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Insurance is a legal contract that protects people from the financial costs those results from loss of life, loss of health, lawsuits, or property damage. Insurance provides a means for individuals & society to cope up with some of the risks faced in everyday life by everybody. People purchase contracts of insurance, called a Policy, from various insurance companies. Almost every person existing in this world is associated with insurance, directly or indirectly. Directly, in the sense that he/she has insured his/her life by some kind of insurance policy from any company. Indirectly, in the sense they must have insured the assets of their own for example their house, car, or anything else. Insurance can be divided into three categories. 1. Life Insurance 2. General Insurance 3. Health Insurance. Life insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified intervals or at unfortunate death. The contract also provides for payment of premium periodically to the corporation by the assured.
General insurance includes many areas of insurance like marine, motor, engineering, health, fire, etc. The contract provides for the payment of an amount on the happening of some contingency. These types of contracts are annual in nature.
OVERVIEW OF INDIAN INSURANCE MARKET
The insurance landscape in India is undergoing a tectonic shift. Despite its more than teeming one billion populations, India still has a low insurance penetration of 1.95 percent, 51st in the world. Although India boasts a saving rate of around 25 percent, less than 5 percent is spent on insurance. With the entry of competition, the rules of the game have begun to change. The market is already beginning to witness a wide array of products from players whose number is set to grow. In such a scenario, the differentiators among the different players s products, pricing & service. What really increases the appeal of insurance is the benefit of protection of lives & assets from insurance products. Only 22% of the insurable population possesses life insurance. What’s more, in a country over billion people, life insurance premium forms only 1.8% of GDP indicate the extent of underinsurance. Recognizing the huge potential of the market & the need to make insurance, particularly the life insurance, available on a wider scale, the government opened the industry to private players in 1999 and was flooded with applications. Major international insuresPrudential & Standard life of UK, Sun Life of UK, Sun life of Canada & AIG, MetLife & New York Life of the US, to name a few-tied up with leading companies of India to reach out this vast market.
Today, the Indian Insurance industry has a dozen of private players, each of which are making strides in raising awareness level, introducing innovative products & increasing the penetration of life insurance in the vastly underinsured country. The success of effort is noteworthy –private insurers captured nearly 9 percent of new business premium income in two years of operations. The biggest beneficiary of the competition amongst the life insurers is the consumer. A wide range of products, customer focused service & professional advice has become the mainstay in the industry. It is seen a dramatic increase in customer awareness, with penetration cutting across the socio-economic class & attracting people who have never purchased insurance before. With the heightened awareness comes a willingness to evaluate life insurance as an integral part of financial planning kit a significant change n earlier attitude, where insurance is purchased as a tax saving pool. Not only has there been shift in the perception of life insurance, but also the way t s sold. From being a purely advisors driven business, the sector has seen the emergence of a number of channels, including bank assurance, corporate agents & direct marketing. These channels though very new, are quickly gaining importance because they present customers multiple ways of approaching life insurers. There is also a huge improvement in service attitude & delivery making a customer a focus of each initiative. Technology has come to aid giving the platform, the reach & the ability to service each customer seamlessly. Multiple touch points have emerged – contact centers, email, facsimile, websites, snail-mails etc.
As the market matures. 4 .843 The other major change is the introduction of liquid. While such products are more complex. are over. transparent & flexible policies. realistically. there s a distinct set of investors who find such products appealing. the demand for unit link & related products will only increase. Products are now priced flexibly. with linked products leading the brigade. there are two trends that stand out.343 2001-02 297 14. The days of high guaranteed return products. LIC of India has witnessed a decline in first year premium in FY03 while private players have witnessed a more than threefold premium growth because of reduction of guaranteed return products. CR) Private Players LIC of India 2002-03 982 11. sustain ably.On the products front. First yr premium income (Rs.
is a joint venture between New York Life. 5 . 1 Dr.4 crore. integrity and teamwork. Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. 104) Max New York Life Insurance Company Ltd. knowledge. which is more than the norm laid down by IRDA. In line with its vision to be the most admired life insurance company in India. caring. The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business. The Company's paid up capital is Rs. New Delhi . Okhla. a Fortune 100 company and Max India Limited.) (Registered Office: Max House. one of India's leading multi-business corporations. honesty. Jha Marg. 907. In line with its values of financial responsibility. The company has positioned itself on the quality platform. it has developed a strong corporate governance model based on the core values of excellence.COMPANY PROFILE MAX NEWYORK LIFE INSURANCE CO. LTD (Max new York life insurance is partnership between Max India ltd.110020 IRDA Registration No.(74%) and New York life insurance (26%).
which comprises four stages screening. Max New York Life invests significantly in its training programme and each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. direct sales force involving group insurance and telemarketing opportunities. rural business. the company is spearheading a major thrust into additional distribution channels to further grow its business. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. Having set a best in class agency distribution model in place. The agent advisors are trained in-house to ensure optimal control on quality of training. psychometric test. 337 agent advisors have qualified for the Million Dollar Round Table (MDRT) membership in 2007. MDRT is an exclusive congregation of the world’s top selling insurance agents and is internationally recognized as the standard of excellence in the life insurance business. career seminar and final interview. The company is using a five-pronged strategy to pursue alternative channels of distribution. banc assurance and corporate alliances. Training is a continuous process for agents at Max New York Life and ensures development of skills and knowledge through a structured programme spread over 500 hours in two years.ax New York Life has identified individual agents as its primary channel of distribution. The Company places a lot of emphasis on its selection process. 6 . These include the franchisee model.
Max New York Life offers a suite of flexible products. HISTORY : The story of Max is the story of Enterprise. We have grown with a 'hands on' approach. Our mature businesses enjoy leadership positions in their area of activity. has emerged as a distinguished organization. Each of these. With the building blocks of Enterprise. Knowledge. Enterprise and Knowledge have led us to find the 'new' through the 'unknown'. our emerging businesses are well on their way to creating industry benchmarks. To recognize human capital as our most vital resource and our greatest intrinsic worth. We have tempered Enterprise with Knowledge. to create business acumen and culture. This has led us to believe in People. Perseverance. and Credibility. and People. It now has 43 life insurance products and 8 riders that can be customized to over 800 combinations enabling customers to choose the policy that best fits their need. we have created diverse businesses from the ground up. Credibility with Values and Operating Principles. uniquely our own. Perseverance with Systems and Processes. energized our life. and continue to define our path forward. 7 . These have enabled our birth.
which you can use during your lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan.VISION: To be one of the India’s most admired corporate for service excellence MISSION: Establish niche services businesses in life insurance. PRODUCTS OF MNYL WHOLE LIFE INSURANCE Whole Life Participating Insurance provides an insurance cover that is guaranteed for your entire life. . This policy also builds cash value.convergence! Rank amongst top 3 players in each niche Partner with best in class world leaders Create service excellence in all business. In addition this policy is also eligible for bonuses. 8 . health care and clinical research Life insurance and health care……….
which you can use during to fund any unforeseen needs by taking a loan. 9 . Child Endowment to Age 24 enables you to provide for the best possible wedding of your child and also builds cash value. CHIDREN’S ENDOWNMENT Children's Endowment Participating Insurance to age 18/24 with whole life option enables you to provide for specific needs of your growing children. which you can use during your lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan. In addition this policy is also eligible for bonuses. This policy also builds cash value. Child Endowment to Age 18 enables you to provide for higher education of your child. In addition this policy is also eligible for bonuses. LIFE GAIN PLUS ENDOWMENT Life Gain™ Plus Endowment (Participating) Policy Provides you with an insurance cover that is guaranteed during the tenure of the policy.
com Strong team of qualified and experience professional including CAs. SEBI.MARKET PROFILE Wide range of Products and Services. Group Co. 24x7 online accessibility through www.CSs and others.Approved Category I Merchant Bankers.maxnewyorklife. 41 years experience as investment advisors and Financial Planners More than Seven Lakh satisfied clients all over India Countrywide network of 109 branches Over 12000 NRI clients across the globe. MBAs. CFPs. BCIBL is an IRDA – licensed Direct Insurance Broker. 10 . Personalized wealth management advice.MBEs.
experienced and motivated professionals. collate. a crack term of highly qualified. With over 120 offices in 50 cities and a network of over 10.SWOT ANALYSIS STRENGTHS The Investment Banking Group. we assure you a pan-India reach. The Max newyork life insurance centre for Investment Research comprises highly qualified and talented professional who constantly monitor the market and collect. analyes and disseminate valuable information. insurance companies.000 Advisor Associate. PF Trust. Max newyork life insurance is a strongly research-driven organization. mutual fund houses. delivers Max new york life insurance’s Investment Banking Service. Max newyork life insurance enjoys a extremely cordial relationship with major institution in the financial markets such as banks. act. 11 . educational trust.
No categorization of stock e. No major support from research team for short term investment. 12 . hence foreign funds for this year is close to 66000crore hence Indian stock markets are booming so bajaj can capitalized on this growing phase of Indian stock markets. Out of total population around 100 crore people 4 crore have de-mat account. hence process becomes time consuming.g they treat reliance as same as that of any low category companies. Limited expose for Max Newyork life insurance is 4 times as compared to other competitive firms it is 10-12 times.WEAKNESSES The systems are not automobile so manual intervention is reqired. OPPORTUNITIES India is one of the few developing economy growing at a rate of 6-7%. Max Newyork life insurance has client conservative approach so by using the strategy the client should make more profits as compared to other. Indian economy is becoming a default destination for global investors. Whereas rest of the world is either contracting or growing at a rate of 1% or less and financial service sector is 1 of the major growing sector.
etc. they are offering higher services to the clients hence they are tough in breaking.THREATS Well-established players like India bulls. Infrastructure supporting is very less so client face lot of issue because of technology. kotak. They do not provide funding to clients as other firms do. 13 .
we can look at some techniques to analyze the information contained within the balance sheet & P&L account. along with other pertinent information. to assist in investment and financial decision-making. payers. and others who make judgments about the financial health of organizations. among other things. the balance sheet. and credit policies. Balance Sheet or Position Statement 14 . Financial statement analysis is important to boards. which uses data from the balance sheet and income statement to produce values that have easily interpreted financial meaning . By financial statements we mean two statements: 1. Financial analysis may be used internally to evaluate issues such as employee performance.ANALYSIS OF FINANCIAL REPORT FINANCIAL STATEMENT ANALYSIS Financial analysis is the selection. The annual report comprises the income statement. The primary source is the data provided by the company itself in its annual report and required disclosures. Profit and loss Account or Income Statement 2. and interpretation of financial data. The analyst draws the financial data needed in financial analysis from many sources. and the statement of cash flows statements. and externally to evaluate potential investments and the credit-worthiness of borrowers. lenders. the efficiency of operations. managers. One widely accepted method of assessing financial statements is ratio analysis. evaluation. With a great understanding of the balance sheet & p&l account and how it is constructed. Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is drawn.
The P&L statement is also known as a "statement of profit and loss". as well as the amount invested by the shareholders. that sounds a lot like the income statement in that it records financial performance over a specified period.usually a fiscal quarter or year. Ratio Analysis Profit and loss Account or Income Statement A financial statement that summarizes the revenues. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders' Equity Cash Flow Statement The cash flow statement shows how much cash comes in and goes out of the company over the quarter or the year. But there is a big difference between the two. Cash Flow Statement 4. liabilities and shareholders' equity at a specific point in time. an "income statement" or an "income and expense statement". At first glance. These three balance sheet segments give investors an idea as to what the company owns and owes. 15 .3. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. costs and expenses incurred during a specific period of time . Balance Sheet or Position Statement A financial statement that summarizes a company's assets.
13.061 crores in 2010-11. Assets under management rose to Rs. other companies. Net Profit has increased to Rs. the industry. Ratio analysis is predominately used by proponents of fundamental analysis. 2. or even the economy to judge the performance of the company. Ratios are calculated from current year numbers and are then compared to previous years.751 crores in 2010-11. Solvency capital ratio at 365% was significantly higher than the mandated 150%.836 crores. 3.813 crores in 2010-11 over previous year. a growth of 37% over last year. To make predictions about the future performance of a company Financial Statement of the company Total Revenue increased by 20% to Rs. Renewal premium income grew by 25% over previous year to Rs. PURPOSE: The main purpose of analyzing the financial statement are the following: To assess past performance and current financial position. First Year Premium recorded a growth of 11 % over previous year to Rs. 283 crores. The cost to premium ratio improved 400 basis points to 38%. 5.Ratio Analysis: A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Has amongst the highest conservation ratio at 82%. 12 times higher than previous year. 16 .
During the financial year 2010-11.726 Crore recording a growth of 9% over the previous financial year where as both the industry and private players have recorded a decline of 8% 17 . 1.288 10.000 crores. the company achieved income of Rs. (31 Mar ‘11) (Rs.54.836 (31 Mar ’10) (Rs.812 154.687 13. Crs) 4. on this parameter. Crs) Premium Income Sum Assured in force Asset Under Management Profit for the year 283 5.3.751 crore.861 123.5.116 Change % 20% 26% 37% 24 1079% Max New York Life believes Adjusted Individual First Year Premium is the true indicator to measure new business success. up by 25% over previous year.061 Crore and the renewal premium recording a growth of 25% to Rs. Revenue The Total Revenue for FY 2010-11 increased by 20% to Rs. Cumulative sum assured is over Rs.812 crore with new business premium growing 11% to Rs.2. Financial Year (FY) 2010-11 (April 2010 – March 2011) compared with FY 2009-10 (April 2009 – March 2010). 1.
This impressive rise in net profit was a result of continued revenue growth coupled with better productivity and cost efficiency. 18 . Post 1st September 2010. recorded the Net Profit of Rs. in this seven months period the total industry and private insurers recorded a decline of 19% and 35% respectively while Max New York Life grew by 10%. Net Profit During the FY 2010-11. The cost ratio improved 4 percentage points to 38%. Consequently the private market share of the company also increased by 199 bps to 7. The company’s conservation ratio which is amongst the highest at 82% is testimony to its commitment towards customers. after the new ULIP guidelines came into force. 12 times the profit recorded in the previous year.283 crore. Max New York Life Insurance has outperformed the industry every month. Max New York Life Insurance.and 20% respectively. Cumulatively.5%. Cost Management During the year the company undertook cost management initiatives which had its impact during the last quarter of the year and its full year impact would be visible in Financial Year 2011-12.
The company’s paid up capital (including share premium) as on March 31st 2011 was at Rs.Solvency Margin & Capital The solvency margin of the company stood at 365% for FY 2011 as compared to 322% for the corresponding period previous year.13. This increase in sum assured is an outcome of the company’s enhanced focus on long-term savings and protection.54.976 crs. 1. 19 . Sum Assured and Assets Under Management The total sum assured increased to Rs. During the financial year 2010-11 the Assets Under Management recording a growth 37% to Rs. Max New York Life maintained more than 2 times solvency margin as compared to the margin mandated by IRDA.836 Crore.687 crore recording a growth of 26%. 1.
then also the creditors will be able to get their payments in full.8 Axis Title 0. In crores) 8378. The ratio of 2 is considered as a safe margin of solvency due to the fact that if current assets are reduced to half (i.) 1 instead of 2.e.4 0.99 Current Ratio 2010 2011 6294.RATIO ANALYSIS CURRENT RATIO Current Ratio = Current Asset Current Liability Current ratio 0.39 0.75 0.6 0.04 10834. But here the current ratio is less than 1 and more than 0 which shows that the current assets less to the current liabilities which is not satisfactory as 20 . In crores) Current Liabilities (Rs.2 0 2010 2011 Year Current Assets (Rs.01 6765.62 Interpretation: An ideal solvency ratio is 2.
Therefore company should keep more current assets so that it can maintain a satisfactory safety margin LIQUIDITY RATIO: Quick Ratio = Total Quick Assets Total Current Liabilities Quick Assets = Total Current Assets – Inventory Quick Ratio 0.28 0.69 0.the safety margin is very less or zero.99 Current Quick Ratio (Rs. In crores) Total Liabilities crores) 8378.04 10834.2 0 2010 2011 Year Total Quick Assets (Rs. In 2010 2011 5845.4 0.45 6199.8 Axis Title 0.57 21 .6 0.
DEBT EQUITY RATIO Debt equity ratio Debt = = Debt Equity Debt means long term loan shareholder’s fund + reserve Equity = Debt Equity ratio 2 1 0 2010 2011 Debt Equity ratio 22 . not satisfactory. Here this ratio is less than 1 in both of the previous as well as current year which is close to 1 which i. there is at least one rupee of liquid assets.Interpretation: A quick ratio of 1:1 is considered favourable because for every rupee of current liability.e. Therefore they should rationally utilise its funds to maintain an ideal liquid ratio. A higher value of ratio is considered favourable. This means the company has not managed its funds properly in this particular period.
In crores) Debt Equity Ratio 2010 2011 25931.3 0. in its capital structure. From the long-term lenders point of view this ratio is not satisfactory.1 0.31 1. In crores) Equity (Rs.44 35761.82 1.05 0 2010 2011 23 . PROPRIETORY RATIO: Proprietory Ratio = Shareholder’s Fund Total Assets Proprietory Ratio 0.2 0. This shows more relying on outside funds as compared to internal sources of capital.82 19729.25 Axis Title 0.Year Debt (Rs.61 19761.15 0.8 Interpretation: The ratio shows the extent to which funds have been provided by long-term creditors as compared to the funds provided by the owners. Here the Debt-Equity ratio for the above period is always high.
In crores) Proprietory Ratio 2010 2011 19761. Proprietory ratio was 27% in 2010.01 90388.21 Interpretation: Proprietory Ratio estalishes the relationship between proprietors fund and total assets.82 19729. In crores) Total Assets (Rs.Years Shareholder's Funds (Rs.27 0.61 71702. after that was 21% in year 2011. It is good sign as far the long term solvency is concerned. Hence it leads to the conclusion owners have More than 20% stake in the total assets of the bank. FIXED ASSETS TURNOVER RATIO: Fixed Assets Turnover Ratio = Cost of goods sold or Sales Net Fixed Assets Fixed Assets Turnover Ratio 4 3 2 1 0 2010 2011 Fixed Assets Turnover Ratio 24 .42 0.
98 Interpretation: The objectives of calculating fixed asset turnover ratio are to establishes whether the investment in fixed asset justified in raltion to the sales achived.51 1400.29 3. The fixed assets turnover ratio has been consistently increasing. In crores) Net Fixed Assets (Rs. In crores) Fixed Assets Turnover Ratio 1. It indicates that fixed assets have been effectively used in the business without much additional investment in the period of study and also the capital is not blocked in fixed assets NET PROFIT RATIO Net profit ratio = Net profit X Net sales 100 NPR 23 22 21 20 2010 2011 NPR 25 .56 2744.Year Sales (Rs.08 2010 2011 3549.87 4214.
Year Net Profit (Rs.40 962.87 4214.56 Net Profit Ratio (in %) 21. In crores) Sales (Rs. Although both the sales and net profit have increased during the above period but the Net Profit Ratio is declining continuously.08 22. This is because of the reason that net profits have not increased in the same proportion as of the sales. In crores) 3549. OPERATING PROFIT RATIO: This ratio is calculated as follows: Operating Profit Ratio = Operating Profit X100 Net Sales OPR 25 Axis Title 20 15 10 5 0 2010 2011 26 .82 2010 2011 748.13 Interpretation: Net profit ratio establishes the relationship between net profit and net sale it shows the percentages of net profit earned on Sales.
Year Operating Profit (Rs.04 2010 2011 6612. In crores) Sales (Rs.7 9712.6 Operating Profit Ratio (in %) 18. This is due to the reason that operating expenses have been increased more as compared to sales during the above period consequently reducing the operating profits. After that it has been consistently gaining momentum in 2011it was 23.8 Interpretation: In the year 2010 the operating profit is 18. This ratio is computed to establish relationship between operating costs and net sales. 27 .62%.7 42145.62 23.4. In crores) 35498. This ratio indicates the proportion that the cost of sales or operating cost bear to sales.
it must be investigated. The gross profit ratio of current year is compared to previous years’ ratios or it is compared with the ratios of the other concerns. The minor change in the ratio from year to year may be ignored but in case there is big change.04 2010 2011 262324 159488 Interpretation Gross Profit Ratio provides guidelines to the concern whether it is earning sufficient profit to cover administration and marketing expenses and is able to cover its fixed expenses. GROSS PROFIT RATIO Gross profit ratio = Gross profit X Net sales 100 GPR 25 20 Axis Title 15 10 5 0 2010 2011 Year Gross Profit (Rs. In crores) Sales (Rs. In crores) 35498.7 42145. 28 .62 23.6 Operating Profit Ratio (in %) 18.
40 962. of Equity shares Year Net Income Available For No.13 78.15 Interpretation: Earnings Per Share is the most commonly used data which reflects the performance and prospects of the company. It affects the market price of shares. This ratio helps in evaluating the prevailing market price of the share in the light of profit earning. Of Shareholders Shares (Rs.5 10 9.5 11 10. 29 .5 2010 2011 Axis Title Earning Per Equity Share = Net Profit after Tax –Prefrence Dividend No.254 9. In crores) Equity EPS 2010 2011 748.563 86. Here the Earning Per Share is shows that in the year 2011 Earnings Per share is increasing due to incline in profits.5 9 8.5 11. EARNING PER SHARE: EPS 11.
A very high number of respondents have opted for insurance for such purposes and it shows how insurance companies have been successful to attract public money in recent times. LIC has never been known for prompt service or customer oriented methods and Max New York Life can build on these factors 30 . A high penetration of print. radio and Television Ad campaigns over the years is beginning to have it’s impact now. Another heartening trend was in terms of people viewing insurance as a tax saving and investment instrument as much as a protective one. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. People in general have been impressed by the marketing and advertising campaigns of insurance companies. The general satisfaction levels among public with regards to policy and agents still requires improvement. But therein lies the opportunity for a relative player like Max New York Life. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money.CONCLUSION Our exhaustive research in the field of Life Insurance threw up some interesting trends which can be seen in the above analysis.
iciciprudential.com 5.irda.com 6.com 3.maxindia.lic. http://www. http://www.maxnewyorklife. http://www. http://www.newyorklife. http://www. http://www.com 31 .com 4.com 2.References 1.
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