a minimum
residual maturity of seven years under the held to maturity (HTM)
category
. The much awaited paper on bank licenses for the private companies will
be placed on RBI website by end July 2010.
. By end of June, the bank proposes to prepare the draft for Credit
Default Swaps (CDS) introduction. Around the same time, it will finalize
OTC forex derivatives norms.
The hike in policy rates and CRR is broadly in line with
49
expectations. The well-balanced measures taken by the RBI is aimed at

controlling inflation and promoting sustainable growth. But it considers
tempering of liquidity equally important.
There are speculations of the lending getting more expensive but
the system still possess a lot of liquidity and April-June quarter is a lean
period for credit off takes and hence the interest rates should not move
sharply on an upward trend.
RBI has given indications to act on rates again if Inflation will not
curtail by the current rate hike. Consumer finance loans may rise
marginally but it will not affect much of the growth, as demand for
consumer goods is very strong and may not be impacted by a 25 basis
point hike in key policy rates. Central bank has remained cautious in
increasing rates to ensure that the growth is not hampered while
checking inflationary pressures.
4.2 INDUSTRY ANALYSIS
The forgoing section in this report had a perspective of overall

Economy in India. The next step is to analyze the particular industry.
Once the economic analysis is over; getting the prospects of the likely
trend in the economy, analyzing the industry would be taken importance,
knowing which group are promising in the year makes possible better
entry in to the company. There is however, no perfect correlation
between the economy and the industry on one hand and of industry and
companies on the other.
50
India has mixed economy, where private and public sector play a
complementary role and promote a planned development. Since from
1991 reforms, even foreign enterprises and MNC’s given an important
role to play in the development of the economy.
INDIAN INSURANCE INDUSTRY
Globalization is the key source, which is bringing about an

"irreversible transformation" in the Asian insurance market. India and
China are "dynamically" driving the growth of insurance markets in Asia
and the outlook for this industry in the region is "sanguine" despite short-
term uncertainties. Asia is becoming an important growth engine for
global insurers. The changing socio-economic dynamics present
attractive opportunities. According to a latest research report from HSBC,
in order to be long-term winners, life insurance companies in Asia need to
diversify their income streams such that at least 25% of earnings are
sourced overseas, while maintaining a dominant position in the domestic
market.
The Indian insurance market in spite of having a history covering

almost two centuries took a turn after the establishment of the Life
insurance corporation in India in 1956. From being an open competitive
market to being nationalized and then back to a liberalized market again,
the insurance sector has witnessed all aspects of contest. The Indian
insurance market conventionally focused around life insurance until
recently, a various range of other insurance policies covering sectors like
medical, automobile, health and other classes falling under general
insurance came up, generally provided by the private companies. The life
insurance of India added 4.1% to the GDP of the economy in 2009, an
immense growth since 1999, when the gates were opened for the private
51
company in the market.
Major Driving Factors
• Globalization
• Deregulation which is opening up the markets
• Cheaper and more effective distribution channels
• Ongoing industry consolidation
• Increment in the policy holder firms
• Boost in Merger and Acquisitions activities
• Changing socio-economic dynamics
• Market offering wider margins
• Unique combination of size, age profile and growth prospects
Major Issues, Trends and Opportunities
• Continuous increment in intra-Asian trade

• Need for diversification in the income streams
• Rise in selling investment type products like annuities
• Chance to compete directly with financial services companies
• Focus on paying out more in claims
• Drastic increment in marine and cargo insurance sectors
• Developments in countries, who were closely regulated by their
government
• Lack of proper agent quality
• Change in the distribution method
• Difficulties in building networks and brands
• Hindrance in expansion in some of the emerging markets
• Risk management concerns in insurance companies
• Global Expansion
• Transformation in the organizational system to win customer
loyalty
52
• Weak equity markets

• Impact of sub-prime
• Regulatory and market obstacles in the emerging markets
Life Insurance
The US$ 41-billion Indian life insurance industry is considered the

fifth largest life insurance market, and growing at a rapid pace of 32-34
per cent annually, according to the Life Insurance Council. Since the
opening up of the insurance sector in India, the industry has received FDI
to the tune of US$ 525.6 million. The government is likely to reintroduce
the Insurance Bill, which proposes to increase the FDI cap in private
sector insurance companies from 26 per cent to 49 per cent.
The total number of life insurers registered with the Insurance
Regulatory Development Authority (IRDA) has gone up to 23, with
registration of the India First Life Insurance Company Limited, a joint
venture life insurance company promoted by Bank of Baroda and Andhra
Bank, India and Legal & General Middle East Limited, UK. The Life
Insurance Corporation (LIC) posted a 50 per cent growth in new premium
collection in the first nine months of the 2010 fiscal, increasing its market
share to 65 per cent from 56 per cent a year ago.
LIC’s new premium collection touched US$ 9.58 billion in the April-
December 2009 period while the combined business of the 22 private
insurers grew to US$ 5.07 billion from the previous year, as per data
collated by the Insurance Regulatory and Development Authority (IRDA).
Overall the industry grew at 29 per cent in the April-December period of
the fiscal year 2010.
The life insurance industry had earlier been expected to grow by 15 per
cent in the 2010 fiscal year and cross the US$ 54.1 billion mark in total
premium income by the end of March 2010, according to industry body,
Life Insurance Council.
53
However, industry experts now believe that India's life insurance

industry is likely to grow by around 10 per cent in 2010 over the previous
year, mainly due to increased efficiency but also due to expansion in
small towns and villages.
In order to support the aggressive growth in premium income in the
current financial year, Future Generali India Life Insurance (a joint
venture between the Future Group and the Italy-based Generali Group)
has proposed to infuse an additional equity of US$ 32.55 million before
the end of March 2010.
General Insurance
The total number of general insurers registered with IRDA has

gone up to 22, with the registration of SBI General Insurance Company
Limited, a joint venture general insurance company promoted by State
Bank of India and Insurance Australia Group, Australia, as a general
insurer in December 2009. Moreover, L&T General Insurance is readying
to launch its operations in the next three to five months.
The Gross Premium underwritten by public sector non-life insurers
for the April-December 2009 period posted year-on-year growth of 11.37
per cent as compared to the year-on-year growth of 7.93 per cent posted
by private sector non-life insurers. Overall, the non-life insurance sector
grew 9.95 per cent in April-December 2009, compared to the
corresponding period last year. According to IRDA data, out of the US$
5.46 billion premium underwritten by the industry during the April-
December 2009 period, US$ 3.24 billion came from the four public sector
companies as compared to US$ 2.91 billion during the same period in
2008.
Moreover, in the 2010-11 budget, Finance Minister, Mr. Pranab
Mukherjee, has decided to roll back the government’s decision to tax the
unrealized gains of non-life insurance companies. “The appreciation in
54
the value of investments, being in the nature of unrealized gain is not

taken into account for determining profit or loss of non-life insurance
business as per the IRDA regulations. It is, therefore, proposed that the
unrealized gains due to appreciation in the value of investments will not
be included in the total income,” according to the budget documents.
According to data from the IRDA (Summary Reports of Motor Data
of Public and Private Sector Insurers - 2008-09), in 2008-09, nearly 30
million vehicles were registered and a total premium worth US$ 2.03
billion was collected.
Project Insurance
Insurance companies are also witnessing increasing demand for
project insurance in the last few months. Corporate are beginning to
demand project insurance across sectors such as power generation with
the cover beginning right from the start of the project till it is declared
ready for commercial use. Some of the big projects also take cover for
financial loss arising out of delay in completion.
Industry players estimate that premiums collected from project
insurance will be around US$ 216.2 million for the industry as a whole
and is expected to increase significantly.
• Oriental Insurance Company Ltd will be offering comprehensive
project insurance for the Tata Power Project at Mundra in Gujarat.
Health Insurance
The health insurance market stood at around US$ 1.5 billion in 2008-
09 and is expected to grow to US$ 9 billion by 2016-17. While health
insurance policies are mostly provided by general insurance companies,
life insurers contribute about five per cent to the overall health insurance
business.
• Apollo DKV Health Insurance has renamed itself Apollo Munich
Health Insurance as a part of its five-year strategic plan to gain a
55
five per cent market share. Apollo Munich is a joint venture

between Asia’s largest integrated healthcare provider, The Apollo
Hospitals Group, and Germany-based Munich Re's segment,
Munich Health.
• Max India is planning to invest US$ 43.25 million in its health
insurance joint venture (Max Bupa ) and will launch a product over
the January–June 2010 period.
• Star Health and Allied Insurance expects to invest US$ 38.9
million during the current financial year to grow its health insurance
business, taking the total invested capital to US$ 67 million.
• US-based health insurer CIGNA is looking at entering the Indian
market.
Reinsurance
Reinsurance is a contract between the insurance company
(insurer) and a third party (re-insurer), wherein the latter will protect the
former by paying losses sustained by it under the original contract of
insurance.
Re-insurers from London, as well as other parts of Europe, see significant
potential in the re-insurance market in India. Top four global re-insurers,
Lloyds, Swiss Re, Munich Re and Berkshire Hathaway are amongst
those eyeing India.
Bancasssurance
Private insurers have adopted bancassurance in a much bigger
way than the state-owned Life Insurance Corporation (LIC) in the recent
years. Bancassurance is distribution of insurance products through a
bank's network.
In 2009-10, private insurers forked out US$ 44.4 million as commission
for banassurance, while the payout by LIC for this distribution model was
US$ 25,948.
Investment Policy
56
• The FDI limit in the insurance space for foreign players is capped
at 26 per cent—permissible under the automatic route subject to a
licence from the official regulator, IRDA—but the government is
planning to raise it to 49 per cent and a bill to give effect to the
proposal is pending in the Rajya Sabha.
• IRDA has stipulated that the mandatory ceding by every general
insurer in the country to the national reinsurer – General Insurance
Corporation (GIC), would continue to remain at 10 per cent as
under current regulations.
• IRDA has also allowed insurance companies to offer 'Health plus
Life Combi Product', a policy that would provide life cover along
with health insurance to subscribers.
• Pension Fund Regulatory and Development Authority (PFRDA)
would launch a low-cost pension scheme on April 1, 2010, to
provide social security cover to economically weaker sections like
rickshaw pullers, barbers and daily-wage labourers.
The Road Ahead

Saturation of insurance markets in many developed economies has
made the Indian market more attractive for international insurance
players, according to 'Booming Insurance Market in India (2008-2011)”.
Further, according to the report,
• Total life insurance premium in India is projected to grow US$ 266
billion by 2010-11
• Total non-life insurance premium is expected to increase at a
compound annual growth rate (CAGR) of 25 per cent for the
period spanning from 2008-09 to 2010-11
• The home insurance segment is set to achieve a 100 per cent
growth as financial institutions have made home insurance
obligatory for housing loan approvals
• In the next three years, health insurance is poised to become the
57
second largest business for non-life insurers after motor insurance
With a huge population base and large untapped market,

insurance industry is a big opportunity area in India for national as well as
foreign investors. India is the fifth largest life insurance market in the
emerging insurance economies globally and is growing at 32-34%
annually. This impressive growth in the market has been driven by
liberalization, with new players significantly enhancing product awareness
and promoting consumer education and information. The strong growth
potential of the country has also made international players to look at the
Indian insurance market. Moreover, saturation of insurance markets in
many developed economies has made the Indian market more attractive
for international insurance players, according to "Booming Insurance
Market in India (2008-2011)".
Key Players
The major players discussed in the report include LIC, Bajaj Allianz and
HDFC Standard under life insurance segments, and New India, United
India and ICICI Lombard under non-life insurance segments.
Porters Five Force Model In Insurance Sector
1. Threat of New Entrants. The average entrepreneur can't come

along and start a large insurance company. The threat of new
entrants lies within the insurance industry itself. Some companies
have carved out niche areas in which they underwrite insurance.
These insurance companies are fearful of being squeezed out by
the big players. Another threat for many insurance companies is
other financial services companies entering the market. What
would it take for a bank or investment bank to start offering
insurance products? In some countries, only regulations that
prevent banks and other financial firms from entering the industry.
If those barriers were ever broken down, like they were in the U.S.
58
with the Gramm-Leach-Bliley Act of 1999, you can be sure that the
floodgates will open.
2. Power of Suppliers. The suppliers of capital might not pose a big

threat, but the threat of suppliers luring away human capital does.
If a talented insurance underwriter is working for a smaller
insurance company (or one in a niche industry), there is the
chance that person will be enticed away by larger companies
looking to move into a particular market.
3. Power of Buyers. The individual doesn't pose much of a threat to

the insurance industry. Large corporate clients have a lot more
bargaining power with insurance companies. Large corporate
clients like airlines and pharmaceutical companies pay millions of
dollars a year in premiums. Insurance companies try extremely
hard to get high-margin corporate clients.
4. Availability of Substitutes. This one is pretty straight forward, for
there are plenty of substitutes in the insurance industry. Most large
insurance companies offer similar suites of services. Whether it is
auto, home, commercial, health or life insurance, chances are
there are competitors that can offer similar services. In some areas
of insurance, however, the availability of substitutes are few and
far between. Companies focusing on niche areas usually have a
competitive advantage, but this advantage depends entirely on the
size of the niche and on whether there are any barriers preventing
other firms from entering.
5. Competitive Rivalry. The insurance industry is becoming highly

competitive. The difference between one insurance company and
another is usually not that great. As a result, insurance has
59
become more like a commodity - an area in which the insurance

company with the low cost structure, greater efficiency and better
customer service will beat out competitors. Insurance companies
also use higher investment returns and a variety of insurance
investment products to try to lure in customers. In the long run,
we're likely to see more consolidation in the insurance industry.
Larger companies prefer to take over or merge with other
companies rather than spend the money to market and advertise
to people.
PROSPECTS
⇒ Total life insurance premium in India is projected to grow Rs

1,230,000 Crore by 2010-11.
⇒ Total non-life insurance premium is expected to increase at a
CAGR of 25% for the period spanning from 2008-09 to 2010-11.
⇒ With the entry of several low-cost airlines, along with fleet
expansion by existing ones and increasing corporate aircraft
ownership, the Indian aviation insurance market is all set to boom
in a big way in coming years.
⇒ Home insurance segment is set to achieve a 100% growth as
financial institutions have made home insurance obligatory for
housing loan approvals.
⇒ Health insurance is poised to become the second largest business
for non-life insurers after motor insurance in next three years.
⇒ A booming life insurance market has propelled the Indian life
60
insurance agents into the 'top 10 country list' in terms of

membership to the Million Dollar Round Table (MDRT) - an
exclusive club for the highest performing life insurance agents.
4.3 COMPANY ANALYSIS

After analyzing the economy and the respondent industry that are
taken into consideration now its term of the companies in the insurance
industry and their performance and the environment they are operating
into. Here I have taken 4 companies in insurance industry and analyzing
it. The companies are,
1. ICICI Prudential Life Insurance Company

2. Bajaj Allianz Life Insurance Company Limited
3. New India Assurance Company Limited
4. Birla Sun Life Insurance Company Limited
While analyzing the company the factor considered are SALES AND EPS
of each company. Some valuation ratios also used in some cases.
61
VALUATION RATIOS
♦ CURRENT RATIO =Current Assets /Current Liabilities
♦ Debt to Equity =Total Debt (Short Term +Long Term)/Equity
+Preference
♦ Interest Coverage=Earnings Before Interest And Tax/Interest
4.3.1. ICICI Prudential Life Insurance Company
Incorporation Year 2000

Chairperson Ms.Chanda D. Kochhar
Managing Director Mr.V. Vaidyanathan,
Registered Office ICICI Pru Life Towers,
1089 Appasaheb Marathe Marg,
62
Prabhadevi, Mumbai 400025.
Email
Website www.iciciprulife.com
The Company
ICICI Prudential Life Insurance Company is a joint venture

between ICICI Bank, a premier financial powerhouse, and Prudential plc,
a leading international financial services group headquartered in the
United Kingdom. ICICI Prudential was amongst the first private sector
insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority
(IRDA).
ICICI Prudential Life's capital stands at Rs.4,780 crores (as of

December 31, 2009) with ICICI Bank and Prudential plc holding 74% and
26% stake respectively. For the period April 1, 2009 to September 30,
2009, the company has garnered total received premium new business
premium of Rs 2,128 crores and has underwritten over 10 million policies
since inception. The company has assets held over Rs.53,000 crores as
on December 31, 2009. For the past nine years, ICICI Prudential Life has
retained its leadership position in the life insurance industry with a wide
range of flexible products that meet the needs of the Indian customer at
every step in life.
Distribution
ICICI Prudential Life has one of the largest distribution networks

amongst private life insurers in India. It has a strong presence across
India with 1,960 branches (including 1,096 micro-offices) and an advisor
base of over 230,000 (as on December 31, 2009) .The company has 6
bancassurance partners having tie-ups with ICICI Bank, Jalgaon Peoples
63
Co-op Bank, Ratanagiri District Central Co-op Bank, Ballia Kshetriya Co-
operative Bank, Renuka Nagrik Sahakari Bank, Bhandara Urban Co-
operative Bank
About the Promoters
ICICI BANK
About ICICI Bank: ICICI Bank Ltd (NYSE:IBN) is India's largest

private sector bank and the second largest bank in the country with
consolidated total assets of about US$ 102 billion as of June 30, 2009.
ICICI Bank’s subsidiaries include India’s leading private sector insurance
companies and among its largest securities brokerage firms, mutual
funds and private equity firms. ICICI Bank’s presence currently spans 19
countries, including India.
Prudential Plc
Established in London in 1848, Prudential plc, through its

businesses in the UK, Europe, US, Asia and the Middle East, provides
retail financial services products and services to more than 21 million
customers, policyholder and unit holders and manages over £249 billion
of funds worldwide (as of March, 2009). In Asia, Prudential is the leading
Europe-based life insurer with life operations in China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan,
Thailand, and Vietnam. Prudential is one of the largest asset
management companies in terms of overall assets sourced in Asia ex-
Japan, with £36.8 billion funds under management (as of March, 2009)
and operations in ten markets including China, Hong Kong, India, Japan,
Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates.
TABLE NO-4.3
CAGR SALES OF ICICI PRUDENTIAL
64
Rs’000
YEAR 2009 2008 2007 2006
SALES 3,34,440 21,168 346,062 75,862
CAGR SALES = 63.97%
INTERPRETATION
The above table shows the SALES of ICICI PRUDENTIAL in 2009
is RS.33,44,40,000, in 2008 it was RS.2,11,68,000 ,in 2007 it was
RS.34,60,62,000 and in 2006 it was RS.7,58,62,000
INFERENCE
In terms of SALES of ICICI PRUDENTIAL the higher sales was in 2007

and lower sales was in 2008 and the CAGR SALES is 63.97%
GRAPH NO-4.2
65
TABLE NO-4.4
CAGR EPS OF ICICI PRUDENTIAL
YEAR 2009 2008 2007 2006
EPS -5.5 -10.28 -5.28 -1.82
CAGR EPS = 44.57%
INTERPRETATION
The above table shows the EPS of ICICI PRUDENTIAL in 2009 is

-5.5 in 2008 it was-10.28,in 2007 it was -5.28and in 2006 it was -1.82
INFERENCE
66
In terms of EPS of ICICI PRUDENTIAL the high EPS 2006 was in

2007 and low EPS was in 2008 and the CAGR EPS is 44.57%
GRAPH NO -4.3
TABLE NO-4.5
67
CURRENT RATIO
YEAR 2009 2008 2007 2006
CA 7,174,265 10,711,662 7,183,106 3,580,046
CL 11,303,713 16,081,873 10,061,083 5,934,917
CR 0.634682162 0.66607055 0.713949582 0.603217534
INTERPRETATION
The above table shows the Current Ratio of ICICI PRUDENTIAL in
2009 is 0.6346, in 2008 it was 0.6660,in 2007 it was 0.7139 and in 2006 it
was 0.6032
INFERENCE
In terms of Current Ratio, ICICI PRUDENTIAL is high in 2007 and

lower in 2006
GRAPH NO-4.4
68
TABLE NO-4.6
DEBT EQUITY RATIO
YEAR 2009 2008 2007 2006

DEBT 54035 37935 40393 14247
EQUITY 47801758 37724213 20716828 11850000
DEBT/
EQUITY 0.00113038 0.001005588 0.001949768 0.001202278
INTERPRETATION
The DEBT EQUITY RATIO in 2009 was 0.0011303,in 2008 it was

0.0010055, in 2007 it was 0.0019497, and in 2006 it was 0.0012022
INFERENCE
The high D/E Ratio is in 2007 and lower is in 2008
69
GRAPH NO-4.5
TABLE NO-4.7
INTEREST COVERAGE RATIO
70
YEAR 2009 2008 2007 2006

PBIT -47258763 -46042734 -23611574 -11840436
INTEREST 256924 117134 267100 165786
PBIT/ -71.41999
INTEREST -183.94063 -393.07744 -88.39975
INTERPRETATION
The Interest coverage ratio in 2009 was -183.94,in 2008 it was -393.077,
in 2007 it was -88.399 and in 2006 it was -17.419
INFERENCE
Low Interest Coverage ratio (<2) is perceived to have a high degree of

financial risk. Therefore ICICI PRUDENTIAL is at a high financial risk in
all the four years
GRAPH NO-4.6
4.3.2.BAJAJ ALLIANZ Life Insurance Company Limited
71
Chairman Mr.Rahul Bajaj

Company Secretary Sameer Bakshi
Registered Office Bajaj Allianz Life Insurance Company
Limited
Grnd floor, G.E Plaza, Airport Road
Yerawada,Pune-411006
Email life@bajajallianz.co.in
Website www.bajajallianz.co.in
Bajaj Allianz Life Insurance Company Limited engages in life

insurance business in India. It offers unit linked insurance products,
including regular and single premium; pension products, such as annuity
and retirement; endowment and money back products; protector, term
care, and risk care term plans; women insurance; health insurance; non
employer employee and employer employee insurance products; and
other products, such as children plans, family assure, fortune plus, capital
shield, and micro insurance. The company was founded in 2001 and is
headquartered in Pune, India. Bajaj Allianz Life Insurance Company
Limited is a subsidiary of Bajaj Holdings and Investment Limited.
Bajaj Allianz Insurance started its journey on May 2, 2001 when it

received the certificate of Registration from Insurance Regulatory and
Development Authority (IRDA) for conducting General Insurance
business in India including Health Insurance. As on the end of March
2009, the income of Bajaj Allianz Insurance went up to Rs.2,866 crores
with a growth of 11% over the previous year. It also registered a net profit
of Rs.95 crore, highest by any private insurer, in the last financial year.
Bajaj Allianz Life Insurance is a union between Allianz SE, one of the
largest Insurance Company and Bajaj Finserv.
72
Allianz SE is a leading insurance conglomerate globally and one

of the largest asset managers in the world, managing assets worth over a
Trillion (Over INR. 55, 00,000 Crores). Allianz SE has over 115 years of
financial experience and is present in over 70 countries around the world.
At Bajaj Allianz Life Insurance, customer delight is our guiding principle.
Our business philosophy is to ensure excellent insurance and investment
solutions by offering customized products, supported by the best
technology.
According to the company's annual report 2007-08, the company
tops in collection of new business premium as well as the policies sold. It
wrote a new business of Rs.66,745 million as against Rs.43,027 million in
2006. The insurer has a market share of 7 per cent as against 5.7 per
cent in 2006.
TABLE NO-4.8
Accelerated Growth of Bajaj Allianz
73
Fiscal Year No. of policies sold New Business in FY
2001-
21,37 Rs.7 cr.
2002(6mths)
2002-2003 1,15,965 Rs.63.3 cr.
2003-2004 1,86,443 Rs.180 cr.
2004-2005 2,88,189 Rs.857 cr.
2005-2006 7,81,685 Rs.2,717 cr.
2006-2007 20,79,217 Rs.4,302 cr.
2007-2008 37,44,742 Rs.6,674 cr.
TABLE NO -4.9
CAGR SALES OF BAJAJ ALLIANZ
Rs.’000
YEAR 2009 2008 2007 2006
SALES 964,050 1,239,486 929,389 668,239
CAGR SALES = 12.99%
INTERPRETATION
The above table shows the sales of BAJAJ ALLIANZ in 2009 was
RS.96,40,50,000 ,in 2008 it was RS.1,23,94,86,000, in 2007 it was
RS.92,93,89,000 and in 2006 it was RS.66,82,39,000
74
INFERENCE
In terms of sales of BAJAJ ALLIANZ, the higher sales was in 2008 and
lower sales was in 2006 and the CAGAR SALES is 12.99%
GRAPH NO- 4.7
TABLE NO-4.10
CAGR EPS FOR BAJAJ ALLIANZ
YEAR 2009 2008 2007 2006
75
EPS 8.63 9.59 6.85 4.69
CAGR EPS =22.54%
INTERPRETATION
The above table shows the EPS of BAJAJ ALLIANZ in 2009 was 8.63,in
2008 it was 9.59, in 2007 it was 6.85 and in 2006 it was 4.69
INFERENCE
In terms of EPS of BAJAJ ALLIANZ, the high EPS was in 2008 and lower
EPS was in 2006 and the CAGAR EPS is 22.54%
GRAPH NO-4.8
TABLE NO-4.11
CURRENT RATIO
76
Year 2009 2008 2007 2006
Current
assets 8,295,295 5,288,350 3,358,711 2,646,097
Current
liabilities 14,495,261 10,104,661 7,016,903 4,081,074
Current ratio 0.572276346 0.523357488 0.47866003 0.648382509
INTERPRETATION
The above table shows the Current Ratio of BAJAJ ALLIANZ in

2009 was 0.5722,in 2008 it was 0.5233, in 2007 it was 0.4786 and in
2006 it was 0.6483
INFERENCE
In terms of Current Ratio of BAJAJ ALLIANZ, the higher is in 2006 and

lower is in 2007
GRAPH NO-4.9
77
TABLE NO -4.12
DEBT EQUITY RATIO
YEAR 2009 2008 2007 2006

DEBT 0 0 0 0
EQUITY 6724719 5773150 4034165 2670720
DEBT/EQUITY - - - -
INFERENCE
There is no debt –equity ratio, therefore the company has no financial

problem.
TABLE NO-4.13
78
YEAR 2009 2008 2007 2006

PBIT 3911618 2965405 1935565 1184287
INTEREST 492334 335559 205122 98061
PBIT/
INTEREST 7.94504949 8.8372089 9.4361648 12.077043
INTERPRETATION
The Interest coverage ratio in 2009 was 7.94,in 2008 it was 8.83, in 2007
it was 9.43 and in 2006 it was 12.07
INFERENCE

financial risk. Therefore in BAJAJ ALLIANZ all the four years it was >2
therefore the company is in a good financial condition
GRAPH NO-10
4.3.3.NEW INDIA ASSURANCE COMPANY LIMITED
Chairman M.Ramadoss
79
Company Secretary A R Sekar
Registered Office New India Assurance Company building
87, Mahatma Gandhi Road ,Fort
Mumbai-400001
Email nia25@vsnl.com
Website www.newindia.co.in
Established by Sir Dorab Tata in 1919, New India is the first

fully Indian owned insurance company in India. New India is a pioneer
among the Indian Companies on various fronts, right from insuring the
first domestic airlines in 1946 to satellite insurance in 1980. With a wide
range of policies New India has become one of the largest non-life
insurance companies, not only in India, but also in the Afro-Asian region.
Gross Premium (in India) of Rs.5508.20 cores in the year
2008-2009, as against Rs. 5276.91 in the year 2007-2008. Assets
Rs.27444.57crores as on 31st March 2007. Network of Offices-26
Regional Offices, 393 Divisional Offices, 614 Branches and 34 Direct
Agent Branches. Rank No.1 in the Indian market. Largest Non-Life
insurer in Afro-Asia excluding Japan. First Indian Non-life Company to
cross Rs.5000crores Gross Premium. Global Re-insurance facilities.
Over-seas presence in countries like Japan, U.K, Middle East, Fiji and
Australia. Gross Direct Premium has increased from Rs.6151.46crs. (07-
08) to Rs.6455.78crs.(08-09) registering a growth of 4.95% (08-09) as
against 3.62% growth registered during 07-08.
FOREIGN OPERATIONS
The Gross Premium is a Rs.1376.90 core in 2008-09 as against
Rs.1143.63 crores in 2007-08 showing an accretion of 20.4%. The Net
80
Premium is Rs.1164.28 crores in 2008-09 as against Rs.932.07 cores in

2007-08 showing an increase of 24.9%. Our operations in Saudi Arabia
show premium income up to August 2008 only as we had stopped
functioning as an Agency and are operating as an Associate Company in
Saudi Arabia.
Foreign operations show underwriting profit of Rs.78.08crores in
2008-09 as against underwriting loss of Rs.70.07 crores in 2007-08. The
underwriting profit is after a provision of Reserve Strain of Rs.121.17
crores in 2008-09 in respect of unexpired risks. No major claims were
reported during the year. The foreign exchange earning during the year
2008-09 amounted to Rs8.62 crores towards dividend and repatriation of
management fees from our Associate and Subsidiary companies.
Overseas operational result for the year ended 31st March 2009 is as
under: (Rupees in Crores)
TABLE NO-4.14
CAGR SALES OF NEW INDIA ASSAURANCE COMPANY
Rs.’000
YEAR 2009 2008 2007 2006

81
SALES 877927 292325 161459 152161

CAGR SALES = 79.35%

INTERPRETATION
The above table shows the sales of NEW INDIA ASSURANCE in
2009 was RS.87,79,27,000,in 2008 it was RS.29,23,25,000, in 2007 it
was RS.16,14,59,000 and in 2006 it was RS.15,21,61,000
INFERENCE
In terms of sales of NEW INDIA ASSURANCE, the higher sales was in

2009 and lower sales was in 2006 and the CAGAR SALES is 79.35%
GRAPH NO-4.11
82
TABLE NO-4.15
CAGR EPS FOR NEW INDIA ASSAURANCE COMPANY
YEAR 2009 2008 2007 2006
EPS 11.21 70.06 73 35.82
CAGR EPS = 32.10%
INTERPRETATION
The above table shows the EPS of NEW INDIA ASSURANCE in

2009 was 11.21,in 2008 it was 70.06, in 2007 it was 73 and in 2006 it
was 35.82
INFERENCE
83
In terms of EPS of NEW INDIA ASSURANCE ,the high EPS was in 2007
and lower EPS was in 2009 and the CAGAR EPS is 32.10%
GRAPH NO-4.12
TABLE NO-4.16
CURRENT RATIO
84
YEAR 2009 2008 2007 2006
CA 83878540 65281059 54082391 52898303
CL 89761083 77620843 76047865 71347424
CR 0.934464438 0.841024865 0.711162516 0.741418541
INTERPRETATION
The above table shows the Current Ratio of NEW INDIA

ASSURANCE in 2009 was 0.93.44,in 2008 it was 0.8410, in 2007 it was
0.7111 and in 2006 it was 0.7414
INFERENCE
In terms of Current Ratio of NEW INDIA ASSURANCE, the higher is in

2009 and lower is in 2007
GRAPH NO-4.13
85
TABLE NO-4.17
DEBT EQUITY RATIO
YEAR 2009 2008 2007 2006

DEBT 5938624 6577647 7454533 7865186
EQUITY 73221519 69728035 60201558 48080308
DEBT/
EQUITY 0.0811049 0.0943328 0.1238262 0.1635843
INTERPRETATION
The above table shows the D/E Ratio of NEW INDIA
ASSURANCE in 2009 was 0.0811,in 2008 it was 0.0943, in 2007 it was
0.1238 and in 2006 it was 0.1635
INFERENCE
The high D/E Ratio of NEW INDIA ASSURANCE was in 2006 and low
D/E Ratio was in 2009
GRAPH NO -4.14
86
TABLE NO-4.18
YEAR 2009 2008 2007 2006

PBIT 4531919 14011281 11176571 5457853
INTEREST 5426859 4986562 4208621 3642405
PBIT/ 2.6556373
INTEREST 0.83509061 2.8098078 2 1.49842013
INTERPRETATION
The Interest coverage ratio in 2009 was 0.8350,in 2008 it was 2.809, in
2007 it was 2.655 and in 2006 it was 1.498
INFERENCE

financial risk. Therefore NEW INDIA ASSURANCE faced a financial risk
in 2009 and 2006
87
GRAPH NO-4.15
4.3.4. Birla Sun Life Insurance Company Limited
88
Managing Director Mr. Ajay Srinivasan
General Manager Mr. Sanjiv Bhasin
Registered Office Birla Sun Life Insurance Company Limited,
One India bulls Centre,
Tower 1, 15th & 16th Floor, Jupiter Mill

Compound,
841,Senapati Bapat Marag,
Elphinstone Road Mumbai- 400013
Website www.Insurance.birlasunlife.com
Established in 2000, Birla Sun Life Insurance Company Limited

(BSLI) is a joint venture between the Aditya Birla Group, a well known
and trusted name globally amongst Indian conglomerates and Sun Life
Financial Inc, leading international financial services organization from
Canada. The local knowledge of the Aditya Birla Group combined with
the domain expertise of Sun Life Financial Inc., offers a formidable
protection for its customers’ future.
With an experience of over 9 years, BSLI has contributed

significantly to the growth and development of the life insurance industry
in India and currently ranks amongst the top 5 private life insurance
companies in the country. Known for its innovation and creating industry
benchmarks, BSLI has several firsts to its credit. It was the first Indian
Insurance Company to introduce “Free Look Period” and the same was
made mandatory by IRDA for all other life insurance companies.
Additionally, BSLI pioneered the launch of Unit Linked Life Insurance
89
plans amongst the private players in India. To establish credibility and

further transparency, BSLI also enjoys the prestige to be the originator of
practice to disclose portfolio on monthly basis. These category
development initiatives have helped BSLI be closer to its policy holders’
expectations, which gets further accentuated by the complete bouquet of
insurance products (viz. pure term plan, life stage products, health plan
and retirement plan) that the company offers. Add to this, the extensive
reach through its network of 600 branches and 1,75,000 empanelled
advisors.
This impressive combination of domain expertise, product range,

reach and ears on ground, helped BSLI cover more than 2 million lives
since it commenced operations and establish a customer base spread
across more than 1500 towns and cities in India. To ensure that our
customers have an impeccable experience, BSLI has ensured that it has
lowest outstanding claims ratio of 0.00% for FY 2008-09. Additionally,
BSLI has the best Turn Around Time according to LOMA on all claims
Parameters. Such services are well supported by sound financials that
the Company has. The AUM of BSLI stood at Rs. 8165 crs as on
February 28, 2009, while as on March 31, 2009, the company has a
robust capital base of Rs. 2000 crs.
TABLE NO-4.19
CAGR SALES OF BIRLA SUN LIFE INSURANCE COMPANY LIMITED
90
RS.’000
YEAR 2009 2008 2007 2006
SALES 286159 260674 153828 93606
CARG SALES = 45.1
INTERPRETATION
The above table shows the sales of BIRLA SUNLIFE in 2009 was
RS.28,61,59,000, in 2008 it was RS.26,06,74,000, in 2007 it was
RS.15,38,28,000 and in 2006 it was RS. 9,36,06,000
INFERENCE
In terms of sales of BIRLA SUNLIFE, the higher sales was in 2009

and lower sales was in 2006 and the CAGAR SALES is 45.15%
GRAPH NO-4.16
91
TABLE NO-4.20
CAGAR EPS OF BIRLA SUN LIFE INSURANCE COMPANY LIMITED
YEAR 2009 2008 2007 2006
EPS -4.44 -5.11 -2.58 -1.57
CAGR EPS = 41.41
INTERPRETATION
The above table shows of EPS of BIRLA SUNLIFE in 2009 was
-4.44,in 2008 it was -5.11, in 2007 it was -2.58 and in 2006 it was -1.57
INFERENCE
In terms of EPS of BIRLA SUNLIFE, the high EPS was in 2006
92
and low EPS was in 2008 and the CAGAR EPS is 41.41%
GRAPH NO-4.17
TABLE NO-4.21
93
CURRENT RATIO
YEAR 2009 2008 2007 2006
CA 6234018 4827288 2418278 1204597
CL 7399580 5385957 3089879 1607110
CR 0.842482681 0.89627303 0.782644887 0.749542346
INTERPRETATION
The above table shows of Current Ratio of BIRLA SUNLIFE in
2009 was 0.8424, in 2008 it was 0.8962, in 2007 it was 0.7826 and in
2006 it was 0.7495
INFERENCE
In terms of Current Ratio of BIRLA SUNLIFE, the higher is in 2008 and

lower is in 2006
GRAPH NO-4.18
94
TABLE NO -4.22
DEBT EQUITY RATIO
YEAR 2009 2008 2007 2006

DEBT 223516 149932 81639 20249
EQUITY 19995000 12745000 6715000 4600000
DEBT/
EQUITY 0.01117859 0.01176398 0.01215770 0.00440195
INTERPRETATION
The above table shows the D/E Ratio of BIRLA SUNLIFE in 2009
was 0.01117,in 2008 it was 0.01176, in 2007 it was 0.01215 and in 2006
it was 0.0044
INFERENCE
The high D/E Ratio of BIRLA SUNLIFE was in 2007 and lower was in
95
2006
GRAPH NO-4.19
TABLE NO-4.23

96
YEAR 2009 2008 2007 2006

PBIT -23570002 -13842368 -5997165 -3753456
INTEREST 301761 200110 157061 107270
PBIT/
INTEREST -78.108178 -69.173794 -38.183667 -34.99073
INTERPRETATION
The Interest coverage ratio in 2009 was -78.108,in 2008 it was -69.17, in
2007 it was -38.18 and in 2006 it was -34.99
INFERENCE

financial risk. Therefore BIRLA SUNLIFE is in a high financial risk
GRAPH NO-4.20
97
CHAPTER -5
SUMMARY OF FINDINGS,
CONCLUSION
AND
SUGGESTIONS
5.1 FINDINGS
Now at the final the following facts emerge from the study of insurance
98
sector for selecting appropriate company through analyzing economy,

industry and companies
⇒ When come to the economic factor the global economies are

getting interrelated, the Indian market will no longer be limited to
domestic economic situation.
⇒ Agricultural growth rate and the monsoon both have direct

influence on insurance and responsible for the economy to
become prospers.
⇒ With the entry of several low-cost airlines, along with fleet

expansion by existing ones and increasing corporate aircraft
ownership, the Indian aviation insurance market is all set to boom
in a big way in coming years.
⇒ Home insurance segment is set to achieve a 100% growth as

financial institutions have made home insurance obligatory for
housing loan approvals.
⇒ Health insurance is poised to become the second largest business

for non-life insurers after motor insurance in next three years.
5.2 CONCLUSION
99
Fundamental analysis always holds good only if the company

statement are revealed clearly and analyzed properly. Investment is
serious business and not making decision on vague. Fundamental
analysis has a direct impact on insurance market.
Competition will surely cause the market to grow beyond current

rates, create a bigger "pie," and offer additional consumer choices
through the introduction of new products, services, and price options. Yet,
at the same time, public and private sector companies will be working
together to ensure healthy growth and development of the sector.
Challenges such as developing a common industry code of conduct,
contributing to a common catastrophe reserve fund, and chalking out
agreements between insurers to settle claims to the benefit of the
consumer will require concerted effort from both sectors. The market is
now in an evolving phase where one can expect a lot of actions in coming
days.
The current impediments for foreign participation – like 26% equity

cap on foreign partner, ill defined regulatory role of IRDA (Insurance
Regulatory development Authority- the watchdog of the industry) in
pension business etc.—are expected to be removed in near future. The
early-adopters will then have a clear advantage compared to laggards in
gaining the market share and market leadership. They will need to make
sure right now that all their infrastructure is in place so that they can reap
the benefit of an "unlimited potential."
SUGGESTIONS
100
• Insurance companies have lot of opportunities to grow. So

investing in these types of industries help the investors at long run.
• Before investing in any company, it’s required to implement all the

data and financial results.
• Much of the demand may not be accessible because of poor

distribution, large distances or high costs relative to returns.
• There is a tendency to target the business of existing companies
rather than expanding the market. New players find it easier to try
to capture existing customers by offering better service or other
advantages.
101
BIBLIOGRAPHY
102
BIBLIOGRAPHY
NEWS PAPERS
Economic Times
Business Standard
Financial Express
BOOKS
Prasanna Chandra, 2009, Investment Analysis And Portfolio

Management, Third edition, Tata McGraw-Hill publishing company ltd.
WEBSITES
www.economywatch.com
www.iciciprulife.com
www.bajajallianz.co.in
www.newindia.co.in
www.insurance.birlasunlife.com
www.iloveindia.com
ANNEXURE
103

Fundamental Analysis and Its Impact On Insurance Sector

Caricato da

Informazioni sul documento

Descrizione originale:

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Fundamental Analysis and Its Impact On Insurance Sector

Caricato da

Copyright:

Formati disponibili

A Study On Fundamental Analysis And Its Impact On Insurance Sector

Insurance sector in India is one of the booming sectors of the

The total life insurance premium in India is projected to grow Rs

This study focuses on fundamental analysis and it will help me to

Finally, the conclusion drawn was that fundamental analysis always

Insurance is defined as the contract between Insurance co.

Insurance sector in India is one of the booming sectors of the

The origin of life insurance in India can be traced back to 1818

By 1938, there were 176 insurance companies in India. But a

provided strict State Control over insurance business.

Insurance sector in India grew at a faster pace after independence.

The (non-life) insurance business/general insurance remained with

The General Insurance Business (Nationalizations) Act, 1972

In 1993, the first step towards insurance sector reforms was

Since 1956, with the nationalization of insurance industry, the

INTRODUCTION OF FUNDAMENTAL ANALYSIS

Fundamental analysis is an important part of learning to

A method of evaluating a security by attempting to measure

Economic analysis is a process whereby strengths and

cover a number of important economic issues that keep cropping up

The Indian economy is one of the fastest growing economies in

Ultimately, investor must make intelligent judgment about the current

Economic policies: This is the major variable affecting the stock

Fiscal policies: Measures employed by governments to stabilize

affect the entire corporate sector.

A market assessment tool designed to provide a business with an

• Implications of plan priorities and plan expenditures for various

• Implication of industrial and fiscal policies of the government for an

• Degree of dependence on scarce non-renewable or imported

• Vulnerability of industry to business cycle.

• Linkage between the sectors vulnerable to business cycle and the

• Life cycle position of industry.

• Price and income elasticity of end product of industry.

• An analysis of competitive conditions is reflected in barriers to

After understanding the linkages between Economy and Industry

Strategic consideration of Company Analysis

• A trend analysis of company’s market share.

• An analysis of cost structure and BEP analysis.

• An analysis of turnover of assets, operating and production

• Leverage and coverage ratio analysis.

• Fund flow analysis.

• A trend analysis of book value per share.

• An assessment of the quality of the asset.

• An assessment of the quality of management.

2.1 TITLE OF THE STUDY

“A STUDY ON FUNDAMENTAL ANALYSIS AND ITS IMPACT ON

2.2 REVIEW OF LITERATURE

1.A study done by THE GENEVA ASSOCIATION (SYSTEMIC RISK IN

2. A study done by Dr.B.Vijaylakshmi. “Impact of Globalization:

insurers is higher than among reinsurers.

The study entitled ” A study on fundamental analysis and its impact

2.4 OBJECTIVES OF THE STUDY

• To find out the factors affecting insurance industry

• To study the performance of various insurance company

• To study the movement of stock prices of insurance companies

2.5 SCOPE OF THE STUDY

2.6 OPERATIONAL DEFINITION OF THE CONCEPT

The periodic payment made on an insurance policy is called premium

A contract of insurance describing the term coverage, premium, and

Polices designed to provide a benefit in the event of specified event,

Economic analysis refers to the analysis of the factors or indicators of the

The merging to various degrees of the economies and economic policies