ICICI Prudential Life Insurance Company analysis

Industry profile  :  Basic concept of Insurance is offsetting the Risk. Insurance is basically contract which is readable. There are some types of insurance contracts which if you return to Insurance company, you will receive money against it. But basically insurance is contract which is help you to offset the risk.
As per Swiss Re Institute sigma No 3/2017 report, in 2016, global life premiums are estimated to have increased 2.5%; premium growth declined in the advanced markets by 50 bps, but accelerated in the emerging markets. Life premiums in the emerging markets grew 17% in 2016 versus 12% in 2015, well above the overall growth of 2.5%. In terms of the market share of life insurance, Asia is the largest continent, accounting for 38% of premium collected. India’s share is just ~2.4% in the global life insurance market as of 2016, indicating the vast potential for growth in India’s life insurance industry. In the global insurance industry, around 55% of premium comes from life insurance and the rest from the non – life segment; in emerging markets, around 54% of premium comes from life insurance. By contrast, the share of life insurance is over 78% for India.
The financial inclusion initiative from govt, increased use of technology, availability of 4G technology, Financialization of Savings are playing key role in sector. For private players, the share of bancassurance in new business premium has been growing steadily over the past few years. which is also one large force.

Company profile  Incorporated on 20 July 2000, The company is Largest Private Life Insurance company as per premium collected.It is joint Venture of ICICI Bank and Prudential Corporation Holdings Limited. The company holding 9.7% market share in overall Insurance sector and 22% as Private life insurance segment. The bancasurance channel of the bank is very strong. ICICI Securities, ICICI Bank, Standard Charterd Bank and capital small finance bank are selling products of company.

Shareholding Pattern  :  ICICI bank holds 54.89% whereas PRUDENTIALS CORPORATION HOLDINGS LIMITED ( Foreign Promoter of the company holds 25.83% Mutual Funds hold 3.04%. Insurance companies ( Well they must be General insurance companies) Hold 0.38%. Foreign investors hold 6.25%. remaining around 9.59%

Financials and ratios  :  

 2011 - 122012 - 132013 - 142014 - 152015 - 162016 - 17
Premiums received14,021.5713,538.2412,428.6515,306.6219,164.3922,354.02
Reinsurance paid93.70121146146.17165.69198.75
Net Premium13,927.8713,417.2412,282.6515,160.4518,998.7022,155.24
Investment income(132.47)6,186.689,212.6018,738.541,208.3614,976.94
Total income14,213.5720,255.2821,608,3833,955.7620,227.9437,193.04
Net benefits paid8,455.2013,287.8812,073.9612,248.3512,406.0614,964.40
Commission605.47765.42627.48553.17619.98758.91
Operating Expenses1,773.311,713.101,616.171,654.331,888.332,357.19
Expense ratio17.07%18.47%18.26%14.57%13.20%14.06%
Loss ratio60.70%98.63%98.30%80.79%65.30%67.54%
Combined Ratio77.78%117.50%116.56%95.35%78.50%81.60%
Invt Income Ratio( 0.9%)46.10%75%123.60% 6.36%67.60%
Net Profit1,385.731,515.521,562.441,640.221,653.041,650.46
EPS9.6710.5810.9111.4511.5311.72
ROE55.0%43.7%37.4%34.0%31.2%
Flots 760.55508.25496.72527.34661.76604.18
Solvency369.8%393.2%369.4%336.5%320.0%
NAV20.927.730.736.837.244.64

Future prospectus  As analyst, what I am watching is all there. Capital adequacy, Low ULIP, attractive combined ratio, lower Expense ratios. Its all there. As technology is leveraging the expense ratio is expected to reduce over time. All and all its great company.

  • 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