FINANCIAL ANALYSIS OF

AMIT KUMAR 3020070044 RR1709B34 BBA-MBA(5TH)

Contents
About insurance. Some major players in private sector. About ICICI prudential life insurance co. Products. Achievements Financial management. Financial comparison with other company. My work. Objective of the study. Sources of finance. Financial analysis of company. Findings. Limitations. Recommendations.

Insurance
Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss.

Major players

Joint venture b/w ICICI bank & prudential life insurance company. ICICI bank has 76% of stake & rest is of prudential. ICICI bank is Indias 2nd largest bank.

Prudential is international headquarter in U.K.

financial

service

group

having

It started its operations in December 2000, after getting approval by IRDA & today this is the no. 1 co. in private sector in India.

ICICI Prudential Life is all about

Total Protection

Life

Recent achievement

unaudited earnings Rs. 36,340 million. Partnership with McLeod Russel India. Company has opened new 1375 offices in 2008. India's Most Customer Responsive Insurance Company. Prudence Customer Centricity Award 2007 & 2008 Prudential Corporation Asia.

products ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at
every life stage. Its products cab is enhanced with up to 6 riders, to create a customized solution for each policyholder.
Products -Savings Solutions. -Protection Solutions. -Child Solutions. -Market-linked Solutions. -Retirement Solutions.

-Health solutions.

Riders -Accident & disability benefit -Accident benefit -Critical Illness Benefit -Major Surgical Assistance Benefits -Income Benefit -Waiver of Premium

Financial management of ICICI prudential

Finance function in ICICI Prudential is committed to create an infrastructure that is aligned to shareholder expectations. Basically it includes four functions:
Preparation and maintenance of financial records. Funds management. Expense processing. Treasury operations.

Allocation charges
Contribution related charges. Administrative charges. Fund management charges. Mortality charges. Rider charges. Surrender charges. Bid offer charges. Transactional specific charges.

Financial comparisons with competitors

My work
Preparation for IRDA exam. Cleared IRDA exam. Attending AIP classes. Telecalling. Selling policies.

Objectives of the Study

To know the financial position of the company using ratios. To see the change of the companys assets and liability from 2007 to 2008 using comparative and common size statement. To find out the sources used by the company to finance their activities.

Sources of fund
Equity shares is Rs. 326,277 Million which is 67%of total assets. Debt is Rs. 160,458 Million which is 33% of total assets.

Common size balance sheet

The current liability and provisions have increased from 2.40% to 3.59%. The loan and advances has decreased from 0.12% to 0.06%.

Current assets has increased by 6.00%.

Comparative balance sheet

Reserves and surplus has increased by Rs. 161193 which is 54%. Cash and bank balance has increased by 21.75%.

Current liability have increased by 38.14%.

Provision have increased by 62.66%.

 This ratio tells us about the ability of the company to payoff its current liability using current assets.

Current ratio

0.68 0.66

0.64
0.62 0.6 0.58 0.56 0.54

2008

2007

 It is the ratio which tells us about how much net profit is generated by sales.
0

Profitability ratio
2007 2008

-0.2 -0.4

-0.6
-0.8 -1

 This ratio tells us what is the companys position to pay off its total debt through its total asset.

Debt ratio

1 0.8 0.6

0.4
0.2 0

2008

2007

 This ratio indicates relation between the net income generated and the total assets.

Return ratio
2008 2007

0 -0.02 -0.04 -0.06 -0.08 -0.1

Findings
More charges is taken from customers. Company may face problems to pay their short term liability.

Company was not earning the profit till 2008.

Company is doing better this year as compare to previous year.

limitations
Limited time. Company doesnt provide annual report. Lack of accurate data. No cooperation by financial department to trainee.

Swot analysis

 Brand image

Strength

Money power,
larger network branches,

large portfolio (in built fund hedge),

price competitive products and

low upfront charge

Weakness

Little product differentiation. Most of the plans too complicated to understand. More centered in urban areas. More allocation charges.

Opportunity
Insurance coverage both to the parent & children in one plan. Leverage the customer base of bancassurance partner. Rural market.

Threats
Players like Bajaj Allianz with low premium for same plan. LIC offering huge surplus in life fund.

New entrance.

Recommendations
Company should care about fund management so that it can do better in future. Should take less charges from customers.

Should provide annual report.

Should cooperate with trainee & give proper knowledge to them.