Financial Performance Icici Life Insurance

FINANCIAL PERFORMANCE ICICI LIFE INSURANCE
1.1 INTRODUCTION
FINANCIAL PERFORMANCE
Financial Performance, as used in corporate business house refers to a set of reports

and schedule, which accounts for at the end of the period of the time for a business
enterprise. The financial statement is the means with the help of which the accounting
system perform its main function of providing summarized information about the
financial affairs of the business.
This statement comprises balance sheet or position statement and profit and
loss account or income statement. India, every company has to present its financial
statement in the form and contents as prescribed under Section 211 of the Indian
companies Act, 1956.
FINANCIAL ANALYSIS
Financial analysis is to be determined the significant operation and financial

characteristic of a firm form accounting data. It is a typical technique devoted to
evaluate the past, current and projected of a business firm.
Financial Analysis is an attempt to determine the significance and meaning of

financial statement data so that forecast may be made of the future prospects for
earnings, ability to pay interest and debt maturities and profitability.
Published financial statements are the only source of information about the activities
and affairs of a business entity available to the public, shareholders, investors and
creditors and the government these groups are interested in the progress, position
prospect of such entity in various ways.
But these statements howsoever, correctly and objectively prepared, by themselves

do not reveal the significance, meaning and relationship of the information contained
therein. For this propose, financial statements have to be carefully studied,
dispassionately analyzed and intelligently interpreted.
Financial analysis result in the presentation of information by arranging financial

statement data in a systematic manner that aids business managers, investor, and
financial statement can provide valuable insights into a companys performance.
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MEANING OF FINANCIAL PERFORMANCE
Financial analysis refers to an assessment of the viability, stability and profitability of

a business, sub business or project. It is prepared by professionals who prepared
report using ratios that make use of information taken from financial statement and
other reports. These reports are usually presented to top management as one of their
bases in making business decisions.
DEFINITION OF FINANCIAL PERFORMANCE
The process of evaluating business, budgets and other finance related entities to
determine their suitability for investment. Typically, financial analysis is used to
analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested
in.
When looking at a specific company, the financial analyst will often focus on
the income statement, balance sheet, and cash flow statement.
In addition, one key area of financial analysis involves extrapolating the

company`s past performance into an estimate of the company`s future performance.
Financial performance is concerned with the problems that a raise in attempting to

manage the current assets, the current liabilities and interrelation that exist between
them.
The term current assets refers to those assets which in the order course of
business can be, of will be, converted into cash within one year without undergoing a
diminution in value and without the disruption the operations of the firm.
The major current assets are cash, marketable securities, accounts receivables
and inventory. Current liabilities are those liabilities which are intended, at their
inception, to be paid in the ordinary course of a business within a year out of the
current assets or earnings of the concern.
The basic current liabilities are account payable, bank overdraft and
outstanding expenses.
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Purpose of financial performance:
The purposes of analyzing financial performance are as outlined below.
To inform owners about the financial position of the organization.

To inform managers the achievement or shortfalls in the performance o the
business.
To secure finance, to maintain finance and to fulfill statutory obligations.
To monitor performance of the business periodically.
To determine liquidity, solvency and profitability of the business.
Analysis of financial performance:
Analysis means examining something to know its contents in details it is the process
of evaluating the relationship between different variables in the financial statement
provides an undertaking of the financial matters of business such as the following.
How are the firms mobilizing resources?

How is the firm making profits or losses?
How is the firm maintaining its assets and liabilities?
How is the taking care of liquidity, solvency and profitability of the business
and so on?
In short analysis facilities decision making of every business concern analysis of of

financial statements involves an art by itself. This knowledge will help to identify the
right type or approach of analysis. There are different approaches for the study of the
financial statement the analysis of the study may range from time to time for the
same.
Firm or one firm to the other firm. The focus of the study varies depending upon the
users: internal or external
The term financial performance analysis also analysis also as analysis and
interpretation of financial statements, refers to the process of determining financial
strength and weaknesses of the firm by establishing strategic between the items of the
balance sheet, profit and loss account and other operative data.
Financial performance analysis is a process of evaluating the relationship between

component parts of a financial statement to obtain a better understanding of a firms
position and performance.
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The purpose of financial is to diagnose the information contained in financial

statements so as to judge the profitability and financial soundness of the firm. Just like
a doctor examines his patient by recording his body temperature, blood pressure etc.
before making his conclusion regarding the illness and before giving his treatment. A
financial analyst analysis before commenting upon the financial health or weakness of
an enterprise.
The analysis and interpretation of financial statement is essential to bring out the
mystery behind the financial statements. financial statements analysis is an attempt to
determine the significance and meaning of the financial statement data so that forecast
data so that forecast may be made of the future earnings, ability to pay interest and
debt maturities(both current and long term)and profitability of a sound divided policy.
Financial performance refers to the act of performing financial activity. In broader

sense, financial performance refers to the degree to which financial objectives being
or has been accomplished.
It is the process of measuring the results of a firms policies and operations in

monetary terms. it is used to measuring the results of a firms overall financial health
over a given period of time and can also be used to compare similar firms across the
same industry or to compare industries or sectors in aggregation .in short, the firm
itself as well as various interested group such as managers, shareholders, creditors, tax
authorities, and others seeks answers to the following important question.
1 .What is the financial position of the firm at a given point of time?
2. How is the financial performance of the firm over a given time?
These questions will be answered with the help of financial analysis of a

firm financial analysis involves the use of financial statements. A financial statement
is an organized collection of data according to logical and conceptual frame work 50
consistent accounting procedures.
It is purpose is to convey an understanding of some financial aspects of a

business firm. If may show a position at a moment of time as in the case of a balance
sheet, or may reveal a series of activities over a period o time, as in the case of an
income statement.
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Thus, the term financial statement generally refers to two basic statements.
The balance sheet and the income statement.
The balance sheet shows the financial position (condition) of the firm at a
given point of time. It provides a snapshot and may be regarded as a static
picture.
Balance sheet is a summary of a firms financial position on a given data that
Shows total assets=total liabilities to wheres equity.
The income statement (Refereed to in India is the profit and loss statement) reflects
the performance of the firm over a period of time.
Income statement is a summary of s firms revenues and expenses over a specified

period, ending with net income or loss for the period.
However, financial statements do not reveal all the information related to the financial
operation of a firm, but they furnish some extremely useful information, which
highlights two important factors profitability and financial soundness. Thus analysis
of financial statement is an important aid to financial performance analysis.
Financial performance analysis includes analysis and interpretation of

financial statements in such a way that it under takes full diagnosis of the profitability
and financial soundness of the business.
The analysis of financial statements is a process of evaluating the relationship

between component parts of financial statements to obtain a between component parts
of financial statements to obtain a better understanding of the firms position and
performance.
Financial analysis is a specialty of finances aimed at formulating a diagnosis and

prognosis relative to the situation and the financial performance o a company or an
organization. To achieve objective its striving to make an assessment of the level and
variability of results and risks affecting the enterprise bankruptcy.
Thus/it seeks to measures the value of the entity and its titles. Given the
nature and nature and purpose which it pursues, financial analysis develops the steps
of collecting, shaping and treatment of a range of management information which
may clarify wanted diagnosis and prognosis. Information handed by the financial
analysis is given traditionally, by general accounting, which led to the misnomer of
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accounting analysis..However, recent evolution led to considerable expansion of

information sources handling by the financial analysis, which is profoundly renewed
1.2 INDUSTRY PROFILE
A BRIEF HISTORY OF INSURANCE SECTOR
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The business of life insurance in India in its existing form started in India in
the year 1818 which the establishment of the Oriental Life Insurance Company in
Calcutta. Some of the important milestones in the life insurance business in India are:
1. 1912:- The India life Assurance Companies Act enacted as the first status to
regular the life insurance business.
2. 1928:- The Indian Insurance Company's Act enacted to enable the
Government to collect statistical information about both life and non-life
Insurance businesses.
3. 1938:- Earlier legislation consolidated and amended to by the insurance Act
with the objective of protecting the interests of the insuring public.
4. 1956:- 245 Indian and Foreign Insurance and provided societies taken over by
the control Government and nationalized. ICICI formed by an Act of
parliament, viz ICICI Act 1956, with capital contribution of Rs.5crore from
the Government of India.
GENERAL INSURANCE
The general insurance in India, on the other hand, traced its roots to the
TRITION INSURANCE COMPANY LTD., the first general insurance Company
established in the year 1850 in Calcutta by the British.
1907: The Indian mercantile insurance ltd., set up, the first Company transact all
classes of general insurance business.
1. 1957: General Insurance council, a wing of the insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business
practices.
2. 1968: The India Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
3. 1972: The General Insurance business (Nationalization) Act, 1972
nationalized the general insurance business in India with effect from 1st
January 1973.
PROMOTERS
ICICI Bank
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ICICI BANK Limited is India's second largest bank in the Country with council dated
total assets of over US $ 100 billion as of March 31, 2010. ICICI BANK presence
currently spans 19 Countries, including India.
PRUDENTIAL PUBLIC LIMITED COMPANY
Established in London in 1848, Prudential Public Limited Company is an

international retail financial services group with significant operations in Asia. The
US & UK serving around 25 million customers, policy holders and unit holders.
Worldwide the Company has 290 billion of assets under management and it is one of
the best capitalized insurers in the world with an Insurance Groups Directive (IGD)
capital surplus estimated at 3.4 billion (at Dec 31, 2009) prudential is a leading life
insurer in Asia
Almost 4500 years ago, in the ancient land of Babylonia, traders used to bear risk of
the caravan trade by giving loans that had to be later repaid with interest when the
goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the
practice. That, perhaps, was how insurance made its beginning.
Life insurance had its origins in ancient Rome, where citizens formed burial clubs that
would meet the funeral expenses of its members as well as help survivors by making
some payments.
As European civilization progressed, its social institutions and welfare practices also
get more and more refined. With the discovery of new lands, sea routes and the
consequent growth in trade, medieval guilds took it upon themselves to protect their
member traders from loss on account o fire shipwrecks and the like.
Since most of the trade took place by sea, there was also the fear of pirates. So these
guilds even offered ransom for members held captive by pirates. Burial expenses and
support in times of sickness and poverty were other services offered. Essentially all
these revolved around the concept of insurance or risk coverage. Thats how old these
concepts are really.
In 1347, in Genoa, European maritime nations entered into the earliest known
insurance contract and decided to accept marine insurance as a practice.
LIFE INSURANCE IN INDIA
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Although insurance in its present form has been brought to India by the British and
other colonial powers the concept of collective co-operation to share a particular risk
is as old as the dawn of human civilization.
India was a major trading Power in ancient times and some examples of sharing risks
can be found such as ships carried cargo of several traders together instead of a single
individual. In the Mogul army a life annuity was granted to the family on the demise
of a soldier against some regular contribution in his life time .The Joint family system
of India is also an embodiment of the same concept.
EARLY ATTEMPTS
Life insurance in its modern form came to India from England in 1818 with the
formation of the Oriental Life Insurance Company in Kolkata and with the passage of
time Indians were also covered by this company. By 1868 there were 285 companies
operating in India and were primarily into insuring the European lives, those Indians
who were offered were changed an extra premium of 15 to 20% and treated as
substandard lives.
FIRST INDIAN COMPANY
The first insurance company under the title the Bombay life insurance society
started its operations in 1870 and started insuring lives of Indians at standard rates.
Later oriental Govt. life insurance co. was established in 1874, which emerged as
the leading insurance company in India
PRE INDEPENDENCE HISTORY
With the various freedom movements various leaders encouraged domestic life
insurance companies to enter the fray In 1914 there were only 44 companies and in
1940 this number grew to 195.From here on the growth of life insurance was quiet
steady except in 1947-48 during the partition of India.
NATIONALIZATION OF INSURANCE BUSINESS 1956
After Independence our nation was moving towards a Socialistic pattern of society
and with the main aim of spreading the concept to rural areas and to channel the
money into nation building activities the government of India Nationalized the life
insurance business and formed The Life Insurance Corporation of India started
functioning from 1.9.1956 and is today the largest insurer in the country with one
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central office, seven zonal offices and over 2048 branch offices with a Workforce of
125000 employees and over 800000 life insurance agents.
EVALUATE YOUR LIFE INSURANCE NEEDS
Life Insurance is one of the most popular savings/ investment vehicles in India
Ironically; its probably the least understood too. An insurance policy offers much
more than just tax planning and investment returns. It offers the ability to plan for
unforeseen events that could affect familys financial adversely.
FACTORS TO CONSIDER
Financial profile and needs are different from person to person, and the same is true
for insurance needs.
However, irrespective of the differences, the number of dependents PH has and their
financial needs are the most important factors to consider.
ISSUES TO CONSIDER WHILE EVALUATING THE ABOVE FACTORS

INCLUDE
The wealth, income and expense levels of PH dependents,
Their significant foreseeable expenses,
The inheritance PH would leave on them, and
NEED FOR INSURANCE
Obviously the above factors mean nothing to the insurance planning process
unless they are quantified. Globally, the time-tested approach used by insurance
and financial is the capital needs analysis method.
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1.3 COMPANY PROFILE
ICICI Prudential Life Insurance company is a joint venture between ICICI bank,
which is one of India's foremost financial services companies, and prudential public
limited company, which is a leading international financial services group
headquartered in the United Kingdom. ICICI Prudential began the operations in DEC
2000.Today; this company has over 2100 branches, which include 1116 micro offices,
over 2, 90,000 advices and 18 bank assurance partners.
ICICI Prudential has been voted as India's Most Trusted private life insurance
company has various insurance plans that have been designed for different
individuals, as every individual has different insurance needs.
The company has 21 million customers worldwide. It was founded by the Egg
Internet bank, which it sold to Citigroup in 2007. It is listed on the London Stock
Exchange and is a constituent of the FTSE 100 index.
ICICI Prudential Life Insurance Company was founded on 30 May 1848 in

Hatton Garden in London as the Prudential Mutual Assurance Investment and loan
Association providing loans to professional and working people.
The company was first listed on the London Stock Exchange in 1924. In 1997
the company acquired Scottish Amicable, a business originally founded in 1826 in
Glasgow as the west of Scotland life insurance Company, for $ 1.75bn. In 1998
prudential set up Egg, an internet bank with in the UK. The subsidiary unit reached
550,000 customers within nine months but had difficulty achieving profitability. In
June 2000 the company was first listed on the New York Stock Exchange to help
focus on the US market.
In 1854 the company began selling the relatively new concept of industrial
branch insurance policies to the working class population for premiums as low as one
penny through agents as door to door salesmen.
The army of premium collection agents was for many years identified with the
prudential as the Man from the Pru.
It moved to its traditional home at Holborn Bars in 1879 and converted to a limited
company in 1881.
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The building was designed by Alfred Water house, and is built of terracotta
manufactured by Gibbs and Canning Limited of Tamworth two of the same driving
forces behind the Natural History Museum in London.
In October 2004 prudential outsourced its back office functions to Capita: about
3,000 jobs were transferred. The significant outsourcing deal worth an estimated 40
million for an initial three year period built on Prudentials existing relationship with
Capita who took over its Belfast operation in 2006 along with approximately 450
employees in a smaller operational restructure.
On 7 April 2009, it announced that prudential was in talks with Manchester

United regarding becoming the English football giants shirt sponsor in 2010.
However, on 3 June 2009, Manchester United announced that it had signed a four
year shirt sponsorship deal with American insurance GIANT, Aon Corporation. The
deal is said to be worth 80 million over four years, replacing Uniteds deal with
American International Group (AIG) as the most Lucrative shirt deal in history. In
2010, Aon will replace troubled American insurance company AIG, which is
restructuring itself having received a $150 billion bail-out from the United States of
Government.
On 1 March 2010, prudential announced that it was in advanced talks to

purchase the pan-Asian life insurance company of AIG, American International
Assurance (AIA) for approximately $35.5 billion.
OPERATIONS
The company has four business units:
1. Prudential United Kingdom: The business offers pensions, annuities,

savings and investments. They are particularly well-known for the sale of
with-profit bonds and pensions, corporate pension schemes, bulk annuities and
individual annuities. The company left the general insurance market in 2002,
licensing Churchill Insurance to use the prudential name.
2. M&G: The business offers investment management services including retail
fund management, institutional fixed income, pooled life, pension funds,
property and private finance. Part of M&G, prudential property investment
Managers specializes in the management of Prudentials property assets.
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3. Prudential Corporation Asia: The business is the largest United Kingdom

life assuror in Asia. It has had a presence in the continent since 1923 when an
overseas agency for life assurance was created in India. Although this was
subsequently nationalized, prudential has recently relaunched in India as ICICI
prudential, a 26% joint venture with ICICI Bank. As CITIC prudential Life, a
50-50 joint venture, they were the first United Kingdom Company to re-
establish life business in China in 2000.
4. There are also have businesses in Hong Kong, Taiwan, Japan, South Korea,
Singapore, Malaysia, Philippines, Thailand, Vietnam and Indonesia.Jackson
National Life: the business was purchased in 1986. It was named after Andrew
Jackson, the seventh President of the United States of America and started
business in 1961 at Michigan.
LIFE INSURANCE PLANS
EDUCATION INSURANCE PLANS
Wealth Advantage
Life Stage Assure
Lifetime Gold
Life Link Super
Life Stage RP
PREMIUM GUARANTEE PLANS
ICICI Pru Suraksha
Executive ICICI Pru Suraksha Kavach
MICRO INSURANCE PLANS
ICICI Pru Sarv Jana Plan Smart Kid New Unit Linked
Regular Premium
Single premium
Smart Kid Regular Premium
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PROTECTION PLANS
Pure Protect
Life Guard
Save 'n' Protect
Cash Bank
Home Assure
RETIREMENT SOLUTIONS
Life Stage Pension
Life Time Super Pension
Life Link Super Pension
Forever Life Plan
Immediate Annuity
HEALTH COVERAGE PLANS
Health Saver
Medi Assure
Hospital Care
Crisis Cover
Cancer Care
Diabetes Care Active
Diabetes Assure
ICICI PRU GROUP SOLUTIONS ADVANTAGE
Group Super Annuation
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Group Gratuity Plan
Annuity Solutions
Group Term Insurance Plan
RURAL PLANS
ICICI Pru Suraksha
ICICI Pru Suraksha Kavach
BOARD OF DIRECTORS
Ms.Chanda D.Kochhar, Chair Person

Mr. N.S. Kannan, Director
Mr. K. Ram Kumar, Director
Mr. Rajiv Sabharwal, Director
Mr. Barvy Stowe, Director
Mr. Adrian O'Connor, Director
Mr. Keki Dadiseth, Independent Director
VISION
The ICICI Prudential the dominant life and pension player built on trust by
world class people and service.
CORE VALUES
Integrity
Customer first
Boundryless
Ownership
Passion
INTEGRITY
BE HONEST AND FAIR IN WHAT YOU SAY AND WHAT YOU DO
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Practice what you preach.
Stand up honesty and fearless by for what is right.
Think and Act for long term impact.
Do not compromise the future to pay for the present.
CUSTOMER FIRST
OWN THE CUSTOMER DELIVER THE PROMISE
Keep customer interest in the centre of all decisions.
Promise what you can, deliver it to finish.
BOUNDARY LESS
NEVER SAY ITS NOT MY JOB
Offer help and support across funds to ensure business success.
Seek and share ideas freely.
Recognize and value contributions from colleagues.
Nature and motivate team members to reach full potential.
OWNER SHIP
If it is to be, it is up Time
Take responsibility and see task through compensation.
Own mistake, learn from failure.
Pursue goal relentlessly, never give up.
Be a team player; take ownership for a term performance.
PASSION
Boundless Energy and Enthusiasm
Exhibit winning Instinct
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Demonstrate speed and urgency for achieving results.
Challenge status quo and do things differently.
ICICI PRUDENTIAL IN THE NEWS
ICICI Prudential life unveils unit linked products Businesses Line June 03,
2005.
ICICI Prudential Invest shield life Businesses Line May 08, 2005.
ICICI Prudential new businesses jump 77% to cross Rs.1K cr. The economic
times April 13, 2005.
ICICI Prudential now a bigger draw for agents than Mfs. The Economic
Times, April 08, 2005.
PRODUCTS
Insurance solutions for Individuals
Saving Pollution
Secure plus
Cash plus
Cash Back
Life Time & Life Time II
Life Time II
PROTECTION SOLUTION
Life Guard
CHILD PLAN
Smart Kid education plans
Smart Kid regular premium
Smart Kid unit linked regular premium
Smart Kid unit linked regular premium II
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Smart Kid unit linked single premium II
RETIREMENT SOLUTIONS
Golden years
Investment Shield pension
Life time pension II
Life link pension II
Secure plus pension
MARKET LINKED RETIREMENT PRODUCTS
Life time pension II
Life link pension II
Invest Shield pension
HEALTH SOLUTIONS
Health assure
Health assure plus
GROUP INSURANCE SOLUTIONS
ICICI PRUDENTIAL Group Gratuity plan
ICICI PRUDENTIAL Superannuation plan
ICICI PRUDENTIAL Term plan
INVESTMENT PLAN
Life link investment
SWOT ANALYSIS
STRENGTHS
ICICI PRUDENTIAL is the 1st life insurance Company to introduce UNIT

Linked, PENSION PRODUCTS AND LIFE TIME it can get the pioneer
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advantage.
Prudential is the 156 year old Company founded in 1848. So it has full
fledged experience these industries.
ICICI enjoys a rating with the Moodys which is higher than the severing
rating.
Large distribution channel with 30 branches and more than 30,000 financial
advisors.
ICICI PRUDENTIAL has the best incentives which motivate and encourage
the advisors to work and fulfil the commitment.
The financial condition of both Companies is very sound.
Good customer has service.
Company has created a brand name.
WEAKNESS
It has to do operation within the boundary of IRDA.

Up till one no more option of product for middle class offered by ICICI
PRUDENTIAL.
No option in rural area.
Yet to build a strong distribution network in the market.
OPPORTUNITY
Today ICICI PRUDENTIAL covers 40% market so yet there is a great

potentiality to increase market share.
Insurance plan like pension plan, children plan and investment plan of ICICI
PRUDENTIAL good response from the market. So in future Company can
take benefit for it.
The brand names that create ICICI PRUDENTIAL and awareness level of it is
comparatively quite higher than competition. So it will be helpful in the future
while.
THREATS
It is Private Company so there is about solvency and liquidity among the
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general people.
Change in the environmental factors many affects the Company.
The Government policies and the annual budget may the insurance market.
Large distribution network of LIC and trust of people in LIC.
PRODUCT PROFILE
UNIT LINKED
UNIT LINKED PENSION TRADITIONAL TERMPLANS

Regular Premium Annuity Endowment New Risk Care
Single Premium Retirement Money Back
New Unit Gain plus SP Future Income CashGain
New Unit Gain Premier SPS warna Vishranti
WOMEN INSURANCE HEALTH CHILDREN PLAN JUST

LAUNCHED
Working Women Health Care Child Gain Group Suraksha
House Wives Care First
TRADITIONAL
Saving Plans, which offer bonuses, are excellent long term saving instruments with
complete safety. Our products offer additional benefits which include 4 times life
cover at little extra costs, limited premium payment terms and compounded
reversionary bonuses making it a very good long term investment.
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Endowment
Invest Gain
Save Care Economy SP
Life Time Care
Super Saver
Money Back
Cash Gain
WOMEN INSURANCE
Todays lady is an inspiration to her family. She takes important decisions in every
household and at work. To cater to women's special needs we offer innovative women
specific plans which provide investment benefits, savings, retirement solutions and
medical insurance? Our special plans help mothers plan for their childrens education
saves for the future and take care of all medical emergencies in the family.
OUR REGULAR INVESTMENT AND SAVINGS PLAN

Investments along with critical illness benefits which provide good
returns, long term saving and protection in case of a medical
emergency
Investment plans with accidental coverage
Childrens education planning
Specialized retirement income plans for homemakers to provide a
secure and financial future.
COMPETITORS
1 MNYL Life Insurance
2 Sahara Life Insurance
3 Tata AIG Life
4 HDFC Standard Life
5 Birla Sun life
6 SBI Life Insurance
7 Kotak Mahindra Old Mutual Life Insurance
8 Aviva Life Insurance
9 Reliance Life Insurance Company Limited
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10 MetLife India Life Insurance

11 ING Vysya Life Insurance
12 Max Newyork Life Insurance
13 Shriram Life Insurance
14 Bharti AXA Life Insurance Co Ltd
15 Future Generali Life Insurance Co Ltd
16 IDBI Fortis Life Insurance Co Ltd
OBJECTIVES OF THE INSURANCE
Many people buy insurance, but usually because they have to. This is
especially true with car insurance since 49 of the 50 state require car insurance
to operate a motor vehicle on the road.
The same can said of other types of insurance in that many people buy health
and life insurance without a real understanding of why they do so.
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2. RESEARCH METHODOLOGY
Research is common parlance refers to a search to a search for knowledge. It can be

defined as a scientific and systematic search for pertinent information on a specific
topic. Research is a systematized effort to gain new knowledge. The essential steps
involved in research process comprise defining the problems, formulating hypothesis,
collecting, organizing and evaluating data; making suggestions and research
conclusions, and finally testing the conclusions carefully to determine whether they fit
the formulating hypothesis.
2.1 NEED FOR THE STUDY
Main purpose of this study is to analyze the past and present financial performance.
Financial statements are mainly prepared for decision making purposes and it
determines financial strengths and weakness of the firm. As well as financial
statements analysis is to help the management to make a comparative study of the
profitability of various firms engaged in similar business.
2.2 OBJECTIVE OF THE STUDY
The objective of the study is to obtain a true in sight in to financial position of

ICICI PRUDENTIAL LIFE INSURANCE, HYDARABAD.
2.3 SCOPE OF STUDY
The Ratio Analysis is a tool which helps to study the changes that take place
over a given period of time.
The total project study depends upon the company financial reports, the
reports collecting from the company directly. The period of the study is five years
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2012-16.
2.4 RESEARCH DESIGN
Based on the objectives of the study, exploratory research has been adopted.
Exploratory is one which largely interprets the already available information. It makes
use of secondary data and lays emphasis on analysis and interpretation of the existing
and available information.
2.5 SOURCES OF DATA
2.5.1 SECONDARY DATA
The data relating to financial statements of ICICI PRUDENTIAL LIFE

INSURANCE, HYDARABAD has been collected from published Annual Reports for
the years 2012-2016 which were obtained from the Administrative office of the
company
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3. TOOLS OF ANALYSIS
The analysis and interpretation of financial statements is used to determine the

financial position and results of operations as well. A number of methods or devices
are used to study the relationship between different statements. An effort is made to
use those devices which clearly analyze the position of the enterprise.
The following methods of analysis are generally used:
RATIO ANALYSIS
Accounting ratios are relationships, expressed in arithmetical terms, between

figures which have a cause and effect relationships or which are connected with each
other in some other manner.
Accounting ratios are a very useful tool for grasping the true message of the
financial statements and understanding them. Ratio analysis is defined as the
systematic use of ratios tom interprets the financial statements so that the strengths
and weakness of an organization as well as its historical performance and current
financial condition can be found and analyzed.
Interpretations of ratios form a core part of ratio analysis. The usefulness of

ratios depended on the judicious interpretations.
USES OF RATIO ANALYSIS
Ratio is an important tool in financial analysis. Ratios are a comparative study

of the relations between items of financial statements, which will reveal the
profitability, solvency, as well as the overall financial position of a business
enterprise.
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THE USES OF RATIO ANALYSIS MAY SUMMARIZE AS FOLLOWS
Ratio analysis helps to analyze and understand the financial health and trend
of a business.
Past performance and further projections could be easily reviewed with ratio
analysis.
Interfirm and Intrafirm comparison becomes possible with ratio

analysis.
It is useful to the management in exercising control in various areas like

budgetary control, financial control.
CLASSIFICATION OF RATIOS
The ratios may be classified as under:
According to the statements from which they are calculated such as balance
sheet ratios, operating ratios and combined ratios.
According to the functional classification they are profitability ratios, turnover

ratios, solvency ratio and market test ratio
According to their importance they are primary ratios and secondary ratios.
CURRENT RATIO
This ratio is the measure of general liquidity and is almost widely used to
make the analysis of a shorter financial position or liquidity of a firm. The
higher ratio indicates that the firm is liquid and has the ability to pay its
current obligations.
Current assets
Current Ratio =
C urrent liabilities
RETURN ON ASSETS RATIO
ANMK Page 26
An indicator of how profitable a company is relative to its total assets. ROA gives an
idea as to how efficient management is at using its assets to generate earnings.
Calculated by dividing a company's annual earnings by its total assets, ROA is
displayed as a percentage.
NET INCOME BEFORE TAXES

RETURN ON ASSETS RATIO=
TOTAL ASSETS
SOLVENCY RATIO
A key metric used to measure an enterprises ability to meet its debt and other
obligations. The solvency ratio indicates whether a companys cash flow is sufficient
to meet its short-term and long-term liabilities. The lower a company's solvency ratio,
the greater the probability that it will default on its debt obligations.
AVAILABLE SOLVENCY MARGIN

SOLVENCY RATIO =
REQUIRED SOLVENCY MARGIN
LEVERAGE RATIO
In the traditional sense, the employment of funds for which a firm pays a fixed cost or
return. When revenues associated with the employment of these funds exceed the
fixed cost or returns, the firm is positively leveraged. Leverage as used in the
insurance and reinsurance industries has a similar meaning. However, due to the
unique nature of the insurance transaction, insurance and reinsurance companies are
able to take advantage of extreme leverage positions. For example, an insurer's capital
and surplus are usually only a fraction of the total amount of insurance limits that it
can comfortably sell to insured.
LEVARAGE RATIO=CAPITAL+ SURPLUS
ANMK Page 27
ANALYSIS AND INTERPRETATION
CURRENT RATIO
Current assets
Current Ratio =
Current liabilities
PRIVATE LIFE INSURANCE

COMPANY 2012 2013 2014 2015 2016
AVIVA 0.73 1 0.64 0.6 0.7
BAJAJ ALLINZ 0.63 0.47 0.77 0.81 0.89
BHARTIAXA 0.84 0.84 1.04 0.79 0.93
BIRLA SUN LIFE 0.81 0.81 0.85 0.86 0.90
FUTURE GENARAL 0.78 1.06 1.21 1.39 1.43
HDFC STANDARD 1.06 0.62 0.8 0.85 1.07
ICICI PRUDENTIAL 0.57 0.37 0.41 0.53 0.67
IDBI FEDARAL 1.02 1 1.02 1.25 1.04
ING VSYA 0.97 0.83 0.97 1.8 1.17
KOTAK MAHINDRA 0.9 0.69 0.8 0.66 0.89
MAX LIFE 0.82 0.69 0.62 0.62 0.68
MET LIFE 0.72 0.53 0.62 0.77 0.88
RELIANCE 0.84 0.85 0.79 0.74 0.69
SAHARA 2.04 1.69 1.81 1.87 1.54
SBI LIFE 0.39 0.55 0.77 2.41 1.92
SRI RAM 0.93 0.66 1.05 1.44 1.23
TATA AIA 0.77 0.61 0.66 0.7 0.9
GROWTH RATE(%) 83.1
PUBLIC LIFE INSURANCE LIC 2.48 2.25 3.72 3.08 2.82
GROWTH RATE 78.6
ANMK Page 28
INTERPRETAION:
The table 1 depicts that the ratio is fluctuating over the period of time. Among all life
insurers, LIC gives the evidence of sound liquidity positions far as private players are
concerned companies like future general, IDBI,SHARA,SHRI RAM and SBI life
have sound liquidity position. the growth rate of private insurers is 83.1% and of LIC
is 78.6% in case of current ratio.
RETURN ON ASSETS RATIO

TOTAL ASSETS

COMPANY 2012 2013 2014 2015 2016
AVIVA -1.84 -0.99 1.2 2.24 1.6
BAJAJ ALLINZ -1.00 0.78 1.09 1.12 1.34
BHARTIAXA -2043 -3.01 -2.3 -1.34 -2.46
BIRLA SUN LIFE -0.99 -0.57 0.39 0.50 0.69
FUTURE GENARAL -1.79 -2.86 -2.64 -0.79 -1.26
HDFC STANDARD -0.45 -0.30 -0.07 0.17 0.68
ICICI PRUDENTIAL -0.83 0.03 0.96 1.24 1.63
IDBI FEDARAL -0.82 -0.49 -0.57 -0.23 -0.59
ING VSYA -0.58 -0.54 -0.26 -0.10 -0.61
KOTAK MAHINDRA 0.05 0.27 0.27 0.63 0.94
MAX LIFE -0.49 -0.02 0.23 0.48 -0.56
MET LIFE 0.03 0.07 0.08 0.07 0.9
RELIANCE -1.73 -0.4 -0.26 0.74 0.93
SAHARA -0.40 0.72 0.44 0.30 0.56
SBI LIFE -0.05 0.26 0.22 0.16 0.33
SRI RAM 0.11 0.19 0.13 0.26 0.49
TATA AIA -1.01 -0.88 0.11 0.59 0.92
GROWTH RATE(%) 78.6
GROWTH RATE 0.00
INTERPRETAION:
The table showed that ROA measure of Bajaj Allianz and ICICI prudential sounds
good. the companies like BAARTHI AXA,HDFC,ING VYSYA,RELIANCE,MAX
LIFE,TATA AIA shows ROA ratio in respective years. The return on assets ratio is
stable and presents a healthy picture of insurer, the private insurer showed growth rate
ANMK Page 29
of 78.6%in 5 years and public insurer showed negligible growth rate of in their
profitability.
SOLVENCY RATIO
SOLVENCY RATIO =

COMPANY 2012 2013 2014 2015 2016
AVIVA 5.91 5.12 5.40 5.15 5.14
BAJAJ ALLINZ 2.62 2.68 3.66 5.15 4.61
BHARTIAXA 2.07 1.68 2.14 2.34 1.94
BIRLA SUN LIFE 2.44 2.11 2.89 2.99 2.56
FUTURE GENARAL 3.17 2.34 2.21 3.86 3.61
HDFC STANDARD 2.58 1.80 1.72 1.88 1.65
IDBI FEDARAL 6.11 4.05 6.60 6.61 6.15
ING VSYA 2.26 1.79 3.00 2.16 2.64
KOTAK MAHINDRA 2.69 2.79 2.67 3.06 3.92
MAX LIFE 3.04 3.22 3.65 5.34 5.34
MET LIFE 2.27 1.65 1.69 1.65 1.95
RELIANCE 2.5 1.86 1.66 3.53 2.53
SAHARA 3.6 4.50 4.82 5.28 5.37
SBI LIFE 2.92 2.17 2.04 5.34 3.25
SRI RAM 3.05 2.69 3.96 4.99 4.16
TATA AIA 2.51 2.11 2.16 2.84 2.17
GROWTH RATE(%) 97.2
2.8
PUBLIC LIFE INSURANCE LIC 2.51 2.11 2.16 4 2.61
GROWTH RATE 70.7
INTERPRETATION:
The private insurers showed growth rate of 97.2%in five years and public insurers
showed growth rate of 70.7% in their solvency position. Examining individual,
private life insurers like AVIVA, BAJAJ ALLINZ, IDBI, MAX LIFE, SAHARA and
SBI life insurance have good solvency position.
ANMK Page 30
LEVERAGE RATIO:

COMPANY 2012 2013 2014 2015 2016
AVIVA 0.61 1.36 0.44 0.04 0.06
BAJAJ ALLINZ 0.60 1.01 0.36 0.50 0.54
BHARTIAXA 0.20 0.47 0.33 0.16 0.96
BIRLA SUN LIFE 1.06 2.78 1.29 0.44 2.46
FUTURE GENARAL 0.25 0.53 0.52 0.35 0.65
HDFC STANDARD 0.72 4.70 2.88 2.40 2.19
IDBI FEDARAL 0.65 1.36 1.07 0.63 0.64
ING VSYA 0.63 1.92 0.66 0.30 0.94
KOTAK MAHINDRA 0.31 0.38 0.41 0.46 0.43
MAX LIFE 0.98 3.19 1.56 1.12 1.26
MET LIFE 0.69 1.68 0.98 0.47 0.69
RELIANCE 0.85 2.45 1.32 0.10 1.29
SAHARA 0.18 0.26 0.18 0.21 0.62
SBI LIFE 4.02 8.65 6.83 3.26 5.64
SRI RAM 0.09 0.31 0.44 0.30 0.68
TATA AIA 0.41 0.33 0.34 0.40 0.46
GROWTH RATE(%) 85.7
GROWTH RATE 41.2
INTERPRETAION:
Among all life insurers leverage position of LIC is far better than that of private
players. Viewing private players, ratio is chainable over the period of time but
leverage position of HDFC standards, MAX life and SBI life sounds good. the private
life insurers show growth rate of 85.7%and public life insurers demonstrates 41.2%
growth rate in 5 years.
ANMK Page 31
3.1 CURRENT RATIO
Current assets
Current Ratio =
Current liabilities
TABLE: 3.1 Calculation of Current Ratio

YEARS CURRENT RATIO
2011-12 0.88
2012-13 4.78
2013-14 2.12
2014-15 0.34
2015-16 1.56
Source: Annual Reports are collected from ICICI LIFE INSURANCE
GRAPH: 3. 1 Calculation of Current Ratio
CURRENT RATIO
5
4.5
4
3.5
3 CURRENT RATIO
2.5 4.78
2
1.5
2.12
1 1.56
0.5 0.88
0.34
0
2011-12 2012-13 2013-14 2014-15 2015-16
YEAR
INTERPRETATION:
From the above table it is seen that CURRENT RATIO is started to decline from
2014 to 2015. With the value of 0.34.The CURRENT RATIO recorded as highest in
the years of 2012, 2013.
3.2 RETURN ON ASSETS RATIO

ANMK Page 32

TOTAL ASSETS
TABLE: 3.2 Calculation of Return on Assets Ratio

YEARS RETURN ON ASSET RATIO
2011-12 -0.83
2012-13 0.03
2013-14 0.96
2014-15 1.24
2015-16 1.63
GRAPH: 3. 2 Calculation of Return on Assets Ratio
RETURN ON ASSET RATIO

2
1.5
1 RETURN ON ASSET
1.63 RATIO
1.24
0.5 0.96
0.03
0
-0.83
-0.5
-1 YEAR
INTERPRETATION:
From the above table it is observed that cash ratio was gradually decreased during
the study period from 2012 to 2013 and thereafter it was increased to 1.63 in the
year 2016. Return on Assets Ratio recorded as highest in the year 2013. (i.e.1.63)
and it was recorded as lowest in the year 2011 and 2012 (i.e.-0.83).
ANMK Page 33
3. SOLVENCY RATIO

SOLVENCY RATIO =
TABLE: 3.3 Calculation of Solvency ratio
years Solvency ratio

2011-12 2.31
2012-13 2.9
2013-14 3.27
2014-15 3.71
2015-16 3.95
GRAPH: 3. 3 Calculation of Solvency ratio
Solvency ratio
4
3.5
3
2.5 Solvency ratio
3.71 3.95
2
3.27
1.5 2.9
2.31
1
0.5
0
2011-12 2012-13 2013-14
YEAR 2014-15 2015-16
INTERPRETATION:
ANMK Page 34
From the above table, it is observed that quick ratio was gradually decreased during
the study period from 2012-2013 there after it was increased to 3.9 in the year 2016.
The Solvency ratio recorded as highest in the year of 2016.
4. LEVARAGE RATIO
TABLE: 3.3 Calculation of Leverage Ratio
years Leverage Ratio

2011-12 0.88
2012-13 4.78
2013-14 2.12
2014-15 0.34
2015-16 1.56
GRAPH: 3. 3 Calculation of Leverage Ratio
Leverage Ratio
5
4.5
4
3.5
3 Leverage Ratio
2.5 4.78
2
1.5
2.12
1 1.56
0.5 0.88
0.34
0
YEAR
2011-12 2012-13 2013-14 2014-15 2015-16
INTERPRETATION:
ANMK Page 35
From the above table, it is observed that Leverage Ratio was gradually decreased
during the study period from 2012-2013 there before it was increased to 4.78 in the
year 2013. The Leverage Ratio recorded as highest in the year 2013 (i.e. 4.78) and it
was recorded lowest in the year 2015 (i.e. 0.34).
FINDINGS:-
CURRENT RATIO is started to decline from 2014 to 2015. With the value of
0.34.The CURRENT RATIO recorded as highest in the years of 2012, 2013.
Return on Assets Ratio recorded as highest in the year 2013. (i.e.1.63) and it
was recorded as lowest in the year 2011 and 2012 (i.e.-0.83).
Quick ratio was gradually decreased during the study period from 2012-2013
there after it was increased to 3.9 in the year 2016. The Solvency ratio
recorded as highest in the year of 2016.
Leverage Ratio was gradually decreased during the study period from 2012-
2013 there before it was increased to 4.78 in the year 2013. The Leverage
Ratio recorded as highest in the year 2013 (i.e. 4.78) and it was recorded
lowest in the year 2015 (i.e. 0.34).
ANMK Page 36
SUGGESTIONS
ICICI Prudential Life Insurance should create awareness about health

schemes to the customers to increase their profitability.
The company should maintain continuous relationship with the policy holders
for the betterment of future policy and performance of the company.
Provide update statements regarding policies to policy holders for making

regularly without any delay.
ICICI life Insurances Company affective of customer care
Some other introducing new insurance policies.
Customer in life insurances companies giving more information
Attracting to the competitors customers.
ICICI Company yours competitors are LIC Company.
ANMK Page 37
CONCLUSION
1. Customer preferences which play a major role in the life insurance industry in
this ICICI life insurance Company it attracts the people in effective manner
compare remaining companies. But LIC is the one which dominates all
companies because it is a public sector company.
2. My conclusion is now a days insurance companies to provide the more
schemes because to overcome the competitors and to earn the more money.
Present ICICI Company provides the more schemes. Thats why ICICI
occupies Indias first rank in the private insurance companies and banking
sector also. But the company to maintain the some policies because ICICI
prudential life insurance company should create awareness about health
schemes to the customers to increase their customers and profits also, and the
company should maintain continuous relationship with the policy holders
share holders also because too easy collecting the funds and for the betterment
of future policy and performance of the company to improve their services in
villages also.
ANMK Page 38
BIBLIOGRAPHY
M.Y.khan & p. k. jain (2007) financial management: Text, problems& cases,

4/e, Tata Mcgraw-Hill publications: New delhi.
2.I.M. pandey (2004), financial management, 9/e, Vikas publications, New
Delhi
Prasanna Chandra (2003), financial management, 5/e, Tata Mcgraw-Hill
publication: New Delhi.
Balla, V.K. (2006), Financial management and policy: Text and cases, 5/e,
Anmol publications: New Delhi.
www.money control.com
ANMK Page 39

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FINANCIAL PERFORMANCE ICICI LIFE INSURANCE

Financial Performance, as used in corporate business house refers to a set of reports

Financial analysis is to be determined the significant operation and financial

Financial Analysis is an attempt to determine the significance and meaning of

But these statements howsoever, correctly and objectively prepared, by themselves

Financial analysis result in the presentation of information by arranging financial

MEANING OF FINANCIAL PERFORMANCE

Financial analysis refers to an assessment of the viability, stability and profitability of

DEFINITION OF FINANCIAL PERFORMANCE

In addition, one key area of financial analysis involves extrapolating the

Financial performance is concerned with the problems that a raise in attempting to

Purpose of financial performance:

The purposes of analyzing financial performance are as outlined below.

To inform owners about the financial position of the organization.

How are the firms mobilizing resources?

In short analysis facilities decision making of every business concern analysis of of

Financial performance analysis is a process of evaluating the relationship between

The purpose of financial is to diagnose the information contained in financial

Financial performance refers to the act of performing financial activity. In broader

It is the process of measuring the results of a firms policies and operations in

1 .What is the financial position of the firm at a given point of time?

2. How is the financial performance of the firm over a given time?

These questions will be answered with the help of financial analysis of a

It is purpose is to convey an understanding of some financial aspects of a

Shows total assets=total liabilities to wheres equity.

Income statement is a summary of s firms revenues and expenses over a specified

Financial performance analysis includes analysis and interpretation of

The analysis of financial statements is a process of evaluating the relationship

Financial analysis is a specialty of finances aimed at formulating a diagnosis and

accounting analysis..However, recent evolution led to considerable expansion of

1.2 INDUSTRY PROFILE

A BRIEF HISTORY OF INSURANCE SECTOR

1. 1957: General Insurance council, a wing of the insurance Association of India,

PRUDENTIAL PUBLIC LIMITED COMPANY

Established in London in 1848, Prudential Public Limited Company is an

LIFE INSURANCE IN INDIA

FIRST INDIAN COMPANY

PRE INDEPENDENCE HISTORY

NATIONALIZATION OF INSURANCE BUSINESS 1956

EVALUATE YOUR LIFE INSURANCE NEEDS

ISSUES TO CONSIDER WHILE EVALUATING THE ABOVE FACTORS

The wealth, income and expense levels of PH dependents,

Their significant foreseeable expenses,

The inheritance PH would leave on them, and

NEED FOR INSURANCE

1.3 COMPANY PROFILE

ICICI Prudential Life Insurance Company was founded on 30 May 1848 in

On 7 April 2009, it announced that prudential was in talks with Manchester

On 1 March 2010, prudential announced that it was in advanced talks to

The company has four business units:

1. Prudential United Kingdom: The business offers pensions, annuities,

3. Prudential Corporation Asia: The business is the largest United Kingdom

LIFE INSURANCE PLANS

EDUCATION INSURANCE PLANS

Life Stage Assure

Life Link Super

PREMIUM GUARANTEE PLANS

ICICI Pru Suraksha