ICICI Lombard Company analysis

 

Industry Profile  : The size of the Indian non -life insurance sector was ₹ 1.28 trillion on a GDPI basis as of 31st March 2017 and grew at a CAGR of 17.4% between fiscal 2001 and fiscal 2017. The sector offers different products such as motor, health, crop, fire, marine, liability, travel, aviation and home insurance aimed at meeting different protection needs of retail customers, government as well as corporate customers. The industry operates under a “cash before cover” model under which insurers are not required to assume underwriting risk until premiums are received except in the case of government sponsored schemes such as mass health and crop insurance. According to Swiss Re, India was fifteenth largest market in the world and the fourth largest market in Asia in 2016, behind China, Japan and South Korea. India was also amongst the fastest growing non – life insurance markets over 2011 – 2016, growing at 14.5% (as per Swiss Re). Despite its size and growth profile, India continues to be an underpenetrated market with a non – life insurance penetration of 0.77% in 2016, as compared to 1.81% in China, 1.70% in Thailand, 1.67% in Singapore and 1.62% in Malaysia and a global average of 2.81% in 2016.

According to Swiss Re, India was fifteenth largest market in the world and the fourth largest market in Asia in 2016, behind China, Japan and South Korea. India was also amongst the fastest growing non  – life insurance markets over 2011 – 2016, growing at 14.5% (as per Swiss Re). Despite its size and growth profile, India continues to be an underpenetrated market with a non – life insurance penetration of 0.77% in 2016, as compared to 1.81% in China, 1.70% in Thailand, 1.67% in Singapore and 1.62% in Malaysia and a global average of 2.81% in 2016.
As of March 31, 2017, there were a total of 30 companies in the Indian non – life insurance sector, namely
  • Four public sector companies offering multiple products – National Insurance Company, The New India Assurance, Oriental Insurance Company and United India Insurance
  • 18 private sector companies offering multiple products. ICICI Lombard General Insurance is one of them.
  • Two public sector specialised single product line non – life insurance companies – Agriculture Insurance Company (AIC), and Export Credit Guarantee Corporation (ECGC)
  • Six standalone private health insurance companies – Apollo Munich, Cigna TTK, Max Bupa, Religare Health, Star Health, and Aditya Birla

Single product insurance is not holding large market share, only 11%. Out of it Public sector Agriculture Insurance Dominate with 6%, Private health insurance hold 4% remaining 1% held by Export credit insurance. Motor insurance hold large part in Multi product insurance, Private players lead with 11 vs 7% against PSU.

Company profile  : ICICI Lombard General Insurance, is general insurance company providing various services like health insurance, Motor insurance, Crop Insurance, Fire insurance,Personal accident insurance, liability insurance, travel insurance, marine insurance. It was promoted by Fair fax and ICICI bank. The company is the largest private – sector non – life insurer in India based on gross direct premium income in fiscal 2017. Having parents like Fairfax and ICICI Helps the company in many terms like distribution channels. The company holding large distribution channel including 48 corporate agents including ICICI bank, Tie ups with motor manufacturar like maruti, Reason why its fastest growing segemnt of the company with 42%+ growth, 20383 individual agents, direct sales and digital sales.

Shareholding pattern  :  55.92% held by Promoter ICICI Bank. 7.7% held by Mutual Funds. 0.04% held by Financial Institutions other than ICICI Bank. 5.51% held by Foreign investors. Red Bloom Investment Ltd, a company managed by Warburg Pincus LLC, held 9%. IIFL Special opportunity fund and Tamarind Capital Pte. Ltd. are large public holders. Remaining is held by public.

Financials and Ratio  :  

 2012 - 132-13 - 142014 - 152015 - 162016 - 17
Premium ReceivedNumber Not given by company in Prospectus
Reinsurance ExpensesNumber Not Given by Company in Prospectus
Net Premium4,012.304,352.254,234.054,826.346,157.78
Income from Investment460.47654.65779.23929.59728.53
Total income4,487.395,028.415,044.815,804.257,180.49
Net Benefits Paid3,350.173,628.893,445.603,939.064,965.57
Commission183.12229.09346.25327.97434.13
Operating Expenses1,019.421,215.791,387.061,711.201,982.04
Expenses ratio29.98%33.19%40.93%42.25%39.23%
Loss ratio83.49%83.37%81.37%81.61%80.63
Combined ratio113.46%116.57%102.65123.86%119.87%
Investment income ratio11.47%15%18.4%19.26%11.83%
Net Profit380.10551.48585.82504.07622.10
EPS8.5912.2713.0511.2013.81
ROE21.61%22.84%20.16%15.48%16.70%
FlotsNot Given By company.
Solvency ratio155%172%195182%210%
NAV40.2454.2465.0872.7482.57

Future Prospectus  :  General insurance market is not much penetrated in India. It is growing. Being largest Private sector insurance company. the growth potential is large. Most financials are good. the company is paying dividend also.

  • 0

    Overall Score

  • Reader Rating: 0 Votes

Share

About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter