Industry profile: Basic concept of Insurance is offsetting the Risk. Insurance is a readable contract. There are some types of insurance contracts in which if you return to the Insurance company, you will receive money against it. But basically, Insurance is a contract that helps you offset the Risk.
As per the Swiss Re Institute sigma No 3/2017 report, in 2016, global life premiums are estimated to have increased by 2.5%; premium growth declined in the developed 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%. Regarding the market share of life insurance, Asia is the largest continent, accounting for 38% of the 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 worldwide insurance industry, around 55% of premium comes from life insurance and the rest from the non–life segment; in emerging markets, approximately 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, the increased use of technology, the availability of 4G technology, and the Financialization of Savings play a crucial role in the sector. For private players, the share of bancassurance in new business premiums 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 the Largest Private Life Insurance company per premium collected. It is a joint venture of ICICI Bank and Prudential Corporation Holdings Limited. The company holds a 9.7% market share in the overall Insurance sector and 22% in the Private life insurance segment. The bancassurance channel of the bank is powerful. ICICI Securities, ICICI Bank, Standard Chartered Bank, and capital small finance bank are selling products of the company.
Shareholding Pattern: BSE Data
Financials and ratios : [table id=102 /]
Future prospectus: As an analyst, what I am watching is all there. Capital adequacy, Low ULIP, attractively combined ratio, lower-Expense ratios. It is all there. As technology leverages, the expense ratio is expected to reduce over time. All and all, it’s a great company.
