NAME OF STUDENT:

SOMESHWARI SAWANT
ROLLNO:104
TITLE: FINANCIAL ANALYSIS OF
INSURANCE COMPANIES IN
INDIA
PROGRAMME: PGDM
 Summer Internship Project

Financial Analysis of Insurance Companies In India.

A Project with Vikalp Education

Submitted in partial fulfillment of the requirements for

Post Graduate Diploma in Management (PGDM)
Academic Year: 2021

Submitted By
Someshwari Sawant
Division F2 Roll No. 104
PGDM
Batch: 2020-22
Chetana’s Institute of Management and Research, Bandra (E),
Mumbai 400 051
 Declaration

I hereby declare that this report submitted in partial fulfillment of the requirement of the award for the
Post Graduate Diploma in Management to Chetana’s Institute of Management and Research, is my
original work and not submitted for award of any degree or diploma fellowship or for similar titles or
prizes.

I further certify that I have no objection and grant the rights to Chetana’s Institute of
Management and Research to publish any chapter/ project if they deem fit in Journals/Magazines
and newspapers etc. without my permission.

Place : Mumbai
Date : 10st August 2021
Name : Someshwari Sudhakar Sawant
Division : PGDM
Roll No. : 104
Signature :
 Table of Contents
EXECUTIVE SUMMARY ............................................................................................................ 0
CHAPTER 1: INTRODUCTION ................................................................................................... 3
1.2 SECTOR DETAILS.................................................................Error! Bookmark not defined.
CHAPTER 2: PROJECT OBJECTIVES ...................................................................................... 12
2.1 Review of Literature. .............................................................................................................. 12
2.2 Methodology ........................................................................................................................... 13
2.3 Industry Overview .................................................................................................................. 14
2.4 Regulations ............................................................................................................................. 16
CHAPTER 3:COMPANY OVERVIEW .......................................Error! Bookmark not defined.
CHAPTER 4: ANALYSIS & FINDINGS .................................................................................... 25
CHAPTER 5: LIMITATIONS: .................................................................................................... 32
BIBLIOGRAPHY ......................................................................................................................... 33
 EXECUTIVE SUMMARY
SIP (Summer Internship Project) is an opportunity to explore your skills and use your knowledge
to the best of your abilities.
PGDM course at CIMR requires students to undergo a Summer Internship Project with an
organization followed by a report endorsed by the faculty member. I took this opportunity to do
my internship at Vikalp Education under the guidance of industry mentor, Mr. Rishi Chourasia
(Founder & Director at Vikalp Education) and with the support of our internal mentor and faculty
guide Dr. Nalini Krishnan.(Program Chair,PGDM)
The internship at Vikalp Education for a period of 2 months from 27th May 2020 to 26th July
2020 was a holistic experience. Vikalp is an educational firm located at Nagpur in Maharashtra
State, India.
This was a Work-from-Home opportunity wherein I got to explore how a startup consulting firm
function. The key takeaways from this Internship were:
• Building good Communication skills.
• Being proactive and Time management.
• Significance of attention to detail.
• The scope and challenges of Entrepreneurship.
The project of SIP is based on the financial analysis of insurance companies in India for the year
2020 and 2021.
The Companies that are analyzed ahead in the report are HDFC LIFE and ICICI Prudential LIFE.
The reason for this complex topic to be undertaken was that Analysis and valuation of a
manufacturing or services sector is substantially simple however there are yet less reports and

study on the Analysis of Financial Institution.

• Thus, to hone my Analysis skills.
• To apply the Theoretical concepts of Sem 1 and Sem 2.
• To learn and familiarize myself with a real time Financial statements.
This project is Undertaken by me.
 CHAPTER 1.1 INTRODUCTION

Vikalp Education is young and growing EdTech platform serving a plethora of content, resources
and guidance to students aspiring for Law, Management and most Other competitive
examinations across India.
It was Founded in 2012, Their core objective is to make students "CORPORATE READY" and
so far, it has successfully done so by training, mentoring several hundreds of students by guiding
them to choose the right career path. They offer multi-disciplinary coaching for all the major
entrance and recruitment exams.
They undertake Coaching through unconventional methods which in turn encourages the student
to learn better.

Coaching offered by Vikalp Education:

1. 10+2 (For Vikalp Acadamy)

2. After 12th the courses are as followed:

i. Law Entrance – CLAT, AILET, LAWCET, LSAT
ii. Management Entrance – IPMAT, BBA (Symbiosis, NPAT, Christ)
iii. Hotel Management – IIHM, NCHMCT, IHM

3. Management Entrance exams such as:

i. CAT
ii. XAT
iii. SNAP
iv. NMAT
v. MAT
vi. CMAT
vii. MHCET

4. Competitive Exams such as:

1
 i. CRT
ii. Government Exams

5. In-house Training
i. Aptitude Training
ii. Workshop
iii. Tech. Training

2
 CHAPTER 1.1 INTRODUCTION

Vikalp Education is young and growing EdTech platform serving a plethora of content, resources
and guidance to students aspiring for Law, Management and most Other competitive
examinations across India.
It was Founded in 2012, Their core objective is to make students "CORPORATE READY" and
so far, it has successfully done so by training, mentoring several hundreds of students by guiding
them to choose the right career path. They offer multi-disciplinary coaching for all the major
entrance and recruitment exams.
They undertake Coaching through unconventional methods which in turn encourages the student
to learn better.

Coaching offered by Vikalp Education:

2. 10+2 (For Vikalp Acadamy)

2. After 12th the courses are as followed:

i. Law Entrance – CLAT, AILET, LAWCET, LSAT
ii. Management Entrance – IPMAT, BBA (Symbiosis, NPAT, Christ)
iii. Hotel Management – IIHM, NCHMCT, IHM

3. Management Entrance exams such as:

i. CAT
ii. XAT
iii. SNAP
iv. NMAT
v. MAT
vi. CMAT
vii. MHCET

4. Competitive Exams such as:

i. CRT

3
 ii. Government Exams

5. In-house Training
i. Aptitude Training
ii. Workshop
iii. Tech. Training

4
 1.2 SECTOR DETAILS.

India’s EdTech Platform is rapidly growing and acting as a catalyst the Outbreak of covid 19
pandemic. Which in turn had to witness shutting down of various Institutions led to Students and
professionals shifting to Online Learning.
This led to massive boost in the inflow of Investments, Acquisition, upgradation to their products.
India’s edtech industry is soon to become $30 billion in size in the next Decade, according to a
report by RBSA Advisors.

The current market size of Edtech is about ~ $700-800 million.

Byju’s is the market leader in the Edtech platform of India. Its valuation stands at $15 Billion. The
entire sector has Attracted Private equity investments of ~ $4 Billion in the previous 5 years.
Chinese investors are at a prime of investing in this Industry which accounts for $2.5 billion worth
of venture funding.
On the similar line another edtech leading platform upGrad Raised ~ $120 billion of investment
from Tamasek of Singapore.

"Online education offerings for classes 1 to 12 are projected to increase 6.3 .. X by 2022 from the
base of 2019," the report said. The post K-12 market is expected to grow 3.7X to touch $1.8 billion.

The massive adoption in the K-12 segment is being driven by access to smartphones, according to
Mihir Gupta, CEO of Teachmint, an all-in-one app for teachers, tutors and coaching institutes. He
said that live interactive classes, which are crucial to K-12 learning, have become accessible. "A
large chunk of students now have access to good quality internet. Two years ago, people were
operating on 2G or 3G networks where it was difficult to have an interactive experience in live
classes. 4G has solved that to a large extent," Gupta said.

Offerings on K-12 platforms have become more affordable. "Traditionally the spend by parents and
students on K-12 supplementary education has been low compared to post K-12. But now affordability
has increased, and people are spending more than they used to," he said.

5
India has around 3,500 EdTech startups. By 2018, the industry had amassed an impressive $700 Million
in funding. According to KPMG’s Online education in India: 2021 report, by 2021, the industry could be
worth $1.96 Billion.

(Source: KPMG)

6
What Makes EdTech Ideal for India (Banerjee )
In India the student teacher Ratio has always been unequal or unhealthy.
Students lack individual attention and then in turn loose the opportunities offered by the world due to lack
of calrification of doubts and thus restricting their ability to question.
The Edtech industry has tried to bridge this gap or has been successful in doing so as well.
There are plethora of difficulties that students face in India especially the ones appearing for professional
exams. They have to manage between work and learning simultaneously. The classroom timings are not
aligned and have to put in less hours of work to study extra.
Books are out of date; video is the new textbook: When it comes to study materials, printed textbooks
have fallen out of favour. The new generation of students prefers to ‘watch' courses rather than read about
them. Video courses that include lectures, multimedia graphics, and interactive elements make learning
more interesting and engaging. The visual method of learning also improves comprehension.
The EdTech market (which includes higher education, professional skilling courses, and, of course,
schooling) is expected to grow 8x to 10x in the next 60 months, from an estimated $700 million today (5-
years). Why? Because of the widespread adoption of online education following the pandemic outbreak,
which resulted in the closure of most institutions, including schools, colleges, and universities,
EdTech, which was already growing at a healthy double-digit rate year on year prior to Covid-19, received
a massive boost from investment, acquisition, offering upgrades, and more players quickly shifting and
adding students thanks to one of the lowest Internet data charges.
Consider the following: In India today, there are over 4,530 active EdTech start-ups, 435 of which were
founded in the last year.
These EdTech players provide a plethora of Apps for students of all ages. The more students and teachers
who accept the "new normal" (online classes), the better for those in charge of EdTech companies. Add
to that the beneficial impact of the recently announced National Education Policy (NEP 2020). If the
recommendations are followed, the Indian education sector will see even more growth.
The NEP 2020 recognises the need to capitalise on technology's benefits while also acknowledging its
potential risks and dangers. It emphasises the importance of conducting well-planned pilot studies to
determine the benefits of online education. The existing digital platforms will be optimised and expanded
to meet the challenges of providing quality education to all. To that end, the emphasis on the Digital India
Campaign will be ramped up and teachers will be given the required training to become effective online
educators.

7
In August 2020, the education technology platform Byju's, which is owned by Think and Learn, paid $300
million for the coding platform WhiteHat Jr. The plan was to make students aware of the rapidly expanding
field of coding in education technology. This is just one example of how quickly the industry is growing.

(Source: techinasia)

8
 (Source :Economic times)

9
 STRENGTH VIKALP CETKING/IMS BYJUS VEDANTU
COURSERA/UDEMY
Focus on Pioneer
Focus on only
Business only All stds All stds and Online courses and
MBA and other
Advantages Competitive and subjects certifications.
Entrance Exams
exams subjects
Largest
Entrance Exams presence High Online
preparation. online. presence.
Entrance
Core Physical A A substitute Certifications from
Exams
competency Classrooms substitute to the International Universities
preparation
present to the generic
nationwide generic Tuitions
Tuitions
Online Online
course course Upskilling and
Money is Tests and Physical tutoring,
material, material, certifications from
coming from counselling Online tests.
Online Online International Universities
Classes Classes
Customer Complete
What are you Word of mouth Availability of foreign
base School
doing well ? Marketing courses one click away
retention tutoring

WEAKNESS

What areas are Complete Credibility.

Online Physical Physical
you avoiding coaching from Physical Experience.
Presence. Classrooms Classrooms
School to college One to one Coaching

Creation of
Where do you Physical Physical No inter personal
an Online
lack resources? Presence Presence connection
presence
Creating
What needs
Online
improvement
presence
and Word

10
 of mouth
marketing

OPPORTUNITIES

Complete Complete
Entrance Entrance Exams Professional
Niches ? school school
Exams of India Certifications
coaching coaching
Exam Time
Beneficial Social Social
Crash - Social Distancing
Trends? Distancing Distancing
courses

THREATS

Other
Obstacles to Pan India Traditional Traditional Penetration & availability
competitors.
overcome Presence Teachers Teachers of Internet

CETKING,
Aggressive IMS, Other Traditional Traditional
Online websites Traditional degrees
competitors counselling Teachers Teachers
firms.
Table 1 (source: self study)

11
 CHAPTER 2: OBJECTIVES

Objectives of the study

• To understand the factors that affect the financial performance of select insurance companies in
the private sector of the Indian Insurance industry using financial Ratios
• To in depth understanding of the Profit and loss statement and balance sheet of the Insurance
company.
• To study the insurance sector India.

2.1 Review of Literature.

The Prior studies that have been conducted with respect to the factors that affect the profitability of the
Insurance Companies were reviewed as follows:
Determinants of insurance companies’ profitability Analysis of insurance sector in Ethiopia (2017) (Berhe
and Kaur 2017), In this research article the objective of the study was to identify the key factors that affect
the profitability of insurance companies in Ethiopia.The methodology used was Secondary type derived
from Annual reports and the tool for statistical Analysis was regression also Correlation between the
various Variables such as Insurer Size, Leverage ratio, Capital ratio etc.
Determinants of insurance companies profitability: an analysis of insurance sector of Pakistan (Bushra
and Qurat 2014) (2011) Study emphasizes on hypothesis such as positive relationship between age and
profitability of insurance companies in Pakistan , positive relationship between company size and
profitability of insurance companies in Pakistan, negative relationship between leverage and profitability
for Pakistani insurance companies.
To derive conclusion the tool used for statistical Analysis was multiple regression model.
The dependent variable being profitability and Age, size, leverage Ratio, Loss ratio being the independent
variable.
In an Empirical study by Charumathi (2012) “On the Determinants of Profitability of Indian life Insurers:
An Empirical Study (Charumathi 2012)” shows us how Return on asset has been an dependent variable
on the profitability of the Insurance Industry in India. The researcher carried out the research work by
using the secondary data
pertaining to the twenty-two private life insurers and one public insurer. The results concluded that the
profitability of life insurers was positively affected by the size of net premium and liquidity.
12
 2.2 Methodology
For this research I have used secondary type of Data which is obtained from Annual Reports of the
Various insurance firms that are prominent in the Indian sub-continent.
My project has a study of Insurance companies Operating in India namely
1) HDFC Standard Life Insurance Co. Ltd.
2) ICICI PRUDENTIAL LIFE

Based on the data available on the Ace equity portal and the Ratios Derived by them for the Annual report
for Period of 2018, 2019, 2020, 2021.
The Annual Reports provide the most true and fair view of the financial health of the company

2.3 Conceptual Framework:

This is a Diagrammatic representation of the Internal as well external factors Affecting the profitability of
Insurance companies. It helps to clearly understand the

(Fig1.2)

Leverage ratio Market Share

Capital ratio Insurers Size
Liquidity ratio

Expenses to Net

premium

Income to Asset

13
 2.4 Industry Overview

The overall penetration of Insurance in India turned into at 3.76% in 2019 (existence coverage 2.82% and
non-existence 0.94%) and the full coverage density in India turned into at seventy Eight in 2019-20
(existence coverage density: $58, non-existence coverage: $19).

The percentage of life Insurance in overall top class in India is 74.94% and the proportion of non-life is
25.06% (2019-20)
Life insurers recorded new commercial enterprise top class of INR 2.seventy eight tn ($38 bn) in FY21
developing at 7.49% over the past 12 months with personal life insurers developing at 16.29%. Private
Life Insurers account for 33.8% of the enterprise’s new commercial enterprise top class (FY21) with the
relaxation being accounted for via way of means of the Life Insurance Corporation of India (LIC).
The Life Insurance Industry recorded a complete top class of INR five.seventy three tn ($81.three bn) in
FY20 witnessing a boom of 12.75% over the preceding 12 months and the personal insurers accounted
for 33.7% of overall top class underwritten via way of means of the enterprise. New commercial enterprise
top class contributed 45.25% of the full top class and witnessed a robust boom of 20.59% over FY19. 60%
of the brand new commercial enterprise top class turned into derived from unmarried top class with last
40 counted for via way of means of first 12 months rates
The traditional (non-connected) merchandise accounted for 85% of the full top class written in FY20 and
percentage of ULIPs (connected merchandise) withinside the overall top class stood at 15%.
During the ultimate 12 months (FY20), existence insurers issued 288.forty seven lakh new man or woman
guidelines, out of which LIC issued 75.9% of guidelines and the personal existence insurers issued 24.1%
of guidelines.
In FY21, non-existence insurers (comprising popular insurers, standalone fitness insurers and specialised
insurers) recorded a five.19% boom in gross direct rates.
The marketplace percentage of personal region groups withinside the popular and medical health
insurance marketplace has accelerated from forty seven.97% in FY19 to 48.03% in FY20.
Motor coverage accounted for 34.1% of the non-existence coverage rates earned, accompanied via way
of means of medical health insurance at 29.five%, in FY21 Post-Covid growing call for for private
mobility area is main to a shift in automobile possession styles and can create an possibility for motor
insurers

14
Health coverage witnessed 13.three% boom in GDPI in FY21, even as hearthplace coverage and legal
responsibility coverage discovered 28.1% and 16.four% boom respectively withinside the identical period
Government schemes and monetary inclusion projects shall have helped in using the adoption &
penetration throughout all segments. The government’s flagship initiative for crop coverage (PMFBY)
has caused huge boom withinside the top class earnings for crop coverage, and now covers over fifty five
million farmer programs 12 months-on-12 months. Even at some stage in the COVID-19 lockdown period,
almost 70 lakh farmers have benefitted from it, and claims really well worth INR 87.four bn ($1.2 bn)
have been transferred to the beneficiaries.
AB PM-JAY is an entitlement-primarily based totally scheme beneathneath Ayushman Bharat and is
absolutely funded via way of means of the Government. It is the most important fitness guarantee scheme
withinside the global and ambitions at supplying a fitness cowl of INR 500,000 ($6,900) consistent with
own circle of relatives consistent with 12 months for secondary and tertiary care hospitalization to over
107 million susceptible families (about 500 million beneficiaries).
The coverage regulator IRDAI has additionally undertaken numerous projects in the direction of boosting
the coverage penetration, along with allowing insurers to behavior video-primarily based totally KYC,
launching standardized coverage merchandise and permitting insurers to provide rewards for low-threat
behavior.
Going forward, popular coverage groups can be key beneficiaries of the opening-up of economies,
specially with advanced change interest growing call for for motor and medical health insurance. Strong
boom withinside the car enterprise over the subsequent decade is anticipated to enhance the motor
coverage marketplace. Meanwhile, the existence coverage region will advantage from a steep yield curve,
with low short-time period charges and better long-time period charges.
Digital issuance and on line channels are anticipated to witness endured boom, the proportion of internet
aggregators inside virtual coverage has been continuously growing and internet-aggregators presently
originate 30-40% of virtual coverage.
The overall mortality safety hole in India stands at $16.five tn (as of 2019) with an expected safety hole
of 83% of overall safety need. This gives a massive possibility to existence insurers with an expected extra
existence top class possibility of average $seventy eight.2 bn yearly over 2020-30.

15
Major Investors:

Industry Associations:
Life Insurance Council is a organization that joints the various stakeholders of the sector. It develops and
works hand in hand with the Government, Regulatory Board and the Public. It is the prime face of the
Life Insurance industry In India.

Constituted under Sec.64C of Insurance Act 1938, the Life Insurance Council functions with several sub-
committees and including all life insurance companies in India. In India there are 24 life insurers who
offer a range of traditional and new innovative products.
Their Objective is to transform India’s life Insurance industry into a trustworthy and yet a Profitable sector,
simultaneously helping improve the lives of people.
2.5 Regulations
The IRDAI's functions include: regulating, ensuring, and promoting the orderly growth of the insurance
industry.
To establish rules for insurance companies' investment of funds.
To control the maintenance of the solvency margin.
To resolve disputes between insurers and intermediaries.
Other supporting organisations that aid in the operation of the industry Insurance is an intangible trade.
These intangible products come with the guarantee of protection against unforeseen losses. This, in turn,
carries the risk associated with the premium, and if any losses occur, they are set off in the future, which

16
is also known as servicing the policyholders. The analysis of these companies is entirely based on their
balance sheets.
The balance sheet is used by investors, promoters, and other analysts to determine a company's financial
health.
Everything is driven by the balance sheet; you don't start by projecting unit income and prices, but rather
by projecting loans (Interest-earning) and deposits (Interest-bearing).
Segregating Because interest, investments, and debt (an investment source) are associated with the
company's main operations, operating and financing activities are almost impossible. As a result,
principles such as "working capital" and "free cash flow" are inapplicable.

17
 CHAPTER 3: COMPANY OVERVIEW
HDFC LIFE:
Vision: Over the years, the HDFC Group has emerged as a leading financial conglomerate in India with
strong presence in banking, life and general insurance, asset management, venture capital and education
finance segments.
HDFC Life Insurance Company Ltd. is a long-term life insurance provider with its headquarters in
Mumbai, offering individual and group insurance services and incorporated on 14 August 2000.
Stock price: HDFCLIFE (NSE) ₹663.10 -15.60 (-2.30%)
20 Jul, 3:30 pm IST - Disclaimer
Headquarters: Mumbai
CEO: Vibha Padalkar (12 Sep 2018–)
Revenue: 1,687.7 crores INR (US$240 million, 2020)

ICIC LIFE:
ICICI Prudential Life Insurance Company Limited is a life insurance company in India. Established as a
joint venture between ICICI Bank and Prudential plc, ICICI Prudential is engaged in life insurance and
asset management business. The firm offers long term life insurance plans and is headquartered in
Mumbai. Wikipedia
CEO: N. S. Kannan (19 Jun 2018–)
Headquarters: Mumbai
Founded: 2000
Stock price: ICICIPRULI (NSE) ₹602.10 -24.15 (-3.86%)

18
 CHAPTER 4: ANALYSIS & FINDINGS
EBIT Margin
Earnings before interest and taxes (EBIT) is a percentage figure which shows the profitability of a
company from its operations after exempting Interest and Taxes. It reflects the profit the company makes
from its core operations.
EBIT margin helps to understand the profits generated from a company’s core operations and ignores the
effects of a financing decisions and taxes paid during the year of a company.
However for Insurance companies the EBITDA is not significant due to the fact Interest is a essential
aspect of each sales and expenses.

The Size of the Insurance company

The size of the Insurance company plays a significant role in the Analysis and valuation of the firm. Size
of the Insurance firm here implies the volume of business that the company undertakes.
The size of the company in my study is compared to the Total industry size of Insurance.
Now size plays a role as the bigger the enterprise or the Insurance company the more ability of the firm
to deal with the unpredictable market situations.
Another reason for size to matter is the diversified product offering the company has at the same time the
advantage of economies of scale.
However, there is no hard and fast rule for the Size of the firm to affect its profitability in anyway. The
size of the insurance matters because of the volume and number of claims they go through on the daily
basis. They enjoy economies of scale such as large cash reserves, sometimes large firms also have a
innovative product mix.

For this Report it is assumed that Market capitalization determines the Industry Size

ICICI Pru LIFE: 92,921(In Rs. crore)

HDFC LIFE: 134,088 (In Rs. crore)

19
Capital Adequacy ratio
This ratio tries to determine the excess of Assets to liabilities of the Insurance companies.
This indicates the financial strength of the Insurance company at the same time shows the ability to survive
in the long run.
Insurance companies with higher equity to asset ratio are considered to be financially more stable and
capable of attracting various policyholders. In another words, insurance companies with higher capital
adequacy ratio are relatively assumed to be safe in adverse situations. On the other hand, the higher the
ratio of equity to asset of insurers, the lower is the risk and this could pave a way to increase them.
credit worthiness. Consequently, insurers will have lower cost of funding. Furthermore, insurance
companies with higher equity to asset ratio will have less demand to raise funds from external sources.
However, it is very difficult to confirm what relationship exists between equity.
HDFC LIFE
Table 2 (Rs’000)
2021 2020 2019 2018
EQUITY 20,209,440 20,187,984 20173812 20117400
ASSETS 49,643,070 43,070,370 40408106 43383739

ICICI PRU LIFE

Table 2 (Rs’000)
2021 2020
EQUITY 14,359,742 14,358,626
ASSETS 38,973,103 38,394,572

Table 3 (in percentage)

Insurer/ Year 2021 2020 2019 2018
HDFC LIFE 39.94 46.58 49.92 46.37
ICICI LIFE 36.84 37.39 20 30
Source: Derived from table
The Data suggests that HDFC LIFE’s Asset to equity ratio has dropped from the previous Year.
- Their share capital has increased by ~21,456, and its Total asset have increased by ~ 7,163,449.
For ICICI Pru’ LIFE there is no substantial change in the Asset to equity ratio.
- The Cash and bank balances have dropped by ~ 2,535,742 which can be the possible cause for it.

20
 ASSET TO EQUITY
HDFC ICICI

60
50
40
30
20
10
0
2021 2020 2019 2018

(Fig:2)

21
Interest Coverage ratio
The interest coverage ratio is a ratio that helps to derive the company’s ability to service its debt on a
timely manner.
This is a liquidity ratio; however this does not imply making principle payments. It only calculates the
firm’s ability to pay the interest on the debt.
Lenders and financial backers utilize this calculation to comprehend the benefit and hazard of an
organization. For example, a financial backer is basically worried about seeing his interest in the
organization expansion in esteem. An enormous piece of this appreciation depends on benefits and
functional efficiencies. In this manner, financial backers need to see that their organization can take care
of its bills on schedule without forfeiting its tasks and benefits.
A leaser, then again, utilizes the interest inclusion proportion to distinguish whether an organization can
uphold extra obligation. In the event that an organization can't bear to pay the interest on its obligation,
it surely will not have the option to stand to pay the rule installments. Along these lines, banks utilize
this recipe to figure the danger implied in loaning.
Interest Coverage Ratio= Interest Expense
EBIT

where:
EBIT=Earnings before interest and taxes

22
liquidity Ratio:
The liquidity ratio of relation of associate degree beneath writer | underwriter | no depository financial
institution} includes many a lot of ratios, that acquire play whereas checking however a corporation
sounds financially. Following are the ratios that come back under this ratio:

This quantitative relation could be a variety of liquidity ratio that measures the money strength of a
company. Generally, we have a tendency to take 2:1 as a perfect liquidity ratio for degree insurance
underwriter however it should vary from company to company. The formula for current ratio is : Current
Assets / Current Liabilities.
G

An permissible current is Ratio 2:1 which

means that the company has Rs 2 Current assets
for every Rs 1 Of current Liabilities.

Table 3
2021 2020 2019 2018
HDFC LIFE 0.77 1.09 0.79 0.76
ICICI LIFE 1.03 1.1 0.91 0.78

The current ratio indicates the Liquidity position of the company. Which implies the ability of the
company to repay short term loans that are due within the year. The Current Ratio has dropped over the
two year During 2021 for HDFC life.
Now, for ICICI prudential LIFE, The current ratio is not the standard current ratio.

CURRENT RATIO
HDFC LIFE ICICI LIFE

1.5

0.5

0
2021 2020 2019 2018

23
 (Fig 3)
Expenses to Net Premium ratio
This ratio highlights the relationship between the amount of expenses Incurred in order to earn the Net
premium. It reflects the ability of the company to minimize its expenses while not compromising on the
net premium.

A preferred low ratio as it indicates high

Premuims to low expenses incurred

Expenses
Expenses to Net Premium Ratio= --------------------x 100
Net Premium

ICICI PRU LIFE

Table 4 (Rs’000)
Expenses related to Insurance Adjusted Gross Premium
2021 43,270,436
Commission Expenses 3,277,779
Operating Expenses 3,482,737

2020 40,013,958
Commission Expenses 3,112,133
Operating Expenses 3,327,249

2019 34,685,300
Commission Expenses 2,411,166
Operating Expenses 2,930,891

2018 31,802,204
Commission Expenses 2,650,018

24
 Operating Expenses 3,112,403

HDFC LIFE
Table 5 (Rs’000)
Expenses related to Insurance Adjusted Gross Premium
2021 385,381,128
Commission Expenses 17,103,985
Operating Expenses 45,859,705

2020 331,901,869
Commission Expenses 14,911,820
Operating Expenses 42,668,968
2019
Commission Expenses 11,824,647 289,306,716
Operating Expenses 41,182,764
2018
Commission Expenses 11,376,943 233,709,665
Operating Expenses 32,539,963

Table 6 (in percentage)

Insurer/ Year 2021 2020 2019 2018
HDFC LIFE 16.34 17.35 18.32 18.79
ICICI LIFE 15.62 16.09 15.04 18.12
Source: Computed from Table 5 & 6.

25
 EXPENSES TO NET PREMUIM
HDFC LIFE ICICI LIFE

20.00

15.00

10.00

5.00

0.00
2021 2020 2019 2018

( Fig 4)

26
Investment Income to Investment Assets Ratio:
The second from top source of income for an insurance company is Investments. Now the relationship
of Investment income to the Investment assets indicates the effectiveness of the Investment decision or
portfolio of the Insurance company.

Investment Income
Investment Income to Investment Assets Ratio = ------------------------------------- x100
Investment Assets

A preferred higher ratio as it indicates

high returns on the done Investments

ICICI PRU LIFE

Table 7 (Rs’000)
2021 2020 2019 2018
The investment assets 100,807,139 74,152,214 79,861,476 77,465,940
here, refers to all
investments made out
of shareholder’s
funds
Policy holders 241,760,793 179,482,133 155,709,802 127,079,055
Investment asset

Interest income on 12,392,169 10,575,752 8,737,133 7,189,183

policyholders’
investments
Interest income on 4,835,134 4,504,414 4,504,414 4,216,170
shareholders’
investments

27
 HDFC LIFE
2021 2020 2019 2018
The investment assets 85,421,141 58,554,800 50,359,972 40,573,509
here, refers to all
investments made out
of shareholder’s
funds
Policy holders 905,378,342 671,886,101 571,244,594 453,471,355
Investment asset

Interest income on 78,611,535 68,453,166 56,791,675 47,353,912

policyholders’
investments
Interest income on 4,382,011 3,602,546 3,106,930 2,289,234
shareholders’
investments
Table 8 (Rs’000)

Table 9 (in percentage)

Insurer/ Year 2021 2020 2019 2018
HDFC LIFE 8.37 9.86 9.63 10.04
ICICI LIFE 5.02 5.94 5.62 5.57
Source: Computed from Table 7 & 8
- It is evident from the data that HDFC LIFE has higher returns from its investments.
- ICICI LIFE however has a consistent return for both the Years.

28
 INCOME TO INVESTMENT RATIO
HDFC LIFE ICICI LIFE

15

10

0
2021 2020 2019 2018

(Fig 5)

29
Return On equity:
The ROE of the Insurance company shows us the ability of the business to generate adequate returns on
the capital invested by the shareholders of the company.
It indicates the decision making of the management in making Investment decisions

Profit after Tax

Return on Equity ratio = ----------------------- x 100
Equity

A higher ratio is the index of high

profitability of the business and more
dividends for the shareholders.

ICICI PRU LIFE

Table 10 (Rs’000)
2021 2020 2019 2018
PAT 9,561,554 10,669,794 11,389,262 16,191,653
Equity 14,359,742 14,358,626 14,357,845 14,354,987

HDFC LIFE
Table 11 (Rs’000)
2021 2020 2019 2018
PAT 13,601,045 12,952,662 12,779,251 11,072,030

Equity 20,209,440 20,187,984 20,173,812 20,117,400

30
 Table 12 (in percentage)
Insurer/ Year 2021 2020 2019 2018
HDFC LIFE 67.30 64.16 63.34 55.03
ICICI LIFE 66.58 74.30 79.32 112.79
Source: Computed from Table 10 & 11

RETURN ON EQUITY
HDFC LIFE ICICI LIFE

150

100

50

0
2021 2020 2019 2018

31
 CHAPTER 5: LIMITATIONS:
• Some companies have not disclosed complete data which is a hurdle to draw rightful
conclusions.
• This report is based on my understanding of the subject.

32
 BIBLIOGRAPHY
https://economictimes.indiatimes.com/tech/technology/indian-edtech-industrys-market-size-to-
reach-30-billion-in-10-years-report/articleshow/82295097.cms

https://www.moengage.com/blog/industry-study-edtech-in-india-and-how-onlinetyari-uses-data-
to-succeed/

http://www.businessworld.in/article/EdTech-Market-Is-Booming-In-India-/20-09-2020-322696/

https://www.toptal.com/finance/market-research-analysts/edtech-trends-2020

https://www.expresscomputer.in/guest-blogs/key-factors-and-trends-influencing-the-
development-of-the-edtech-industry-worldwide/33810/

https://analyticsindiamag.com/how-the-economic-downturn-can-benefit-the-ed-tech-industry/

https://www.grandviewresearch.com/industry-analysis/education-technology-market

https://www.asianage.com/business/in-other-news/061119/how-ed-tech-players-are-contributing-
to-the-indian-economy.html

https://thedailyguardian.com/a-prudent-approach-to-ed-tech-regulatory-prism-for-the-sector/

https://www.indiainfoline.com/article/news-sector-others/how-to-read-insurance-
company%E2%80%99s-balance-sheet-113111404403_1.html
s
https://financialservices.gov.in/insurance-divisions/Public-Sector-Insurance-Companies

33
 Annual report of 2021 and 2021 of ICICI and HDFC.

34