A

MAJOR PROJECT REPORT ON

“A COMPARATIVE FINANCIAL ANALYSIS OF GENERAL

INSURANCE COMPANIES OF PUBLIC SECTOR WITH PRIVATE
SECTOR”

Submitted in partial fulfillment for the award of degree

MASTER OF BUSINESS ADMINISTRATION

(Session 2020-2022)

Submitted By - Manjinder Singh

University Roll No. 624

MBA 2020-2022

BABA FARID COLLEGE OF MANAGEMENT AND TECHNOLOGY,

MUKTSAR ROAD, DEON, BATHIDA
PUNJAB
 CERTIFICATE

This is to certify that Manjinder Singh, University Roll No. 624, has preceded
under my supervision his project report on “A COMPARATIVE ANALYSIS OF
GENERAL INSURANCE COMPANIES OF PUBLIC SECTOR WITH PRIVATE
SECTOR” in specialization area “Finance”.

The work embodied in this report is original and is of the standard expected of
an MBA student and has not been submitted in part or full to this or any other
University for the award of any degree or diploma. He has completed all
requirements of guidelines for research project report and the work is fit for
evaluation.

Name: Manjinder Singh

Signature of Supervisor/Guide
 DECLARATION

This is certified I, Manjinder Singh, student of Baba Farid College of Management and
Technology, Studying in MBA (4th Semester), has undergone research project on title “A
COMPARATIVE ANALYSIS OF GENERAL INSURANCE COMPANIES OF
PUBLIC SECTOR WITH PRIVATE SECTOR ” for the completion of degree of Master of
Business Administration

I solemnly declare that the work done by me is original and no copy of it

has been submitted to any other university for award of any other
degree/fellowship or a similar title and topic.

(Manjinder Singh)

Specialization: Finance
 ACKNOWLEDGEMENT

I am very thankful to everyone who all supported me, for I have completed my
project effectively and moreover, on time, equally grateful to my teacher. They
gave me moral support and guided me in different matters regarding the topic.
They have been very kind and patient, whilst suggesting to me the outlines of
this project, and correcting my doubts. I thank them for them overall support.
Last but not least, I would like to thank my parents who helped me a lot in
gathering different information, collecting data and guiding me from time to
time in completing this project. Despite their busy schedules, they gave me
different ideas to help make this project unique.

Thanking You
 TABLE OF
CONTENT

Sr. No. Content Page No.

Chapter-1
1 1.1 Introduction to banking sector 1 – 16
1.2 Introduction to the title 17 - 26

Chapter-2
2 27 -31
2.1 Review of literature

Chapter-3
3 32 – 33
3.1 Objectives of the study

Chapter-4
4 34 – 36
4.1 Research Methodology

Chapter-5
5 37-54
5.1 Data Analysis and Interpretation

Chapter-6
6 55 - 56
6.1 Findings

Chapter-7
7 57 - 58
7.1 Suggestions

Chapter-8
8 59 - 60
8.1 Conclusion

Chapter-9
9 61 - 62
9.1 Bibliography

1
 CHAPTER-1

INTRODUCTION

2
 INTRODUCTION OF INSURANCE

Insurance is a contract, represented by a policy in which an individual or entity receives the

financial protection or reimbursement against losses from an insurance company. The
company pools client’s risks to make payments more affordable for the insured. It is a form
of a risk management, primarily used to hedge against the risk of a contingent or uncertain
loss.Insurance is a business arrangement by which an insurer collects funds, premiums,
from insured for the purpose of compensation in case of a specific event or loss.
Generally, the insured obtains money to compensate for a specific loss like health or
automotive expense, theft, damage or loss of life.

An entity which provides insurance is known as an insurer, insurance company, insurance

carrier or underwriter. A person or entity who buys insurance is known as an insured or as a
policyholder. The insurance transaction involves the insured assuming a guaranteed and
known relatively small loss in the form of payment to the insurer in exchange for the insurer's
promise to compensate the insured in the event of a covered loss. The loss may or may not be
financial, but it must be reducible to financial terms, and usually involves something in which
the insured has an insurable interest established by ownership, possession, or pre-existing
relationship.The insured receives a contract, called the insurance policy, which details the
conditions and circumstances under which the insurer will compensate the insured. The
amount of money charged by the insurer to the insured for the coverage set forth in the
insurance policy is called the premium. If the insured experiences a loss which is potentially
covered by the insurance policy, the insured submits a claim to the insurer for processing by
a claims adjuster. The insurer may hedge its own risk by taking out reinsurance, whereby
another insurance company agrees to carry some of the risk, especially if the primary insurer
deems the risk too large for it to carry.

DEFINITION
Insurance, in law and economics, is a form of risk management primarily used to hedge
against the risk of a contingent loss. 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. An insurer is a
company selling the insurance; an insured or policyholder is the person or entity buying the
insurance. The insurance rate is a factor used to determine the amount to be charged for a
certain amount of insurance coverage, called the premium.

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 TYPES OF INSURANCE

There are different kinds of insurance and these are

 Life insurance 
 General insurance.

In life insurance, someone ensures their life or someone else's life. At the death of insured
person or on the date of maturity whichever happens earlier, the amount insured will be
paid.Life insurance is a contract between an insurer and a policyholder in which the insurer
guarantees payment of a death benefit to named beneficiaries upon the death of the insured.
The insurance company promises a death benefit in consideration of the payment of premium
by the insured.

General insurance is a non-life policy.In this type of insurance, the policyholder gets the
compensation only when the loss is caused to him, due to the reasons indicated in the policy.
It is also called as non-life insurance, such as:

 fire insurance
 marine insurance
4
 INTRODUCTION OF GENERAL INSURANCE

A general insurance is a contract that offers financial compensation on any loss other than
death. It insures everything apart from life. Any insurance other than the life insurance is
called as general insurance. A general insurance compensates you for financial loss due to
liabilities related to your house, car, bike, health, travel, etc. The insurance company
promises to pay you a sum assured to cover damages to your vehicle, medical treatments to
cure health problems, losses due to theft or fire, or even financial problems during travel.
Insurance contracts that do not come under the ambit of life insurance are called general
insurance.

A non-life insurance contract is different from a life insurance contract. A life insurance
contract is a long term contract, while general insurance contract is a one-year renewable
contract. The risk namely ‘death’ is certain in life insurance. The only uncertainty is as to
when it will take place, whereas in general insurance, the insured event may or may not take
place. It is difficult to determine the economic value of life, whereas the financial value of
any asset to be insured under a general insurance policy can be determined. Because of these
peculiar features, a non-life insurance contract is different from a life insurance contract.
Genera Insurance means to “Cover the risk of the financial loss from any naturalcalamities
viz. Flood, Fire, Earthquake, Burglary, etc... i.e. the events which are beyondthe control of
the owner of the goods for the things having insurable interest with theutmost good faith by
declaring the facts about the circumstances and the products bypaying the stipulated sum , a
premium and not having a motive of making profit from theinsurance contract.” It is called
property and casualty insurance in the U.S. and Non – Life Insurance in Continental Europe.

Section 2(6B) of the Insurance Act 1938, defines general insurance business. According to
this general insurance business means fire, marine, or miscellaneous insurance whether
carried separately or in combination. General Insurance Corporation of India (GIC) was set
up with exclusive privilege for transacting General Insurance business. After the passage of
IRDA Act 1999, GIC has been delinked from its subsidiaries and has been assigned the role
of Indian reinsurer.The different forms of general insurance are fire, marine, motor, accident
and other miscellaneous non-life insurance. 

5
 ORIGIN AND DEVELOPMENT OF GENERAL INSURANCE

THE HISTORY OF GENERAL INSURANCE IN WORLD

The growth of insurance industry is associated with the general growth ofindustry, trade and
commerce. The origin of insurance services may be traced back to 14th Century in Italy when
ships carrying goods were covered under different perils. The systematic and orderly
beginning of the insurance industry took place in UK at Lloyds coffee house in Tower Street
in London. In developing countries, insurance sector has assumed special significance as it
has the potential to speed up the rate of growth of the economy.Insurance Industry assists the
development process of an economy in several ways. Primarily, it acts as mobiliser of
savings, financial intermediary promoter of investment activity, stabilizer of financial market,
risk manager and an agent to allocate capital resources efficiently. Its growth in developing
countries has neitherbeen satisfactory nor in tanden with the growth of other sectors of the
economy. The 12 most industrialized countries in the world still account for 88% of global
premium volume. The share of developing countries is extremely low. The slow growth
insurance services in developing countries calls for an in-depth analysis of the nature and
pattern of the evolution of these services policies pursued to develop the insurance industry
and constraints thereof also need close examination.

THE INDIAN HISTORY OF GENERAL INSURANCE

Regrettably, the Indian insurance industry has lagged behind even amongst the developing
countries of the world. Although general insurance services started in India about 150 years
ago, their growth has been dilatory, as reflected by low insurance penetration and density.
Several factors are responsible for this state of affairs, the chief being the monopoly status of
the industry till recently. The life insurance business was nationalized in 1956 and the general
insurance industry in 1973. The lack of competition has impeded the development of
insurance industry in India, resulting in low productivity and poor quality of customer
services. The process of liberalization and globalization of the Indian economy started in
right earnest in mid-1980s. The market mechanism was the motivating factor underlying the
new economic policy. In consonance with the new economic policy, insurance sector was
opened up for the private sector in 1999. The new competitive environment is expected to
benefit the consumers, industry and the economy at large. The consumer will have a greater
choice in terms of number and quality of products, low premium rates, efficient after sales

6
services while the economy will benefit in terms of larger flow of savings, increased
availability of investible funds for long term projects, enhanced productivity and growth of
multiple debt instruments.

BACKGROUND
Prior to Nationalization, 107 companies including branches of some foreign insurance
companies, operated in the country – Under the General Insurance Business Nationalization
Act 1972, these were amalgamated and grouped in to 4 operating companies viz.

National Insurance Company Ltd.

Head Office – Kolkata
The New India Insurance Company Ltd.
Head Office – Mumbai.
The Oriental Insurance Company Ltd.
Head Office – New Delhi.
The United India Insurance Company Ltd.
Head Office – Chennai.
They became subsidiaries of a holding company namely Genera Insurance Corporation of
India which came into being on January 1, 1973. The paid-up capital of GIC is fully
subscribed by the government of India, and that of the 4 companies, fully by GIC. All the five
entities are thus government companies registered under the companies Act. Although
established under act of Parliament. All the five companies have Boards of Directors. The
GIC Board has a fulltime Chairman assisted by 2 Managing Directors. The Chairman and
Managing Directors is member of the board. The Additional Secretary (Insurance Division) is
ex. officio nominee member on the Board. There are part time members on the Board
nominated by Government from among Chief Executives of Financial Institutions (LIC, State
Bank, Exim Bank, IDBI) and prominent representatives of special interests, social and
economic groups. The Chairman-cum-Managing Directors of the four companies are
permanent invites on the Board. The GIC as a holding company is responsible for
superintending, controlling and carrying on the business carry or direct business operations
on all Indian basis. The GIC does not carry on direct insurance operations expecting,
Aviation Insurance of the National Carriers. It has reinsurance arrangements with the 4
companies where under 20% of their business is ceded by the companies to GIC. It also
administers the corp. Insurance scheme on behalf of Government.

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 NATURE AND CHARACTERISTICS OF GENERAL INSURANCE
 Sharing Of Risk
Insurance is a co-operative device to share the burden of risk, which may fall on happening
of some unforeseen events, such as the death of head of family or on happening of marine
perils or loss of by fire.

 Co-Operative Device
Insurance is a co-operative form of distributing a certain risk over a group of persons who
are exposed to it. A large number of persons share the losses arising from a particular risk.

 Large Number of Insured Persons

The success of insurance business depends on the large number of persons insured against
similar risk. This will enable the insurer to spread the losses of risk among large number of
persons, thus keeping the premium rate at the minimum.

 Evaluation of Risk
For the purpose of ascertaining the insurance premium, the volume of risk is evaluated,
which forms the basis of insurance contract.

 Amount of Payment
The amount of payment in indemnity insurance depends on the nature oflosses occurred,
subject to a maximum of the sum insured. In life insurance, however a fixed amount is paid
on the happening of some uncertain event or on the maturity of the policy.

 Payment Of Happening Of Specified Event

On happening of specified event, the insurance company is bound to make payment to the
insured. Happening of specified event is certain in life insurance, but in the case of fire,
marine of accidental insurance, it is not necessary. In such cases, the insurer is not liable
for payment of indemnity.

 Protection against Risks

Insurance provides protection against risk involved in life, materials and property. It is a
device to avoid or reduce risks.

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 Transfer Of Risk
Insurance is a plan in which the insured transfers his risk on the insurer. This may be the
reason that may person observes, that insurance is a device to transfer someeconomic
losses would have been borne by the insured themselves.

 Spreading Of Risk
Insurance is a plan which spread the risk & losses of few people among a large number of
people. John Magee writes, “Insurance is a plan by which large number of people
associates themselves and transfers to the shoulders of all, risk attached to individuals”.

 Insurance Is Not Charity

Charity pays without consideration but in the case of insurance, premium is paid by the
insured to the insurer in consideration of future payment.

 Insurance Is Not A Gambling

Insurance is not a gambling. Gambling is illegal, which gives gain to one party and loss to
other. Insurance is a valid contact to indemnity against losses. Moreover,insurable interest
is present in insurance contracts it has the element of investment also.

 A Contract
Insurance is a legal contract between the insurer and insured under which the insurer
promises to compensate the insured financially within the scope of insurance policy, the
insured promises to pay a fixed rate of premium to the insurer.

 Regulation Under The Law

The government of every country enacts the law governing insurance business so as to
regulate, and control its activities for the interest of the people. In India General Insurance
Act 1972 and the Life Insurance Act 1956 are the major enactment in this direction.
 Institutional Setup
After nationalization, the insurance business in the country is operation understatutory
organization setup. In India, the General Insurance Companies and the Life Insurance
Corporation and subsidiary companies of General Insurance Corporation are operating the
various fields of insurance.

9
 TYPES OF GENERAL INSURANCE

 Fire Insurance

Fire insurance is property insurance covering damage and losses caused by fire . A
contractual arrangement in which the insurer promises to indemnify the loss caused to the
goods and property of the insured due to fire, up to agreed amount.Fire insurance covers a
policyholder against fire loss or damage from many sources.

The term ‘fire’ must satisfy two conditions:

(a) There must be actual fire or ignition;

(b) The fire should be accidental.

Types of Fire Insurance

Comprehensive policy

Fire insurance is called a comprehensive policy when it covers all other kinds of risk like
riots, arson, loot, civil commotion, wars, strikes, accidents and other in single insurance.

 Blanket policy

A blanket policy is that fire insurance policy in which a single policy is used to insure
properties at one or different locations against the risk of fire

 Consequential loss policy

A consequential loss policy is meant for compensating the loss not directly b fire but
incidental to the fire event. Loss of fire is also covered but addition to that other kinds of
losses due to expenses on salary, interest, inflation or hiring of temporary premises are also
covered.

 Valued policy

A fire insurance policy the value of property is fixed at the time of inspection is called
valued policy. So in case of loss of property by fire, the insurance company pays the full of
policy amount at the time of taking policy whether the property is fully damaged or not.

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 Motor insurance

Motor vehicle insurance, also called automotive insurance, a contract by which the insurer
assumes the risk of any loss the owner or operator of a car may incur through damage to
property or persons as the result of an accident.Insurance for the damage or theft of your
motor vehicle, two-wheeler, three-wheeler or four-wheeler, is covered under this type of
insurance. The damage caused to the vehicle can be caused natural or man-made
circumstances, the extent of which would change from policy to policy.

Types of Motor Insurance

 Car Insurance

This is the fastest growing segment in the insurance sector as car insurance is mandatory
while buying a new car. Car insurance covers loss or damage by accident, fire, lightning,
riots, earth quake, hurricane, terrorist attacks, explosion, theft, third party’s claims and
damages (like liability for third party injury or death, third party property and liability to
paid driver). On payment of appropriate additional premium it covers loss or damage to
electrical or electronic accessories and other significant items.

 Two Wheelers Insurance

Two wheeler insurance is another type of popular auto insurance in India. It is governed

by the Indian Motor Tariff. This insurance provides protection against natural and man-
made calamities like: fire, rockslide, landslide, storm, hurricane, flood, earthquake,
burglary, theft, riots or any damage caused to the vehicle in transit by road, air, inland
waterway or rail.Two wheeler insurance provides mandatory personal accident cover of
Rs. 1 lakh to the insurer. This accident cover can also be opted for passengers. It also
protects against legal liabilities arising due to third parties injury/death or damage caused
to its property.

 Commercial Vehicle Insurance

This type of insurance covers all those vehicles which are not used for personal purpose.
Trucks, buses, heavy commercial vehicles, light commercial vehicles, multi utility
vehicles, agricultural vehicles, ambulances etc. are covered under this insurance. The
premium is calculated on the basis of the make and model of the commercial vehicle,
place of registration, year of manufacture, current showroom price and whether the insurer
is individual or corporate.

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 Travel insurance

Another popular type of general insurance is travel insurance, which covers your trips
abroad.Travel insurance is a type of insurance that covers the costs and losses associated with
travelling.It is a useful protection for those travelling domestically or abroad.  Travel
insurance can be taken to cover loss or theft of your valuables as well as documents. Some
travel insurance policies also cover flight delays and medical emergencies. Travel insurance
can be taken for personal as well as business trips.

Types of Travel Insurance

 Travel Accident Insurance

The purpose of this insurance is to provide term life and accidental death and
dismemberment protection for you and your family. This covers unexpected and sudden
losses that occur because of travel or flight accidents. Some other emergency assistance
benefits might cover baggage loss, evacuations, medical and dental expenses, pre-existing
medical conditions and repatriation. The benefits apply while you are on a trip that is
insured or during the coverage period. This type of trip insurance is ideal for frequent
world travellers, particularly those who visit risky regions.

 Travel Medical Insurance

General health insurance doesn’t protect you when you travel abroad, but travel medical
insurance acts as a sort of extension to cover medical, dental and evacuation costs during
your travels. This trip insurance is very affordable because it doesn’t cover a host of other
incidentals such as trip cancellations. However, some plans include benefits for delayed or
lost baggage or delayed trips. You can usually purchase travel medical plans for a single
trip or multiple trips over a certain period.

 Medical Evacuation Insurance

This type of plan focuses on covering the cost of evacuations and repatriation. If you are
hospitalized while travelling with your family, it may cover the cost of an emergency
medical reunion and the return of any minor children home. Some plans may also provide

12
 term life and AD&D benefits to protect your family as well as coverage for lost luggage,
adventure sports and trip interruptions.

 Package Travel Insurance

Package plans are customized according to the different needs of various travellers. A
typical plan includes coverage for evacuations, luggage problems, medical and dental
costs, returning minors home, and trip cancellations, delays and interruptions. Some plans
also cover adventure activities, credit card and passport services, identity theft assistance,
pet care, pre-existing medical conditions, rental car collisions, roadside assistance and
sports equipment.

 Annual and Specialty Travel Insurance

Annual travel insurance is similar to package travel coverage, but instead of covering a
single trip, it covers all of your trips for an entire year. Some of these plans are renewable.
Specialty travel insurance provides coverage for certain aspects of a trip, such as car
rentals and term life, to supplement the benefits that you already receive. This type of plan
is ideal when you are concerned about a specific risk.

 Health Insurance

Health insurance, also called, medical insurance or simply mediclaim, covers the cost of an
individual's medical and surgical expenses.Health insurance, system for the financing of
medical expenses by means of contributions or taxes paid into a common fund to pay for all
or part of health services specified in an insurance policy or the law. The key elements
common to most health insurance plans are advance payment of premiums or taxes, pooling
of funds, and eligibility for benefits on the basis of contributions or employment.Ill health can
result in a major halt in your life and work. Moreover, the health care cost is so increasing
that you will be spending a huge amount of money to bear costs. This is the reason why you
would need health insurance to cover your medical expenses following hospitalization from
sudden illnesses or expenses caused by accidents.  This also includes a cashless facility in
empanelled hospitals, pre-hospitalisation and post-hospitalisation expenses and ambulance
charges.

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Types of Health Insurance

 Hospitalization Plans

Hospitalization plans reimburse the hospitalization and medical costs of the insured
subject to the sum insured. For this reason, the plans are also known as indemnity plans.
The sum assured can be fixed - 
i- For a member of the family in case of individual health policies or 
ii- For a family as a whole in case of a family health insurance policy
For instance, consider a three-member family with an individual cover of Rs 1 lakh each.
Each member can claim reimbursement for a maximum of Rs 1 lakh as all three policies
are independent.
If the family applies for a family health plan cover of Rs 3 lakhs, then any family member
can claim medical benefit for more than Rs 1 lakh so long as it is within the overall sum
assured of Rs 3 lakhs.

 Hospital Daily Cash Benefit Plan

The daily cash benefit plan is a defined benefit policy. As evident from the name,the
policy pays out a defined sum of money for every day of hospitalization regardless of
actual costs. For instance, the hospitalization costs for a day may be Rs 2,000/day and the
defined daily limit of the policy could be Rs 1,500/day, in which case the insured receives
the latter. On the other hand, if the hospitalization cost is Rs 1,000/day, he still receives Rs
1,500/day.

 Critical Illness Plans

These are benefit-based health insurance plans which pay a lump sum amount on
diagnosis of predefined critical illnesses and medical procedures. The illnesses are
specified at the outset. By nature, critical illnesses are high severity and low frequency and

14
 cost of treatment is higher compared to regular medical problems like heart attack, stroke,
among others.

 Home insurance

Home insurance is one of the forms of property insurance which protects homeowners from
any damages to the home or property estate. Home insurance additionally protect
homeowners against any accidents in home or on the property estate. “Basic home insurance
policy coverage” includes home structure coverage, personal belongings coverage, liability
coverage and coverage of extra expenses due to temporarily unavailable to live in the event
of fire or other disasters. Home and household insurance protects your home and the items
inside it. A home insurance policy would also cover natural and man-made circumstances.
The contents that are covered under a home insurance policy would depend on the type of
policy you buy.

 Rural Insurance

Rural insurance generally refers to insurance related to rural people, their business (farming,
cattle, poultry, etc.) and their families.
Insurance solutions to meet the needs of agriculture and rural businesses form part of rural
insurance. IRDA has stipulated annual targets for insurers to provide insurance to the rural
and social sector.
Rural insurance have cover for:
 Farmers’ package insurance
 Hut insurance
 Gramin personal accident insurance
 Animal–driven cart insurance
 Cycle rickshaw policy
 Lift irrigation insurance
 Failed–well insurance
 Agricultural pump set policy
 Horticulture / plantation insurance scheme
 Honey bee insurance

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 Sericulture (silk worm) insurance
 Aqua culture (shrimp / prawn) insurance
 Poultry insurance
 Sheep and goat insurance

 Commercial Insurance

Commercial Insurance encompasses solutions for all sectors of the industry arising out of
business operations. Insurance solutions for automotive, aviation, construction, foods and
beverages, manufacturing, oil and gas, pharmaceuticals, power, technology, telecom, textile,
transport and logistics sectors. It covers small and medium scale enterprises, large
corporations as well as MNCs.

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 Introduction to the topic

INTRODUCTION OF GENERAL INSURANCE COMPANIES

 PUBLIC SECTOR COMPANIES

UNITED INDIA INSURANCE COMPANY LTD

United India Insurance Company is an Indian general insurance company, headquartered

in Chennai, India. It was incorporated on 18 February 1938, and was nationalised in
1972.Previously it was a subsidiary of the General Insurance Corporation of India (GIC). But
when GIC became a re-insurance company as per the IRDA Act 1999, its four primary
insurance subsidiaries New India Assurance, United India Insurance, Oriental
Insurance and National Insurance got autonomy. Twelve Indian insurance companies, four
co-operative insurance societies, five foreign insurers with Indian operations and the general
insurance operations of the southern region of Life Insurance Corporation of India were
merged with United India Insurance Company Limited to form the company. The company
has a variety of products to provide cover bullock carts to satellites.After nationalization,
United India has 16385 nos. work force spread across 2248 offices providing insurance cover
to more than 10 million policy holders. The Company has a variety of insurance products to
provide insurance cover from bullock carts to satellites. United India has been in the forefront
of designing and implementing complex covers to large customers, as in the cases of ONGC
Ltd, GMR - Hyderabad International Airport Ltd., Mumbai International Airport Ltd.,
Tirumala-TirupatiDevasthanam, Kochi Metro Rail Corporation etc. United India has also
been the pioneer in taking Insurance to the rural masses with large scale implementation of
Universal Health Insurance Programme of Government of India
&VijayaRajiJananiKalyanYojana (covering 4.5 million women in the state of Madhya
Pradesh), Tsunami Jan BimaYojana (in 4 states covering 459,000 of families), National
Livestock Insurance and many such schemes. The Gross Domestic Premium for the Financial
Year 2019-18 is above Rs.17300 Cr.On 2 February 2020, the Government of
India announced the merger of United India Insurance Company with Oriental
Insurance and National Insurance Company Limited.

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 Corporate Vision

 The most preferred insurer in India with global footprint & recognition.
 Trusted brand admired by all stakeholders.
 The best-in-class customer service provider leveraging technology & multiple channels
 The provider of a broad range of innovative products to meet the needs of all customer
segments.
 Great place to work with highly motivated and empowered employees.
 Recognized for its contribution to the society.
Corporate Mission

 To provide Insurance protection to all.

 To ensure customer satisfaction.
 To function on sound business principles.
 To help minimize national waste and to help develop the Indian economy.

SWOT ANALYSIS

Strength Weakness

 Wide network.  Has disadvantage due to last entry.

 Brand image.  Fewer locations as compared to
 Market position is strong. others.
 Large no. of customers.  Service delivery perception is wrong.
 Better geographic balances.

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Opportunity Threat

 Integrated sales and service approach.  The competitors of general insurance.

 Increase focus on value creation in Bajaj Allianz
whole insurance. TATA AIG
 Branch expansion for rapid growth. AVIVA

NATIONAL INSURANCE COMPANY LIMITED

National Insurance Company Limited (NICL) is a state-owned general insurance company

in India. National Insurance Company Limited was incorporated on 5 December 1906 with its
registered office in Kolkata. Consequent to passing of the General Insurance Business
Nationalisation Act in 1972, 21 Foreign and 11 Indian Companies were merged with it and
National became a subsidiary of General Insurance Corporation of India (GIC) which is fully
owned by the Government of India. After the notification of the General Insurance Business
and its India's largest General Insurance Company(Nationalisation) Amendment Act, on 7
August 2002, National has been de-linked from its holding company GIC and presently
operates as an independent insurance company wholly owned by Govt of India. National
Insurance Company Ltd (NIC) is one of the leading public sector insurance companies of India.
It transacts non-life insurance business. Headquartered in Kolkata, NIC's network of about 2000
offices, manned by more than 16,000 skilled personnels, is spread over the length and breadth
of the country covering remote rural areas, townships and metropolitan cities. The paid-up
share capital of National is 10 billion. Starting off with a premium base of 50 crores in 1974,
NIC's gross direct premium income has steadily grown to about 90 billion rupees in the
financial year 2012–13. National transacts general insurance business of Fire, Marine and
Miscellaneous insurance. The Company offers protection against a wide range of risks to its
customers. The Company is privileged to cater its services to almost every sector or industry in
the Indian Economy viz. Banking, Telecom, Aviation, Shipping, Information Technology,
Power, Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare, Tea, Automobile,
Education, Environment, Space Research etc. As of 2010, NICL has a AAA rating from Indian
rating agency, CRISIL, a subsidiary of Standard and Poor's Company. In 2008, the company

19
signed a deal with HCL Technologies worth almost 40billion to outsource the company's
information technology requirements over 7 years. On the 2nd of February 2020,
the Government of India announced the merger of National Insurance Company
Limited with United India Insurance Company and Oriental Insurance.

Corporate Vision

 Achieving the top spot in the insurance sector by providing special insurance services
to all economic sectors.
 Providing the best coverage in the easiest ways for workers.
 To be the most preferred choice of customers for general insurance by building
relations and by growing profitability.

Corporate Mission

 Magnify the value of stakeholder rights through providing the best insurance services.
 Working transparently and fairly with all the stakeholders.
 Provide all means of support and care for the local community and economy.
 Prime mission of making general insurance services accessible to all citizens of India.

SWOT ANALYSIS

Strength Weakness

 Best financial strength rating of B++.  Significant weakening in

 Issuer credit rating of “bbb+”. underwriting performance.
 Established market position.  Pressure on profitability and solvency
 Wide coverage. margin.

 Sound portfolio quality.  Service delivery perception is wrong.

20
Opportunity Threat

 Integrated sales and service approach.  The competitors of general insurance.

 Increase focus on value creation in United India Insurance Company Ltd.
whole insurance.  Technology threat.
 Branch expansion for rapid growth.

 PRIVATE SECTOR COMPANIES

BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED

Bajaj Allianz General Insuranceis a private general insurance company in India. The

company is a joint venture between Bajaj Finserv Limited (formerly part of Bajaj
Auto Limited) owned by the Bajaj Group of India and Allianz SE, a German financial
services company.Bajaj Allianz General Insurance received an Insurance Regulatory and
Development Authority of India (IRDAI) certificate of registration on 2 May 2001 to conduct
general insurance business, including health insurance, in India. In the first year of its
operations the company had 36 offices and around 100 employees. The company started its
operations with a paid up capital of ₹1.10 billion. Bajaj Finserv Limited holds 74% and the
remaining 26% is held by Allianz SE. Bajaj Allianz is headquartered in Pune with offices in
over 200 cities in India and more than 3,500 employees as of 2020. The Company lists 97
filed and approved products, of which 27 are health products. In January 2014, the company
announced it would open up all-women branches. As of 2015, the company has 30 such
branches in India. Registered on 2nd may, 2001, Bajaj Allianz has become one of the top
general insurance brands in India. It is the only general insurance company in India to cross
the Rs.100crore mark in profit in the last two years. Bajaj Allianz General Insurance
Company has received iAAA rating from ICRA Limited for seven consecutive years, which
indicates the highest claims paying ability and strong position of the company. It is the one of
the top insurers in India providing better quality consumer experience and good returns to
shareholders and maintaining the reliability of Bajaj. As on 31st March 2020, Bajaj Allianz

21
continues to be one of the most financially robust insurers in the industry by maintaining its
growth as well as profitability. The company has made a profit before tax of Rs.1,353crore
and emerged as the most profitable insurer recording a profit after tax of Rs. 921 crore. The
company reported a GWP of Rs. 9,487 crore, which has grown by 23.41% compared to the
last fiscal year.

Corporate Vision

 To be the first choice insurer for customers

 To be the preferred employer for staff in the insurance industry
 To be the number one insurer for creating shareholder value

Corporate Mission

 As a responsible, customer focused market leader, we will strive to understand the

insurance needs of the consumers and translate it into affordable products that deliver
value for money.

Core value of Bajaj Allianz General Insurance Company

Customer first always

 Treat all customers with warmth and respect.

 Understand and manage customer expectations.
 Listen and be empathetic to the customer.

Spirit of adventure

 Look for opportunities to innovate at every level.

 Empower others to take responsible decisions.
 Show tolerance for failure.

22
 Trust

 Are accessible to all.

 Are fair and transparent.
 Are open to feedback.
 Own up to mistakes.

Shared Ownership

 Take collective ownership for success and failure.

 Respect divergent views and own the decisions taken.
 Put organizational interest above team and individual interests.
 Consciously include and respect people from different backgrounds.

High Standards

 Set new benchmarks of excellence.

 Are open to new ideas for raising the bar.
 Take pride in our work and excel in what we do.

SWOT ANALYSIS

Strength Weakness

 Wide range product.  Unfavorable public perception

 Excellent services. towards private sector insurance
 Strong financial base. companies.

 Large network.  Low rural penetration.

 Global exposure in insurance through  Lot of competitors with better

Allianz SE and strong local premium and offerings.

implementation by Bajaj.  Long and complicated procedures for

getting insured.

23
Opportunity Threat

 Untapped markets.  Increased capital flow from abroad.

 Insurance offers security with high  Strong presence of traditional public
returns. sector companies.
 India’s large population.  Large number of competitors.
 Huge automobile sector.  Strict rules and supervision by IRDA.

ICICI LOMBARD GENERAL INSURANCE COMPANY LTD.

Established in 2001, ICICI Lombard General Insurance Company is a joint venture

between ICICI Bank- India’s second largest bank and Fairfax Financial Holdings Limited- a
financial services company based in Toronto. ICICI Bank had 64% stake in the venture while
Fairfax had 36% in the joint venture. ICICI Lombard General Insurance is the largest private
sector general insurance company in India. ICICI Lombard General Insurance Company
Limited is one of the leading private sector general insurance companies in India. It is
engaged in general insurance, reinsurance, insurance claims management and investment
management. The company has a Gross Written Premium (GWP) of Rs 126 billion(FY
2020). The firm offers policy insurance and renewal through its intermediaries and website. It
markets assurance products including Car Insurance, Health Insurance, International Travel
Insurance, Overseas Student Travel Insurance, Two Wheeler Insurance, Home
Insurance and Weather insurance. ICICI Lombard has 253 branches spread across the nation.
ICICI Lombard has extensive product portfolio, which includes health, motor, travel, rural
and home insurance. The insurance products are specifically designed to offer complete
insurance solutions to all ages, groups and occupations. Targeting both individuals and
corporate clients, ICICI Lombard has been consistently recognized for its innovative
solutions and customer – centric approach. The company endeavours to provide customised
insurance products to their customers. ICICI Bank is deeply engaged in human and economic
development at the national level. The Bank works closely with ICICI Foundation across
diverse sectors and programs. During the year 2003-04 it became the largest private sector
general insurer in India. During the year 2005-06 the company crossed the mark of 1 million

24
policies and crossed the receipt of Rs 1000 crore of Gross Direct Premium Income (GDPI). In
2009-10 the company settled more than 5 million claims. During the year 2013-14 the
company's profit after tax crossed Rs 500 croremark and the number of policies issued by the
company crossed 10 million. During the year 2014-15 the company's investment book size
crossed Rs 10000 croremark. During the year 2015-16 the company became the first general
insurance company in India to issue subordinated debt. During the year 2016-17 ICICI
Lombard General Insurance Company crossed Rs 10000 crore GDPI mark. In September
2019 ICICI Lombard General Insurance Company Limited came out with an initial public
offer wherein ICICI Bank and FAL proposed to sell 31761478 Equity Shares and 54485709
Equity Shares constituting 7.00% and 12.00% of the Company's issued and paid-up capital to
the public respectively. There was no fresh issue of shares from ICICI Lombard General
Insurance Company.

Corporate Vision
 We will be the most value creating and admired risk solutions company in India, with
global footprint.
 To be the market leader in the field of private general insurance.

Corporate Mission
 To bring innovative solutions to customers doorsteps.

25
26
 CHAPTER-2

REVIEW OF
LITERATURE

PRINCIPLES OF GENERAL INSURANCE

a) Principle of Utmost Good Faith- Any Insurance policy is issued by Insurance Company
based on this principle, meaning the statements made by the proposer/insured are relied upon
by the insurance Company in Good faith at the time of issuing the policy. Any information
which is found to be incorrect later gives the right to the insurance company to cancel the
policy/ not pay any claim under this Principle. Same way the insurance Company should
disclose the terms of the policy to the insured at the time of soliciting an insurance policy.

b) Principle of Insurable Interest- This principle implies that insurance is sought and given
to a person who has a right/interest in the subject matter of insurance. Meaning the said person

27
should/may suffer a loss in case the subject matter insured is damaged. For e.g. the owner of a
property has insurable interest in it

c) Principle of Indemnity- This principle implies that the insurance Company shall put the
insured back to the position he was in prior to the loss. The insurance company will
compensate for the actual amount of loss suffered by the insured and not any amount beyond
that.

d) Principle of Proximate Cause- This Principle implies that whenever a claim is registered
for a loss, the Insurance Company while settling the claim looks into the nearest/proximate
cause of loss. If the proximate cause of loss is covered under the Policy, then only the
Insurance Company shall admit any claim.

e) Principle of Subrogation- This Principle implies that once a loss is settled by an insurance
company, the right over that property passes over to the Insurance Company who may dealt
with such property in any way as it deems fit.

f) Principle of Contribution- This Principle implies that if there are multiple insurers insuring
the same loss, the insured can claim under the policy either from any one of the insurer or from
the entire insurer in proportion to the loss as a contribution. The insured shall not claim for the
same amount from different insurers i.e. he cannot make profit out of the loss by making the
same claim from different insurers.

g)The Principle of Utmost Good Faith- The duty of insured and the insurer to disclose all
relevant facts. This is relevant to both life and general insurance.

FUNCTIONS OF GENERAL INSURANCE

Functions of insurance can be divided into three categories

A. Primary Functions
B. Secondary Functions
C. Indirect Functions

A. PRIMARY FUNCTION

28
 To Provide Protections
The most important function of insurance is to provide protection against riskof loss. It is one
check the reality of the misfortune happening, and pay the cost ofdamages of losses.

 To Provide Certainty
We know future is totally uncertain. Any misfortune happening may occur at any stage of life.
The amount of loss and time of losses both are uncertain. No doubtbetter planning and
administration can reduce the chances of happening these types ofaccidents but it requires lots
of attention towards strengths and weaknesses, specialknowledge of the field after all these
precautions, the uncertainty remains steady.Insurance provides certainly towards the losses.
The policy holders pay the premiumto by certainty.

 Distribution of Risk
It is a co-operative effort where the risk is distributed among the group of people. Thus, noone
have to bear the losses occurred due to uncertainty.

B. SECONDARY FUNCTION

 Helps in Economic Progress

Insurance plays an important role in economic progress. It gives fully certaintyto the
industrialists towards the risks. The entrepreneurs can more concentrate on innovative and
profitable techniques of the production. They should not requirethinking over the
risks.Theindustrialists can establish new industries in environment. Thus, industrieshave got
development in economic and commerce of the nation.

 In Prevents Losses
Insurance plays vital role in preventing the losses. The amount of premium beminimized by
using such appliances like the fire extinguisher. If one uses interiormachinery which may be
caused for misfortune, the amount of premium will be high.Thus, indirectly, insurance
provides help to minimize the chances of risks. It will beuseful for the agencies which are
directly related with the same function like,

a) Loss prevention association of India.

29
 b) The salvage crops of loss prevention association of India.
c) Survey and inspection of risks, etc.

C. INDIRECT FUNCTION

 A Forced Savings
Life Insurance is also a method of savings in India. Income Tax Act givesrelief in payment of
income tax because government wants to habituate general publicto save money. It encourages
the habit of thrift and savings among the people. Thus, itbecomes compulsory savings to
people of nation.

 Promote Foreign Trade

It is compulsory to take marine insurance policy in foreign trade in India.Foreigners can’t issue
the foreign trade bill unless the cargo is fully insured. Thusforeign trade is totally depends
upon the insurance sector of the nation. It gives reliefto entrepreneurs from the uncertainty of
foreign trade.

 Others
Insurance provides certainties towards risks in entrepreneurship. It givesconfidence in general
public. It is one of the important source of investment whichdevelops the trade and commerce
of the nation.

TAX BENEFITS OF GENERAL INSURANCE

HEALTH INSURANCE

As per Section 80D of the Income Tax act, you can easily avail tax benefits on the premium
paid towards health insurance. This makes it a lucrative tax saving option that also safeguards
you against health perils.
Tax deduction under Section 80D for self, spouse and dependent children include:

 Up to ₹ 25,000 per year if you are below 60 years of age

 Up to ₹ 30,000 per year if you are above 60 years of age
Besides, you can avail additional deductions for your parents in the following manner:

30
 Up to ₹ 25,000 per year if they are below 60 years of age
 Up to ₹ 30,000 per year if they are above 60 years of age
Therefore, you can avail a maximum deduction of ₹60,000 if you and your parents are senior
citizens. The amount mentioned above is inclusive of ₹5,000 for preventive health check-up

MOTOR INSURANCE

If a car is used for business purpose, the premium paid for car insurance can be treated as an
expense. There is no maximum limit on the insurance premium amount that is claimed as an
expense, provided that the car is used only for a business purpose.
However, if the car is being used for a personal purpose, the insurance premium cannot be
treated as an expense. If the car is sometimes used for a personal purpose and sometimes for
business, then a deduction can be allowed for the premium for the duration where it has been
used for business.

CHAPTER- 3

OBJECTIVES OF THE
31
 STUDY

OBJECTIVES OF THE STUDY

 To study and compare the financial position of public sector companies with private sector
companies through ratio analysis.
 To analyse the profitability position of public and private sector companies.
 To compare the solvency position of the public sector general insurance companies with
private sector.
 To analyse the products and services offered by public sector companies with private sector
companies.

32
 NEED OF THE STUDY

The need of the study is limited as this research is being done for the completion of the
requirement for the degree of Masters of Business Administration (Session 2019 – 2019).
Along with this the study leads to the Comparison of general insurance companies of public
sector with private sector.

The financial statements and products and services of the public and private sector general
insurance companies would be studied. With the help of these statements we will come to
know about the liquidity, solvency and profitability position of the business and the factors
that affect the business. We would also come to know about the different kinds of the
products and services offered by the company.

CHAPTER-4

33
 RESEARCH
METHODOLOGY

RESEARCH METHODLOGY

Research in common parlance refers to a research for knowledge. It is also defined as a

scientific and systematic search for pertinent information on a specific topic. In fact it is an
art of scientific investigation. Research is not only concerned to the decision of the fact but
also building up to date knowledge and to discover the new facts involved through the
process of dynamic change in the society.

AREA OF THE STUDY

34
For this research project the universe of study has been confined to GENERAL
INSURANCE COMPANIES.

RESEARCH DESIGN

Under this project the research design is descriptive in nature because to conduct the study
past year data is used and on this basis the results are achieved. Study is a part of conclusive
research design under which we make a design, which would provide us some relevant result.

STATISTICAL TOOLS & TECHNIQUES

The statistical techniques like Comparative Balance Sheet, Comparative Income Statement,
and Ratios have been used in the study. These have been very useful in doing the
interpretation and analysis of the data collected through secondary sources. For this purpose I
have used following ratios:
1. Liquidity Ratios

2. Debt Coverage Ratios

3. Profitability Ratios
4. Balance Sheet Ratios
5. Management Efficiency Ratios
6. Investment Valuation Ratios

DATA PRESENTATION
The results have been presented with the help of tables& Charts which clearly represents that
the research conducted is a Formal Research and the Research Design is a sound one.

DETERMINING THE SOURCE OF DATA

The next step is to determine the source of data to be used. The marketing research may be
based on primary or secondary data or on both.

In this report I have used the information gathered through secondary datawhich include
mainly the:
 Websites and material available on Internet with regard to area of study.
 Detailed study of the existing books, magazines and Journals.
 Companies’ Balance sheet.

35
 Companies’ profit and loss account

CHAPTER 5
36
 DATA ANALYSIS AND
INTERPRETATION

DATA ANALYSIS AND INTERPRETATION

RATIO ANALYSIS

A ratio analysis is a quantitative analysis of information contained in a company’s financial

statements. Ratio analysis is used to evaluate various aspects of a company’s operating and
financial performance such as its efficiency, liquidity, profitability and solvency and it is a

37
form of Financial Statement Analysis that is used to obtain a quick indication of a firm's
financial performance in several key areas. The ratios are categorized as Short-term Solvency
Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and Market
Value Ratios.

Ratio Analysis as a tool possesses several important features. The data, which are provided
by financial statements, are readily available. The computation of ratios facilitates the
comparison of firms which differ in size. Ratios can be used to compare a firm's financial
performance with industry averages. In addition, ratios can be used in a form of trend
analysis to identify areas where performance has improved or deteriorated over time. A ratio
is a statistical yardstick that provides a measure of the relationship between two variables or
figures. This relationship can be expressed as a per cent or as a quotient. Ratios are simple to
calculate and easy to understand. The persons interested in the analysis of financial
statements can be grouped under three heads,

i) Owners or investors

ii) Creditors and

iii) Financial executives

Definition of Ratio Analysis

“Ratio is a fraction whose numerator is the antecedent and denominator the consequent”.

“Ratio is an expression of one number in terms of another”.

“Ratio may also be defined as the relationship or proportion that one amount bears to another,
the first number being the numerator and the later denominator”.

“Ratio analysis is the process of examining and comparing financial information by

calculating meaningful financial statement figure percentages instead of comparing line items
from each financial statement”.

Interpretation of the Ratios

Ratio Analysis is one of the most powerful tools of financial analysis. It is used as a device to
analyse and interpret the financial health of an enterprise. It is with the help of ratios that the

38
 financial statements can be analysed more clearly and decisions made from such analysis.
The use of ratios is not confined to financial managers only. There are different parties
interested in the ratio analysis for knowing the financial position of a firm for different
purposes. The supplier of goods on credit, banks, financial institutions, investors,
shareholders and management all make use of ratio analysis as a tool in evaluating the
financial position and performance of a firm for granting credit, providing loans or making
investments in the firm. With the use of ratio analysis, one can measure the performance of
the firm is improving or deteriorating. Thus, ratios have wide applications and are if immense
use of today.

Guidelines or Precautions for use of ratios:

1. Accuracy of financial statements: The ratios are calculated from the data available in
financial statements. Before calculating ratios one should see whether proper concepts and
conventions have been used for preparing financial statements or not. These statements should
also be properly audited by competent auditors. The precautions will establish the reliability of
data given in financial statements.

2. Objective or purpose of analysis: The type of ratios to be calculated will depend on the
purpose for which these are required. The purpose or object for which ratios are required to be
studied should always be kept in mind for studying various ratios. Different objects may require
the study of different ratios.

3. Selection of ratios: Another precaution in ratios analysis is the proper selection of

appropriate ratios. The ratios should match the purpose for which these are required. Only those
ratios should be selected which can throw proper light on the matter to be discussed.

4. Use of standards: The ratios will give on indications of financial position only when
discussed with reference to certain standard. These standards may be rule of thumb as in case of
current ratio {2:1} and acid test ratio {1:1} may be industry standards, may budget or projected
ratios etc.

5. Calibre of the analyst: The ratios are the only tools of analysis and their interpretation will
depend upon the calibre and competence of the analyst.

39
6. Ratios provide only a base: The ratios are only guidelines for the analyst he should not base
his decisions entirely on them. He should study any other relevant information, situation in the
concern, general economic environment etc. before reaching final conclusions.

Classification according to significance or importance

The ratios have also been classified according to their significance or importance. Some ratios
are more important than others and the firm may classify them as primary and secondary ratios.
The British Institute of Management has recommended the classification of ratios according to
importance for inter firm comparisons. For inter firm comparisons, the ratios may be classified
as primary or secondary ratios. The primary ratio is one which is one of prime importance to a
concern, thus return on capital employed is named as primary ratio. The other ratios which
support or explain the primary ratio are called secondary ratio, e.g. the relationship of operating
profit to sales or the relationship of sales to total assets of the firm.

Current Ratio:

The current ratio is also called the working capital ratio, as working capital is the difference
between current assets and current liabilities. This ratio measures the ability of a company to
pay its current obligations using current assets. The current ratio is calculated by dividing
current assets by current liabilities.

40
 Current Ratio = Current assets / Current liabilities

Year UIIC NICL BAJAJ ICICI

2016-17 0.25 0.31 0.22 0.42
2019-18 0.22 0.31 0.2 0.45

0.45
0.42
0.45
0.4 0.310000000000 0.310000000000
0.35 001 001
0.3 0.25
0.22 0.22
0.25 0.2
0.2
0.15
0.1
0.05
0
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the current ratio of both Public and Private
sector companies for the year 2016-2019 is 0.25, 0.31, 0.22, and 0.42 and for the year
2019-2020 is0.22, 0.31, 0.2, and 0.45.

 Since the ideal current ratio for an organization is 2:1, which means that both the
Public and Private companies havea very less current ratio as compared to the ideal
one is concerned.

 Still the Current Ratio of ICICI is marginally higher than of UIIC, NICL and BAJAJ
which means that ICICI is just in a slightly better position in comparison to others.

Liquid Ratio:

The liquid ratio is also called the quick ratio. Quick assets are defined as cash, marketable
or short term securities, and accounts receivable and notes receivable, net of the allowances
for doubtful accounts. These assets are considered to be very liquid. . It measures the ability

41
of a business to pay its short-term liabilities by having assets that are readily convertible
into cash.

Liquid Ratio = [Current Assets – Inventory + Prepaid Expenses] / Current Liabilities

Year UIIC NICL BAJAJ ICICI

2016-17 0.18 0.25 0.25 0.13
2019-18 0.16 0.15 0.27 0.1

0.3 0.27
0.25 0.25
0.25

0.18
0.2
0.16
0.15
0.13
0.15
0.1
0.1

0.05

0
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the liquid ratio of UIIC, NICL, BAJAJ, ICICI
for the year 2016-2019 is 0.18, 0.25, 0.25, and 0.13 and for the year 2019-2020 is0.16,
0.15, 0.27, and 0.1.

 Since a liquid ratio of 1:1 is considered satisfactory. So, from the above analysis we
conclude that the companies do not have the enough liquid assets.

 Still the Liquid Ratio of BAJAJ is marginally higher than of UIIC, NICL and BAJAJ
which means that BAJAJ is just in a slightly better position in comparison to others
and as compared to others they can meet their short term obligations on time.

Absolute Liquid Ratio:

42
The relationship between the absolute liquid assets and current liabilities is established by
this ratio. Absolute Liquid Assets take into account cash in hand, cash at bank, and
marketable securities or temporary investments. The most favourable and optimum value for
this ratio should be 1: 2. If the ratio is relatively lower than one, it represents the company’s
day-to-day cash management in a poor light. If the ratio is considerably more than one, the
absolute liquid ratio represents enough funds in the form of cash in order to meet its short-
term obligations in time.

Absolute Liquid Ratio = Absolute Liquid Assets / Current Liabilities

Year UIIC NICL BAJAJ ICICI

2016-17 0.07 0.05 0.06 0.01
2019-18 0.07 0.03 0.06 0.02

0.07 0.07
0.07 0.06 0.06
0.06 0.05
0.05
0.04 0.03
0.03 0.02
0.02 0.01
0.01
0.00
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the absolute liquid ratio of UIIC, NICL,
BAJAJ, ICICI for the year 2016-2019 is 0.07, 0.05, 0.06, and 0.01 and for the year
2019-2020 is0.07, 0.03, 0.06, and 0.02.

 As it is considered that higher the absolute liquid ratio better it is for the organization
and ideal ratio is 1 which means that each and every have very less Absolute Liquid
Ratio.

 Since the ratio of UIIC is 0.07 which is higher than others so, it is in a better position
to convert its assets into cash immediately.

43
Operating Profit / Loss Ratio:
Operating Profit / Loss Margin is a profitability or performance ratio used to calculate the
percentage of profit / loss a company produces from its operations, prior to subtracting taxes
and interest charges. Operating income is often called earnings before interest and
taxes (EBIT). Operating income or EBIT is the income that is left on the income statement,
after all operating costs and overhead, such as selling costs, administration expenses and cost
of goods sold are subtracted.  

Operating Profit / Loss Ratio = Operating Profit or Loss / Total Revenue

Year UIIC NICL BAJAJ ICICI

2016-17 4.22% -6.50% 16.20% 11%
2019-18 -19.41% -25.11% 19.31% 13%

19.31%
16.20%
20.00% 13.00%
15.00% 11.00%
10.00% 4.22%
5.00%
0.00%
2016-17 2017-18
-5.00%
-10.00% -6.50%
-15.00%
-20.00%
-19.41%
-25.00%
-30.00% -25.11%

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the operating profit/ loss ratio of UIIC, NICL,
BAJAJ, ICICI for the year 2016-2019 is 4.22%, -6.50%, 16.20% and 11% and for the
year 2019-2020is -19.41%, -25.11%, 19.31% and 13%.

 As it is considered that 75% -80% operating ratio is good for a company. So, from
above table it is revealed that operating profits of the UIIC and NICL is declined
which means that they does not produce profits from its operations and they have to
bear loses in the future.

44
  Since, the operating profits of the BAJAJ and ICICI are increasing which means that
they are earning more profits from its operations.

Earning Per Share:

Earnings per share represent the net income earned for each share of outstanding common
stock. Earnings per share are the portion of a company's profit allocated to each share of
common stock. Earnings per share serve as an indicator of a company's profitability.

Earnings per Ratio = Net Income / Weighted Average Common Shares Outstanding

Year UIIC NICL BAJAJ ICICI

2016-17 126.17 4.58 66.03 15.66
2019-18 65.92 -217.08 83.58 19.01

126.17
150
83.58
100 66.03 65.92

50 15.66 19.01
4.58
0
2016-17 2017-18
-50

-100

-150

-200
-217.08
-250

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the earning per share of UIIC, NICL, BAJAJ,
ICICI for the year 2016-2019 is 4.22%, -6.50%, 16.20% and 11% and for the year
2019-2020is -19.41%, -25.11%, 19.31% and 13%.

 From the above graph it has been revealed that the earning per share of the UIIC and
NICL is decreasing over the years which means that there profitability is decreasing.

45
  As compared to UIIC and NICL the earning per share of the BAJAJ and ICICI is
increasing which means that there profitability is increasing over the years.

Net Earning Ratio:

Net earnings represent the amount of sales revenue left over after all operating expenses,
interest, taxes and preferred stock dividends have been deducted from acompany’s total
revenue.

Net Earning Ratio = Net Earnings / Total sales *100

Year UIIC NICL BAJAJ ICICI

2016-17 -14.33% 0.43% 13.73% 11%
2019-18 8.09% -18.93% 13.68% 12%

13.73% 13.68%
15.00% 11.00% 12.00%
8.09%
10.00%

5.00%
0.43%
0.00%
2016-17 2017-18
-5.00%

-10.00%

-15.00%
-14.33%
-20.00% -18.93%
UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the earning per share of UIIC, NICL, BAJAJ,
ICICI for the year 2016-2019 is 14.33%, 0.43%, 13.73% and 11% and for the year
2019-2020is 8.09%, -18.93%, 13.68% and 12%.

46
  This graph shows that the net earnings ratio of the UIIC, NICL and BAJAJ are
decreasing which interprets that the companiesare continuously decreasing its
earnings on its sales and will not be able to meet the competition in the market.

 It has also been revealed that ICICI is earning more profits on its total sales and able
to meet competition in the market.

Return on Net Worth Ratio:

Return on net worth is used in finance as a measure of company’s profitability. It reveals how
much profit a company generates with the money that the equity shareholders have invested.
Therefore, it is also called as Return on Equity (ROE). This ratio is useful for comparing the
profitability of a company to that of other firms in the same industry.

Return on Net Worth Ratio = Net Income / Shareholders Equity*100

Year UIIC NICL BAJAJ ICICI

2016-17 -50.11% 1.21% 21.00% 19%
2019-18 20.90% -123.30% 21.00% 19%

40.00% 21.00%19.00% 20.90% 21.00%19.00%

20.00% 1.21%

Interpretation: 0.00%
2016-17 2017-18
-20.00%
 It is -40.00%
-60.00% -50.11%
-80.00%
-100.00%
-120.00%
-123.30%
-140.00%

UIIC NICL BAJAJ ICICI

revealed from the above graph that thereturn on net worth ratio of UIIC, NICL,
BAJAJ, ICICI for the year 2016-2019 is -50.11%, 1.21%, 21% and 19% and for the
year 2019-2020is 20.90%, -123.30%, 21% and 19%.

47
  From the above graph it is depicted that the NICL does not have the satisfactory
return on net worth.

 As compared to NICL other companies have the satisfactory return on investment and
the companies are generating the profits on the funds invested by equity shareholders.

Gross Non-Performing Assets Ratio (Gross NPA):

Gross NPA Ratio is the ratio of total gross NPA to total advances. Gross NPA is the
summation of all loan assets that are classified as NPA as per RBI guidelines. Gross NPA
consists of Substandard Assets, Doubtful Assets and Loss Assets. Gross NPA is the total loan
outstanding with bank making provision for writing off any part or full.

Gross NPA = Total NPA / Total Advances*100

Year UIIC NICL BAJAJ ICICI

2016-17 0.44% 0.44% 0.00% 0.00%
2019-18 0.36% 1.76% 0.00% 0.00%

1.76%
1.80%
1.60%
1.40%
1.20%
1.00%
0.80%
0.60% 0.44% 0.44%
0.36%
0.40%
0.20% 0.00% 0.00% 0.00% 0.00%
0.00%
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the gross non-performing assets of UIIC,
NICL, BAJAJ, ICICI for the year 2016-2019 is 0.44%, 0.44%, 0% and 0% and for the
year 2019-2020 is 0.36%, 1.76%, 0% and 0%.

48
  After the analysis it has been revealed that the total non-performing assets of the UIIC
is decreasing which means its assets are performing well as compared to previous
year.

 It has also been revealed that the total non-performing assets of the NICL is
increasing which means that its assets are not performing well and others companies
do not have the non-performing assets.

Net Non- Performing Assets (Net NPA):

The net NPA to loans (advances) ratio is used as a measure of the overall quality of the
bank's loan book. An NPA are those assets for which interest is overdue for more than 90
days. Net NPAs are calculated by reducing cumulative balance of provisions outstanding at a
period end from gross NPAs. Higher ratio reflects rising bad quality of loans.

Net NPA = Gross NPA - Provision

Year UIIC NICL BAJAJ ICICI

2016-17 0.00% 0.01% 0.00% 0.00%
2019-18 0.00% 0.39% 0.00% 0.00%

0.39%
0.40%
0.35%
0.30%
0.25%
0.20%
0.15%
0.10%
0.05% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00%
0.00%
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

49
  It is revealed from the above graph that the net non-performing assets of UIIC, NICL,
BAJAJ, ICICI for the year 2016-2019 is 0%, 0.01%, 0% and 0% and for the year
2019-2020is 0%, 1.39%, 0% and 0%.

 From the above table it has been revealed that the UIIC, BAJAJ and ICICI do not
have any net non-performing assets.

 It has also been revealed that the net non-performing assets of the NICL is increasing,
which in turn reflects the bad quality of loans by NICL.

Net Retention Ratio:

The retention ratio is the proportion of earnings kept back in the business as retained
earnings. The retention ratio refers to the percentage of net income that is retained to grow
the business, rather than being paid out as dividends. It is the opposite of the pay-out ratio,
which measures the percentage of profit paid out to shareholders as dividends. The retention
ratio is also called the plowback ratio.

Net Retention Ratio = Retained Earnings / Net Income

Year UIIC NICL BAJAJ ICICI

2016-17 81.27% 72.45% 69.00% 60.00%
2019-18 70.02% 69.27% 71.00% 62.00%

50
 90.00% 81.27%
80.00% 72.45% 70.02% 69.27% 71.00%
69.00%
70.00% 60.00% 62.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the net retention ratio of UIIC, NICL, BAJAJ,
ICICI for the year 2016-2019 is 81.27%, 72.45%, 69% and 60% and for the year
2019-2020is 70.02%, -69.27%, 71% and 62%.

 From the above analysis, it is revealed that the insurance companies are not following
the uniform policy in retaining the funds.

 It has also been revealed that the public sector companies’ retention ratio is
decreasing and private sector companies are retaining more earnings.

Combined Ratio:

The combined ratio, also called "the combined ratio after policyholder dividends ratio," is a
measure of profitability used by an insurance company to gauge how well it is performing in
its daily operations. The combined ratio measures the money flowing out of an insurance
company in the form of dividends, expenses, and losses. A ratio below 100 per cent indicates
that the company is making an underwriting profit, while a ratio above 100 percent means
that it is paying out more money in claims that it is receiving from premiums.

Combined Ratio = [Incurred Losses +Expenses] / Earned Premium

Year UIIC NICL BAJAJ ICICI

2016-17 134.00% 134.93% 97.00% 104.00%

51
 2019-18 120.73% 149.24% 92.00% 100.00%

149.24%
160.00%
134.93%
134.00%
140.00% 120.73%
120.00% 104.00% 100.00%
97.00% 92.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
2016-17 2017-18

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the combined ratio of UIIC, NICL, BAJAJ,
ICICI for the year 2016-2019 is 134%, 134.93%, 97% and 104% and for the year
2019-2020is 120.73%, 149.24%, 92% and 100%.

 Generally a ratio of 100% indicates that the company is making

an underwriting profit, and from the above analysis it has been revealed that UIIC and
NICL is paying more money in claims then receiving premiums. It means that there
overall expenses are more than their premiums.

Underwriting Balance Ratio:

Underwriting Balance Ratio is also known as Underwriting Expense Ratio. The underwriting
expense ratio is a mathematical calculation used to gauge an insurance company's
underwriting success. Underwriting companies use the underwriting expense ratio to make
sure that they are not spending too much money paying out claims and other underwriting
expenses.

Underwriting Balance Ratio = Underwriting Expenses / Earned Premium

Year UIIC NICL BAJAJ ICICI

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2016-17 -36.94% -0.34% 1.00% -0.05%
2019-18 -19.77% -0.50% 5.00% -0.03%

5.00%
5.00% 1.00%
0.00%
2016-17
-0.34% -0.05% 2017-18
-0.50% -0.03%
-5.00%
-10.00%
-15.00%
-20.00%
-19.77%
-25.00%
-30.00%
-35.00%
-40.00% -36.94%

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the underwriting ratio of UIIC, NICL, BAJAJ,
ICICI for the year 2016-2019 is -36.94%, -0.34%, 1% and -0.05% and for the year
2019-2020is -19.77%, -0.50%, 5% and -0.03%.

 From the above analysis it has been revealed underwriting ratio of the companies is
increasing, which means companies are spending too much money paying out claims
and other underwriting expenses as compared to the previous year.

Net Commission Ratio:

A commission is a fee that a business pays to a salesperson in exchange for his or her
services in either facilitating or completing a sale. Calculating a sales commission depends
on the structure of the underlying commission agreement. Net commission expense as a
percentage of net earned premiums.

Net Commission Ratio = Net Sales* Commission Rate

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 Year UIIC NICL BAJAJ ICICI
2016-17 4.69% 2.74% 1.00% -7.00%
2019-18 5.39% 9.60% 5.00% -4.00%

9.60%
10.00%
8.00%
5.39% 5.00%
6.00% 4.69%

4.00% 2.74%
1.00%
2.00%
0.00%
2016-17 2017-18
-2.00%
-4.00%
-4.00%
-6.00%
-8.00% -7.00%

UIIC NICL BAJAJ ICICI

Interpretation:

 It is revealed from the above graph that the net commission ratio of UIIC, NICL,
BAJAJ, ICICI for the year 2016-2019 is 4.69%, 2.74%, 1% and -7% and for the year
2019-2020is 5.39%, 9.60%, 5% and -4%.

 From the above graph it has been revealed that the companies are paying more
commission to its agents as a fee for their services, which means that their net
commission expense as a percentage of net earned premiums has increased over the
year and the companies are left with less profit as compared to previous year.

Solvency Margin Ratio:

   Solvency Margin Ratio” means the ratio of the amount of Available Solvency Margin to the
amount of Required Solvency Margin. Available solvency margin means the value of assets
over the value of life insurance liabilities and other liabilities of policyholders’ funds and
shareholders’ funds.

54
Solvency Ratio = Total available Solvency Margin / Total required Solvency Margin

Year UIIC NICL BAJAJ ICICI

2016-17 1.15 1.9 2.61 2.05
2019-18 1.54 1.55 2.76 2.05

3 2.76
2.61

2.5
2.05 2.05
1.9
2
1.54 1.55
1.5 1.15

0.5

0
2016-17 2017-18

UIIC NICL BAJAJ ICICI

 
Interpretation:
 It is revealed from the above graph that the solvency margin ratio of UIIC, NICL,
BAJAJ, ICICI for the year 2016-2019 is 1.15, 1.9, 2.61 and 2.05 and for the year
2019-2020 is 1.54, 1.55, 2.76 and 2.05.

 From the above analysis it is revealed that the solvency margin of the firm is
increasing, which means that the firm is able to meet its long term obligations easily
as compared to previous years.

 It has also been revealed that they are able to meet uncertain or unforeseen exigencies.

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 CHAPTER-6

FINDINGS

FINDINGS

 On the basis of the comparative analysis it is observed that the current ratio of the firm is not
satisfactory. As we known the ideal current ratio of the firm is 2:1.

56
 The liquidity position of the BAJAJ is better than others. So they are able to meet their short
term obligations on time.

 It has also been revealed that the net retention ratio of the firm is fluctuating which means
that they are not following uniform policy of retention ratio over the years.

 It has been find out that the absolute liquid ratio of UIIC is 0.07 which is higher than others
so, it is in a better position to convert its assets into cash immediately.

 It has been find out that as compared to NICL other companies have the satisfactory return on
investment and the companies are generating the profits on the funds invested by equity
shareholders.

 It has been revealed that the companies earning per share over the years is decreasing which
indicates that the insurance companies’ profitability is low and it is a negative indicator for
the shareholders and they will get low earning per share.

 It has been found out that the companies solvency margin ratio is increasing, which means
they are able to meet long term obligations and unforeseen exigencies.

 It has been revealed from the combined ratio that the UIIC and NICL is paying more money
in claims then receiving the premiums. It means that there overall expenses are more than
their premiums.

 On the basis of comparative analysis it has been revealed that the net earnings ratio of the
UIIC, NICL and BAJAJ are decreasing and net earnings ratio of the ICICI is increasing
which means that it can easily meet the competition in the future.

57
 CHAPTER-7

SUGGESTIONS

SUGGESTIONS

58
 The current ratio of the companies doesn’t reach the standard ratio so companies need to
concentrate on increasing the current ratio by increasing in current assets.

 Companies should concentrate on following the uniform policy for retaining the earnings of
the firm.

 In order to overcome the expenses the firm may reduce the operating expenses.

 Companies need to focuses on its non-performing assets.

 NICL need to focus on the return on net worth. Because they are generating very less profits
on the shareholders’ funds.

 The companies should conduct weekly meeting for measuring the performance of the firm.

 Companies need to focus on the underwriting ratio. As they are spending too much money
paying out claims and other underwriting expenses as compared to the previous year.

59
CHAPTER-8

CONCLUSION

60
 CONCLUSION

The overall study and analysis reveals that BAJAJ and ICICI is in a very healthy position as
it is enjoying good profitability & is in an advantageous position when compared with UIIC
and NICL which is yielding negative outcomes for the current year. As from the above
analysis it has been concluded that operating profits and net earnings ratio of the UIIC and
NICL is decreasing which means their profitability position is decreasing over the year. From
the study it can be concluded that liquidity position of the ICICI is better that the others. It
has also been concluded that the solvency margin of the companies is increasing and they
will be able to meet the long term obligations of the companies in the long run. From the
above analysis, it is revealed that the insurance companies are not following the uniform
policy in retaining the funds. Generally a combined ratio of 100% indicates that the company
is making an underwriting profit, and from the above analysis it has been revealed that UIIC
and NICL is paying more money in claims then receiving premiums. It means that there
overall expenses are more than their premiums. So, from the overall it has been revealed that
private sector companies are enjoying better position that the public sector companies.

61
 CHAPTER-9

BIBLIOGRAPHY

62
BIBLIOGRAPHY

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Advance Research in Computer Science and Management Studies. Vol. 3(2), pp 252- 257.
 Muthusamy A. (2019). A STUDY ON MARKET SHARE OF NON-LIFE INSURANCE
COMPANIES IN INDIA. International Journal of Commerce, Business and
Management. Vol. 6(3), pp 40-47.
 Mahapatra P. &Tripathy S. (2014). The Determinants of Growth Barriers and Influential
Growth of Indian Non-Life Insurance Industries. International Journal of Management &
Business Studies. Vol. 4(4). Pp 15-20.
 Rajeev M. & Kader M. (2016).A Study of the Impact of Privatization on The
Performance Of Indian General Insurance Sector. International Journal of Engineering
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 Kavitha T. &Latha A. &Jamuna S. (2012).Customers’ Attitude towards General
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Websites:

 http://www.yourarticlelibrary.com/insurance/7-most-important-principles-of-insurance/
7536
 https://nationalinsuranceindia.nic.co.in/portal/page/portal/Corporate/Home
 https://www.bajajallianz.com/Corp/aboutus/general-insurance-company.jsp
 https://www.icicilombard.com/about-us
 https://www.google.com/search?
q=UIIC+ABOUT+US&rlz=1C1PRFC_enIN795IN795&oq=UIIC+ABOUT+US&aqs=ch
rome..69i57j0.7351j0j8&sourceid=chrome&ie=UTF-8#

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