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PROJECT MANAGEMENT

SWOT Analysis of
RELIANCE GENERAL INSURANCE

Presented By:
Group -1

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ADA Reliance
Group

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BUSINESS UNIT VALUATION

BUSINESS UNIT VALUATION

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Ratios highlighting profitability of the
RGIC
Year 2007-08 Ratios
Gross Profit Ratio -15%
Net Profit Ratio -17%
Operating 29%
Expenses Ratio
ROI 11.27%
ROE -34%
EPS -15.92
Dividend Per -
Share*
* No dividend has been recommended by the Directors of the company this year
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Strengths
• RGIC is second among private players after ICICI
Lombard GI
• India’s first insurance company to be awarded the
ISO 9001:2000 certification
• Net worth has increased up to Rs.4.94 billions
doubled from last year’s Rs.2.59 billions
• Excellent outreach with a large distribution network
• Reserves and Surplus has increased five times to
Rs.4.998 billion from Rs.1.04 billion previous year
2007
• Exclusive bancassurance tie-up with annual
business of Rs.130-145 crore.
• RGIC has been able to give highest ROI of 11.27% in
last five years.
• RGIC commands 17% of the Private Sector Share &
7% share of the General Insurance Industry
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Weaknesses

• Earning per share is Rs. -15.92 (previous year


Rs.0.16)
• Sudden expansion this year by establishing more
than 125 branches has increased operations and
administration expenses due to which losses
incurred.
• There is no technical support of the foreign
principals as RGIC is not having any foreign tie-up
as other players have.
• All the inner facts and factors known to the family
member cum competitor company headed by
Mukesh Ambani.
• Overdependence on fellow subsidiaries for various
supplies.
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Opportunities

• De-tariff
– IRDA removed controls on pricing in General Insurance business
with effect from 1st January, 2008
• The industry is going to be freed from product
wordings and policy wordings
• Can become market leader as presently it is no. 2
position
• General insurance industry in India has grown at
15% CAGR in terms of gross premium collection

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Threats
• New Entrants
– Future General India Life Insurance Company Limited -Sep.
2007
– IDBI Fortis Life Insurance Company Ltd. –Dec 2007
– Bharti Axa General Insurance Company Ltd. -June 2008
• Many foreign bank giants are going to enter Indian
market. They have very large portfolio of various
verticals and products with them
• New tie-ups by the competitors viz.
– Online travel portal cleartrip ties up with Tata AIG to offer travel
insurance
– ICICI Prudential inks pact with Suvidha Infoserve

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