Group 4: Portfolio Analysis of ICICI Lombard and New India Assurance

Indian Institute of Management Bangalore
Portfolio
GroupAnalysis
4 of
ICICI Lombard and
New India Assurance
A Project on Marketing Management
Submitted to Prof. Y L R Moorthi
By
Ajay Bhatia - 0911289
D Dineshkumar - 0911305
Rangineni Srikanth -
0911336
Vandit Bhurat - 0911352
A Project on Marketing Management Group
4
Acknowledgement
We sincerely acknowledge our gratitude to Kalluri Raghuram, Prof. G

Sabarinathan, Prof. D. Pasupati and Sriram Krishnaswamy for their valuable
suggestions and constant encouragement for successful completion of the project.
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Introduction
The non-life or general insurance industry in India has grown rapidly in the past few
years. The sector registered an astounding growth of 11% in 2008. This market has
witnessed a number of policy and regulatory changes in the last decade, resulting in
intense competition from private companies.
In 2008, there were 21 companies operating in this sector in India1, of which 15 are
private companies. The key players of the market include:
Public Sector: National Insurance Company Limited, Oriental Insurance Limited,

New India Assurance Company Limited and United India Insurance Company
Limited.
Private Sector: Bajaj Allianz, Tata AIG, ICICI Lombard, Reliance General Insurance.
These companies offer products in various segments like

1) Fire 2) Health 3) Motor 4) Accident 5) Marine
This report tries to capture the key features of the non-life insurance market and to
analyse the relative performance of ICICI Lombard and New India Assurance vis-à-
vis the attractiveness of each segment
We have divided our study in three parts:
1) Segment Analysis – Analyze the attractiveness of different segments in the

insurance sector based on specific criteria.
2) Company Competitiveness Analysis – Study and analysis of different

companies in all the segments on the basis of critical success factor
3) Portfolio matrix – Segment Portfolio matrix is a 2D Framework which tries

to capture the relative performance of two companies in each segment with
respect to the relative attractiveness of the segment.
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Segment Attractiveness
There are 5 major line of business in non-life Insurance – Fire, Marine, Motor, Health
and Accident. Each of these segments offers varying degree of attractiveness. This
section tries to assess the relative attractiveness of each segment based on certain
criterion.
As per our analysis, we have identified the below criteria to be the key factors which
determines the attractiveness of the segment.
1. Profitability
2. Growth Rate
3. Competition Intensity
4. Market Share
5. Untapped Potential
6. Chances for Fraud
7. Scope of Product Differentiation
8. Distinctiveness of Distribution Channel
The segments are graded for each of the above parameters in relative scale from 1
to 5 with 1 as least attractive and 5 being most attractive.
1) Profitability
The basic criterion which determines the attractiveness of the segment will be its
Profitability. Profitability of a company operating in any Insurance segment mainly
depends on two factors
a) Incurred Claims ratio
b) Cost of Operation
Incurred Claims ratio

Incurred Claims Ratio = Claims Incurred / Total Premium earned
As the formula indicates, Claims ratio gives a high level indication of the profit\Loss
margin one can expect by operating in the segment. Lower the Claims ratio, the
more attractive the segment is. The amount of Claims incurred in turn depends on
numerous factors and varies from Insurance segment to segment. Let’s have a look
at each segment in isolation
Fire Insurance
Fire Insurance is the most profitable with lowest claims ratio, the reason being the
very less probable occurrence of the risk (fire accident) and the robust fraudulency
check in place post incident. Fire segment which used to have a claims ratio in the
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range of “40-60%” some 3 years back has undergone a series of set-backs after the
announcement of detarrification1 in Jan 2007. As a result of the detarrification,
companies are free to adapt their own pricing strategy. Still Fire Insurance has
better profitability when compared to the other segments.
Marine Insurance
The frequency of risk occurrence is very less, but each instance of risk will have
huge claims value. It has a claims ratio of around 60-90%. But most of the marine
policies are reinsured to a large extent since the sum assured under each category
is of large magnitude. Over the years marine has been a profitable portfolio, but
there have been some sporadic instances of unfavorable claim ratios (because of
higher claim value).
Motor Insurance
Being the segment with highest market share & highest penetration, it has adverse
claim histories. It was one of the loss-making segments. It has claims ratio in the
range of 80- 120%. The private players in the past have been reluctant to enter this
sector. In order to reduce the burden, the regulator created a Third party Motor
vehicle pool, wherein an insurer’s participation in premium and losses is based on
its market share in all the businesses. This pool is managed by GIC. Also the
premium rate has been increased on a large scale to offset these losses.
Health Insurance
Health Insurance has been one of the least profitable sectors with claims ratio in the
range of 120–150%. The reason for this low profitability can be attributed to
• Varying treatment costs across providers due to limited bargaining power
• Lack of standardization & accreditation in most healthcare facilities leading to
difficulty in judging the authenticity of procedures & costs
• Ease of Fraud and ineffective fraudulency check
• Insufficient data on Indian consumers & disease patterns resulting in difficulty
in product development & pricing
Accident Insurance
Personal Accident Insurance is one segment which is still in its niche stages. Being a
retail Insurance segment, it has a huge potential for growth like Health Insurance.
The segment being relatively new and having less volume does not have a claims
ratio which is consistent across the companies. Hence one can see a huge variation
in claims ratio’s between companies and in fact within a company between different
years.
Cost of operation
Major chunk of the cost of operation is contributed by commission paid to the
agents, salary paid to the employees and advertisement and promotion expenses.
Since most of the companies have their presence in all the Insurance segments.
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Most of the fixed costs like Advertisements & Sales promotion are done at the
company level and not at the segment level. But some of the variable costs like
commission to agents can be divided or distinguished between different segments.
One can observe that these variable costs are directly proportional to the
company’s market share in the segment. Hence as the company’s market share
grows, its variable cost also goes up. But the company starts enjoying economies of
scale with respect to the fixed cost.
Considering the above facts, one can say that impact of cost of operation on the
profitability does not vary significantly between the segments.
Profitability
Segmen Incurred Claims Ra
t Ratio nk
Fire 68.69 5
Motor 92.31 3
Health 107 1
Marine 86.68 4
Accident 102 2
2) Growth Rate
Sector growth rate is one of the crucial factors in segment attractiveness criteria.
With the opening up of insurance sector, many new players entered the market.
Growth Rate in Premium underwritten from 2007 to 2008 is an appropriate
indication of the segment growth rate. The relative rating of the segment based on
the growth rate is given in the table below
Growth Rate in Premium Underwritten

2007-2008
Segm 2006- 2007- Growth Ra
ent 07 08 Rate nk
2221. 2037.
Fire 58 83 -8.27% 1
900.0 980.9
Marine 2 4 8.99% 3
2242. 3106.
Health 63 84 38.54% 5
5847. 6459.
Motor 57 98 10.47% 4
Accide 394.9
nt 1 432.9 9.62% 3
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Active competition, improvement in distribution and increasing awareness of the

insurance resulted in attractive growth rate in the industry.
➢ Fire Insurance has shown a decline in market share because of detariffication
leading to price wars and decrease in premium.
➢ Health Insurance has been growing significantly owing to increased
awareness amongst people and the entry of specialized player in the
segment. Same is the case with accident insurance.
➢ The growth in this segment is directly related to growth in automobile
industry and legislative environment (The insurance act, The Motor Vehicle
Act, The Indian motor tariff).
➢ Growth rate of marine is low when compared to other segments. The average
growth rate of this segment is 1.9%.
3) Competition Intensity
Like any other industry the level of existing competition in each segment also
decides its segment attractiveness. The lesser the competition the more attractive
the segment is.
Number of insurance providers is a good indication of the level of competition.

There are 21 registered non-life insurance companies in India; 6 public and 17
private. Out of the public insurers the Employee Credit Guarantee Corporation and
Agricultural Insurance Company of India are specialized to the needs of specific
sectors. Apart from this there are 2 dedicated private health insurers - Apollo DKV
and Star Health. All the other players offer services in all segments. The number of
insurers therefore is not a good measure of the relative competition among
segments.
To measure the relative competitiveness we analyzed the total market share of the
top 4 companies in each segment over the last three years (exhibit 1). A large
fluctuation in this share over the years indicates high competition. Greater the
fluctuation, more competitive the segment is.
The result of this analysis is summarized in table below.
Competition Intensity-Absolute Change in

Market Share
Segm 2007- 2008- Su Rati
ent 2008 2009 m ng
0.7204594 11.952199 12.6
Fire 1 39 7 3
12.652673 18.276382 30.9
Marine 06 14 3 1
2.9916932 8.9006029 11.8
Motor 67 99 9 3
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21.296315 4.3744061 25.6
Health 91 26 7 2
Accide 1.1802813 5.7481342
nt 43 32 6.93 5
4) Market Share
Greater the market share (premium), greater will be the gross profit realized
by the company. The table below shows the market share of in 2007-08. Motor
Insurance occupies the highest market share occupying 43.98%, followed by health
(19.9%), fire (11.18%)1 and Marine(6.5%). Fire insurance in spite of being profitable
has declined in market share because of the price pressure caused by
detariffication. Health & Motor Insurance has shown a steady growth over the past
decade.
Market Share in 2007-08

Segme Premiu Market Ra
nt m Share nk
Fire 3420.04 11.18% 3
Marine 1990.7 6.50% 2
Health 6090.37 19.90% 4
13458.4
Motor 8 43.98% 5
Accident 902.91 2.95% 1
5) Untapped Potential
Greater the untapped market easier it is to enter into the segment. The Untapped
potential in each segment in assessed keeping in mind the following
1) The Health Insurance is one of the least explored and fastest growing segments
in India. The segment stood at Rs. 5125 crores in 2008 covering just 2% of the
population of the country. The penetration ration of accident Insurance is similar to
health
2) Fire insurance targets large and medium corporate houses. There is significant
untapped potential in the form of retail businesses and individual homes.
3) Motor insurance has very less untapped potential owing to government
mandated insurance policy.
4) Normally businesses insure goods while transporting them leaving very less
untapped potential in marine insurance.
Based on the above analysis the segments are rated as follows

Segme Untapped Ra
nt potential nk
Fire Medium 3
Marine Low 2
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Health Very High 5
Motor Very Low 1
Accident High 4
6) Chances for Fraud

Fraudulent Claims is the one of the most serious issues facing the insurance
companies. Higher the possibility of frauds the less attractive the segment
becomes. It not only makes more loss on claims but is also forced to incur more
expenses on thorough investigation to avoid false claims.
The segments are rated based on two factors

1) The ease of committing a fraud 2) Robustness of Fraudulency check
Losses due to frauds is highest in motor and health due to high ease of committing
fraud accompanied by difficulty in fraudulency check by the companies as it’s
difficult to go and investigate each and every claim made by the customers. This is
followed by accident and marine insurance in which frauds can be detected up to an
extent with the help of the investigation teams. In case of fire insurance there is a
high robustness of fraudulency check which lowers the ease of committing fraud
making the losses due to fire insurance fraud the lowest.
Type of Ease of Robustness of Ratin

Insurance Committing Fraud Fraudulency Check gs
Motor High Low 1
Health High Low 1
Fire Low High 5
Accident Medium Medium 3
Marine Low Medium 4
7) Scope for Product Differentiation

In the detariffied regime and with the increasing competition, profitability and
growth would be driven by product innovation. The scope for product differentiation
and innovation varies across the segments.
Under the detariffication conditions, where people differ with respect to preferences
and risk evaluation, the scope for product differentiation is huge. In a market
wherein the insurers know the expected cost for each individual in terms of his risk;
product differentiation and innovation becomes an integral part.
Health Insurance
Health Insurance presents a sizeable opportunity for growth and product
differentiation. The escalating cost of medical treatment today is leading to an
increase in the demand for health insurance. Moreover there is huge variability
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involved in terms of different diseases involved; time span of diseases; age based
disease differentiation. Hence health insurance is the most promising segment in
terms of product differentiation such as cashless hospitalization, health plus
international credit cards etc.
Accident Insurance
After Health, the accident insurance segment is the most attractive segment.
Accidents may occur in different ways which is why the scope for product
differentiation is huge. Moreover the potential customer for this segment is each
and every individual irrespective of age, profession and location. As a result the risk
involved varies which calls for different innovative products such as missile testing
insurance
Fire Insurance
Fire insurance is again related to accidents and involves a wide range of customers
having varied risk factor. The scope for product differentiation can be seen in terms
of plans for different corporate, personal housings, multiplexes, stadiums and other
buildings. Based on the evaluation of the risk involved different products can be
customized for different cases.
Motor Insurance
Motor insurance is a compulsory insurance and every new vehicle on the road has
the insurance and hence the scope for product differentiation or the motivation for
the same is not so attractive. And the variability in the motor insurance is also low
in terms of the different aspects of motor being insured; with people giving little
importance to the different features of the motor insurance which comes along with
the vehicle. Product differentiation can be seen in terms of extension of insurance
to motor accessories, passenger insurance and so on. However this segment is not
so promising in terms of product differentiation.
Marine Insurance
Marine Insurance segment is the least attractive among the other segments in
terms of product differentiation. It is majorly concerned with cargo and hull
insurance and the scope for differentiation is not too attractive.
Segm Product/Diffe
ent rentiation
Fire 3
Marin
e 1
Motor 2
Accid
ent 4
Healt
h 5
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8) Distribution channels
One of the important challenges faced by the insurance industry is using the right
distribution channel to reach the potential customer. There are multiple channels to
take insurance to a customer. Some segments have an edge over the others due to
the distinctiveness of distribution channel. For example, fire insurance can be
distributed through hospitals and pharmacies and motor insurance through car
dealers. The table below summarizes the types of channels that can be leveraged in
each segment.
Segment-Wise Distinctiveness of Distribution Channel

Healt Moto Marin Accide
Segment Fire h r e nt
Individual Agents     
Corporate Agents     
Brokers     
Bancassurance(B
   
anks)
Worksite
 
Marketing
Internet   
Telemarketing  
Hospitals  
Dealers/Garages 
Transport Cos 
NGOs, MFIs,
 
SHGs
Retailassurance   
Add on benefit  
Total 4 11 7 4 10
Though health and accident appears to most attractive based on distribution

channel, the following considerations were also made before ranking the segments.
1) The fire insurance cannot be issued without the permission of the insurer. Insured
should have insurable interest in the asset at the time of contract as well as at the
time of loss. This is limiting the number of distribution channels possible in fire
insurance.
2) Though the penetration of distribution network of health insurance is less, it is
growing at a rapid pace. The government is easing regulations and actively
encouraging worksite marketing, TPAs and NGOs to popularize health insurance.
3) With compulsory insurance policy for automobiles, motor insurance has highly
penetrated distribution network.
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4) Marine insurance is sold through transport companies which makes it readily
available while transferring cargo.
Segme Attractiven
nt ess
Fire 2
Marine 4
Motor 5
Acciden
t 3
Health 3
Final Segment Attractiveness Ratings

Different Parameters are given different weights to determine the final rating of
each segment.
1) Profitability is assessed as the most predominant factor in determining the

attractiveness of the segment with a weight of 20%. Company should try to avoid
segments which offer very little chance to make sustainable profits.
2) Market Share and Product Differentiation is the next most determining factor
(15%). Segments that have less market share only offers small revenue. This is not
desirable especially for large players like New India and ICICI Lombard. For an
almost stagnant industry like non-life insurance the best move a company can take
to be distinct is product differentiation
3) All the other parameters are of equal weight as it is difficult to undermine the
significance of any in determining attractiveness.
Based on the above weight each segment was ranked as shown in table below. This
is again in a 1 to 5 scale with 1 denoting least attractive and 5 indicating most
attractive.
Segment Attractiveness
Fir Marin Moto Healt Acciden
Criterion Weights e e r h t
Profitability 20% 5 4 3 1 2
Growth Rate 10% 1 3 4 5 3
Competition 10% 3 1 3 2 5
Market share 15% 3 2 5 4 1
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Chances for Fraud 10% 5 4 1 1 3
Untapped Potential 10% 3 2 1 5 4
Product
Differentiation 15% 3 1 2 5 4
Distribution channels 10% 2 4 5 3 3
Net Rating 3.3 2.65 3.05 3.15 2.95
Critical Success Factors

The success of a company in any sector depends upon its competency in taking
care of the Critical Success Factor (CSFs). The relative competitiveness of a
company vis-à-vis its competitor can be measured using CSFs.
Based on the analysis the following factors are identified as CSFs for non-life
insurance segments.
1) Brand Value
2) Client Service
3) Strength of Distribution
4) Product Differentiation
5) Claim Settlement Ability
6) Underwriting Performance
7) Prudent Investing
The relative competitiveness of ICICI Lombard and New India Assurance for each
segment is rated based on these parameters in scale from 1 to 5 with 5 denoting
most competitive and 1 as least competitive.
1) Brand Value
Brand of value of insurance companies depends on a number of factors like
advertising effort, experience in business, brand value of parent company, general
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customer opinion etc. Business Standard, In the February 10, 2008 issue rated the
general insurance company on its brand image (Exhibit 7). This rating is used as an
appropriate measure to grade the brand value of each company as shown below.
Image Brand
Company Score Value
ICICI Lombard 11538 5
New India 4860 2
2) Client Service
The success of an insurance company depends to a great extend on the level of
service offered to its customers. Unlike other CSFs this is an internal factor and also
is a measure of the success of the company. Customer service has a feedback
effect on the company. The quality of service can impact the success of the
company in two ways.
a) A major share of the income is through policy renewal. An unsatisfied customer

will most definitely seek a new insurer. Therefore it is imperative for every
insurance company to maintain high levels of satisfaction for retention of
customers.
b) Good service can also build a reliable image for the company and fuel sustained
word-of-mouth marketing. A new Customer decision is largely influenced by the
opinion of existing policy-holders.
Customer service is of extreme significance for insurance especially because

interactions with customers take place continuously and in different stages. The
company has to offer good service at all these stages to retain and also to expand
its customer-base. The rating of companies for this factor is carried based on third-
party rating.
Health and Accident Insurance

A survey on customer satisfaction was carried out by May-June 2006 issue of
Customer Voice. The survey was based on the following parameters
1) TPA 2) Tangibility 3) Problem Solving 4) Reliability 5) Responsiveness 6)
Assurance 7) Empathy
The result of the survey is given in (Exhibit 2).
Since the type of personal care and service in accident insurance is relatively
similar to health insurance, the same rating is used for accident
Motor Insurance
Each company is rated on the basis of the recent study released by J D Power on
Customer Satisfaction Index (CSI) of General Insurance companies in Indian Auto
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Sector (Exhibit 3). The industry average is 761. This is given a grade of 3. ICICI
Lombard was rated at the top of the list with a score of 775. ICICI is therefore
graded as 5. The other companies are graded based on these two ratings. Since the
type of personal care and service in accident insurance is relatively similar to Motor
insurance, the same rating is used for accident as well.
Fire and Marine Insurance

There are no dedicated data or survey available on fire, marine insurance. These
are distributed primarily through corporate agents similar to motor Insurance. The
customer ratings of motor insurance are therefore used for these segments as well.
Based on the above inputs the segment wise grades of ICICI Lombard and New India
Assurance for customer service are as summarized in the table below
Heal Mot Accid Mari

Company th or ent Fire ne
ICICI
Lombard 5 5 5 5 5
New India 1 3 1 3 3
3) Strength of Distribution
The number of customers covered by the company is directly related to the
strength of its distribution network. Both ICICI and NIA have strong distribution
network and are actively exploring new channels. The Distribution strength of each
segment is based on the major channels used by both companies. This include
1) Brokers: Since brokers distribute insurance policies of all insurers, the relative
aggressiveness of each broker depends on the commission that a company is
willing to pay. NIA pays an average commission of 9% of premium while ICICI
Lombard has limited this to 6%.
2) Agents: The number of agents (individual and corporate) for the leading
insurance companies is given in (exhibit 6). This is used to rate the strength of
agency network of ICICI Lombard and New India
3) Bancassurance: NIA and ICICI Lombard have tied up with SBI and ICICI
respectively to distribute their products. Though the number of branches is more for
SBI, we have given a more rating to ICICI Lombard. ICICI being the parent company
is involved in more aggressive selling in its branches.
4) Internet & Telemarketing: ICICI has well-developed online distribution

network which enables policy issue and renewal. New India is yet to leverage the
use of internet for distribution.
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Internet &
Commission Individua Corporat Bancassur Telemarke
Company s to brokers l Agents e Agents ance ting
ICICI
Lombard 2 2 3 3 5
NIA 3 4 5 3 1
All these channels are not used in all segments. Since most of the clients of Fire and
Marine are commercial institutions, corporate agents play a major role in these
segments. Health is usually distributed through employers and therefore corporate
agents are inevitable here as well. The relative reach of individual agents is
maximum in health and motor as these targets mainly retail customers. Internet
banking is predominant in health and accident but is absent in fire and marine.
Relative importance of distribution channels in each of the segments is rated in
below table.
Healt Marin Accide

Channel Fire Motor h e nt
Brokers 25% 15% 15% 20% 15%
Individual Agents 15% 30% 30% 30% 25%
Corporate Agents 35% 20% 30% 50% 35%
Bancassurance 25% 30% 15% 0% 15%
Internet &
Telemarketing 0% 5% 10% 0% 10%
Based on the above weights and ranks ICICI and NIA are rated as below
Moto Healt Marin Accide

Segment Fire r h e nt
ICICI
Lombard 2.6 2.65 2.8 2.5 2.8
New India 4.1 4.35 4.2 3.9 4.2
4) Product Differentiation
The detariffication of sector resulted in increased competition and considerable
pricing pressure. It facilitated product innovation and customization to suit the
specific need of the customers. Innovative pricing, product development and
product differentiation have become critical factors for success and demand a
disciplined customer-centric approach to expand the market and improve
penetration.
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Pricing
Detarrification has caused intense price war in the segment. The premium rates are
at the lowest possible sustenance level. Intense competition has forced all players
to focus more on product rather than price. Therefore pricing no longer offers any
advantage in this sector for any segment.
Product Innovation
Companies have tried to appeal to the customers with customized fit-to-the-needs
insurance schemes to score over the competition. Innovation has resulted in
bundling and customization of products. For example, apart from offering accident
and fire insurance exclusively, they also offer both in a single scheme.
To rate the companies on the basis of product differentiation, All the policies offered
by a company was scrutinized to see what segment each covers. For example,
Baggage Insurance from New India Assurance offers fire and accident insurance. All
the insurance plans are summarized in (exhibit 4 and 5). The table below gives the
synopsis of this analysis and the resulting rating.
Product Differentiation
ICICI Lombard New India
Segmen No. of Gra No. of Gra
ts Products de Products de
Fire 18 5 10 4
Health 28 5 4 1
Motor 4 3 1 1
Marine 4 3 3 2
Accident 24 5 19 4
5) Claim Settlement Ability

The ability to settle claims quickly is an important parameter used to rate insurance
companies. Clients, especially commercial establishments, prefer companies with
huge liquidity. Solvency ratio can be used as a measure to rate this ability.
The solvency ratio of an insurance company is the size of its capital relative to
premium written. It is often defined as:
Solvency Ratio = Net Assets / Net Premium Written
The solvency ratio is a measure of the risk an insurer faces of claims that it cannot
absorb. It is a basic measure of how financially sound an insurer is. In India, insurers
are required to maintain a minimum ratio of 1.5.
The solvency ratio of Insurers as on March 31 2008 is used for grading (Exhibit 8).
From the various solvency ratios, the industry average comes out to 2.13, which on
a scale of 5, is rated as 3. All the other ratios are rated accordingly.
Company Solvency Claim
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Ratio Settlement
ICICI Lombard 2.03 1
New India 4 5
6) Underwriting Performance
The Underwriting performance of an Insurance company is measured by a
ratio called “Combined Ratio”. A insurers combined Ratio is measured by
combining the net incurred claims and insurance-related expenses as a percentage
of net premiums. A combined ratio of less than 100% indicates that company is
generating positive return and more than 100% indicates the company is
encountering loss. For example combined ratio of 120% indicates that for every
rupee received as premium the company is spending Rs 1.20.
Combined Ratio = (Net Incurred Claims + Operation Expenses +

Commission) / Total Premium earned
Underwriting performance in the industry has been under increasing

pressure, especially since detarrification, which resulted in a price-war leading to
drop in premium rates to an extent of 80-85% in most segments. This also resulted
in the combined ratio of less than 100%, unreachable for the industry.
To compare ICICI and New India Assurance (NIA) in this aspect, we have taken the
average combined ratio for the last 3 years. The average is taken in order to
minimize any adverse impact on one year. The calculation of the combined ratios
and other ratios is shown in Exhibit 9 in detail.
New India ICICI

Expen Expen
Segme Combin Claims se Gra Combin Claims se Gra
nts ed Ratio Ratio ratio de ed Ratio Ratio ratio de
136.74 101.19
Health 184.37% % 47.63% 3 149.99% % 48.80% 4
Fire 99.47% 61.49% 37.98% 5 160.62% 61.58% 99.04% 4
157.36 238.55
Marine 133.74% 80.46% 53.28% 4 395.92% % % 1
108.47
Motor 143.19% % 34.72% 4 114.14% 73.65% 40.49% 5
Accide 139.06 137.85
nt 118.50% 80.89% 37.61% 5 276.90% % % 1
As we can clearly see, ICICI has been performing better than NIA in core
Insurance sectors like Health & Motor Insurance, whereas NIA is performing better
than the ICICI in the other sectors such as Fire, Marine & Accident. ICICI has been
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able to maintain a better claims ratio especially in Motor Insurance and the reason
for that being attributed to its careful exposure and its prudent underwriting
practices. Private players like ICICI who entered the segment much later unlike NIA
have the opportunity to learn from the inefficient practices of the public sector
companies and take corrective measures right from the inception.
ICICI has been able to perform better in Motor & Health sector because of its
high market share and a considerable premium base. In sectors like Fire, Marine &
accident, ICICI has a smaller premium base (unlike NIA) and hence it is going
through diseconomies of scale and hence its combined ratios in these segments are
lesser than that of the NIA which actually enjoys economies of scale in these
segments.
Another important observation is, NIA has better Expense ratios than ICICI in
all the above segments, the reason for this can be attributed again to the huge
premium base built up by the NIA over the many years of its existence. Because of
a bigger premium base, NIA is enjoying the economies of scale. Most of its fixed
cost like Advertising & promotion expenses has become a miniscule portion of the
premium it receives, but for ICICI which has a lesser premium base these expenses
still forms a major chunk. Also another reason for the ICICI’s high expense ratio is
most of the private players like ICICI are spending more money on its distribution
network and on Advertisements to increase their market share on a aggressive
mode, whereas public entities like NIA is not as aggressive like ICICI.
7) Prudent Investing
The only way most of the companies is showing profits in their book is through their
Investments. Most of the companies offset their underwriting losses with Investment
returns to show profit. Hence one can clearly see the imminent need for Insurers to
adopt prudent underwriting practices along with cost-efficient structures to stay
competitive and profitable.
The general insurance companies have to follow overall investment policy as

prescribed by IRDA (Insurance Regulatory body). IRDA guidelines require the
appreciation in Equity investments (vis-à-vis the acquisition cost) to be parked in a
separate Fair Value Change account, to be accounted in Profit and Loss account
only on realization. The Fair Value Change account is thus an indicator of the
additional realizable profits of the insurance companies.
Based on the Total Investments, Investment returns and Fair Value Change Account
of the leading insurers (Exhibit 10), the companies are rated as given below
Investment Grad
Company Returns e
ICICI Lombard 60.69 1
19 | P a g e
4
New India 4.57 5
Segment-Wise Relative Competitiveness

Based on the CSFs enumerated earlier ICICI Lombard and New India were graded to
determine the relative competency of one with respect to the other in each
segment. The weight given to each CSFs were separately determined for each
segment based on their relative importance.
The ratio of the ratings gives the competitiveness index, which is measure of
relative competitiveness. For example, if the competitiveness index of ICICI
Lombard with respect to New India is 1, it means that both are equally competitive.
A value less than 1 indicates that ICICI Lombard is less competitive than New India
and vice versa.
Fire
1) Maximum weight is assigned to client service (25%) as most of the customers are
big commercial establishments. Any shortcomings in service will result in losing a
large customer.
2) The strength of distribution network, especially corporate agents plays a major

role in increasing the number of clients (20%). The ability and liquidity to settle
claims is equally important as the claims are usually large (20%).
3) Almost all the other factors are of equal importance.
The final competitiveness of ICICI with respect to New India is 0.87. This means that
though ICICI is close to New India in this segment, it’s still lagging behind.
20 | P a g e
4
Company Competitiveness - Fire

Weig New ICICI
CSF hts India Lombard
Brand Image 10% 2 5
Client Service 25% 3 5
Strength of Distribution
Network 20% 4.1 2.6
Product Differentiation 10% 4 5
Claim Settlement 20% 5 1
Underwriting Performance 10% 5 4
Prudent Investment 5% 5 1
Grade 3.92 3.42
Relative Competitiveness : ICICI/New
India 0.87
Marine
1) Similar to Fire, Client Service is most important here (25%). The significance of
claim settlement ability is more in this segment due to larger claims (25%).
2) Compared to any other segment, product differentiation is least important in

Marine as there is not much scope for differentiation
3) All the other parameters are similar to fire
Based on the above analysis, we conclude that ICICI Lombard is lagging behind New
India Assurance by a big margin as indicated by the competitiveness index of 0.75.
Company Competitiveness - Marine

Weig New ICICI
Brand Image 10% 2 5
Network 20% 3.9 2.5
Grade 3.73 2.8
India 0.75
21 | P a g e
4
Motor
1) Since this sector is the most penetrated, distribution network is the predominant
factor (25%).
2) Client Service is not that important as there is only a small portion of corporate
customers (20%).
3) Since a majority of the customers are retail, brand value (15%) and product
differentiation (10%) are more significant in this segment compared to fire and
marine insurance.
4) The chances for fraud are higher and this justifies the higher weight for
underwriting performance (15%).
5) Claim settlement takes a back seat due to relatively small values of individual
claims (10%).
In motor, ICICI is slightly better than New India with a competitiveness index of 1.05
Company Competitiveness - Motor

Weig New ICICI
Brand Image 15% 2 5
Network 25% 4.35 2.65
Grade 3.4375 3.6125
India 1.05
Health
1) Health demand maximum product variety. The weight for Product differentiation
is large (20%)
2) The significance of client service (15%) and claim settlement (5%) ability falls
further due to larger share of retail customers.
The performance has reversed in this segment. ICICI Lombard is more competitive
with an incredible competitiveness index of 1.47
Company Competitiveness - Health
22 | P a g e
4
Weig New ICICI
Brand Image 15% 2 5
Network 25% 4.2 2.8
Grade 2.65 3.9
India 1.47
Accident
Accident is given same evaluation criterion as Health as there are not much
difference in the types of products offered and clients targeted.
The performance of ICICI is very close to that of New India with an index slightly less
than 1(0.97)
Company Competitiveness - Accident

Weig New ICICI
Brand Image 15% 2 5
Network 25% 4.2 2.8
Grade 3.55 3.45
India 0.97
23 | P a g e
4
Segment Portfolio Matrix

Segment portfolio matrix is a graphical tool that illustrates the relative
competitiveness of two companies in different segments of operation. It also tells
how well positioned a company is with respect to the attractiveness of segments.
The matrix is a 2-D framework with Relative Company Competitiveness along the
horizontal and segment attractiveness along the vertical axis. Each segment is
plotted on the framework on specific points. The horizontal location of the point is
determined by the competitiveness index of the two companies in each segment.
The segment attractiveness score give the vertical location. The area of the circle
representing each segment is an indication of its size.
A portfolio matrix is drawn based on the analysis segment attractiveness and

relative competitiveness of ICICI Lombard and New India as shown below.
Analysis of the Portfolio Matrix
24 | P a g e
4
Annexure 1: Answers to Queries on the Interim Report
1) You mentioned profitability, growth etc (p1, end) as segment attractiveness

criteria, do some brain storming and check if there are more criteria. Greater the
no. of relevant criteria, the more robust the segment attractiveness measure.
We have come up with the following new Segment Attractiveness criteria
a) Chances for fraud & Fraudulency check

b) Scope for product differentiation
c) Distribution channel
Also we have discussed with the Industry experts and financial professors of our
institute to validate our analysis for completeness.
1) Motor insurance claim losses are well known. Why does health make loss?
Health Insurance has been one of the less profitable sectors with claims
ratio in the range of 120–150%. The reason for this low profitability can be
attributed to
• High & varying treatment costs across providers due to limited
bargaining power
25 | P a g e
4
• Lack of standardization & accreditation in most healthcare facilities
leading to difficulty in judging the authenticity of procedures & costs
• Ease of Fraud and ineffective fraudulency check
• Insufficient data on Indian consumers & disease patterns resulting in
difficulty in product development & pricing.
1) Why are claims lower in fire? Fraudulent claims can be made up in any category
not just motor or health ?
• The frequency of risk occurrence is very low in Fire Insurance when

compared to other insurance like Motor or health.
• Since the claim amount of each fire policy is comparatively higher,

there is a robust fraudulency check in place. Filing fire insurance is not
an easy or stress-free task. When you get the claim process started,
the insurance company will send out a loss adjuster who will do a
thorough fraudulency check before giving his approval.
• There will also be a police investigation and other judicial procedures

and that creates a lot of overhead for both the insured and the
insurers.
1) Why is fire more profitable?
• Since most of the clients for fire insurance are corporates, the amount
insured was very high and the premium charged was also
proportionately high as against retail insurance like Health\Motor
where hefty premium cannot be charged.
• Since the claim amount is very high, majority of the claims were
Reinsured and hence major portion of the risk is ceded to the
Reinsurance company.
• Also as mentioned in the previous question, the # of claims will be

substantially lower in fire Insurance
1) What is detariffication? Why did this bring down fire’s market share in non-life?
Hasn’t de-tarrification happened in motor and health?
26 | P a g e
4
• Earlier the premium rates used to be tarrifed. IRDA had the cap on
premium amount which should be charged for each segment, so the
companies did not had any say on the premium rates. After de-
tarrification, companies were given freedom to choose their premium
rates with some minimum approval from IRDA.
• De-tarrification has happened in all critical segments like Fire, Motor &
Health. After De-tarrification, segments which were lucrative then like Fire
& Engineering had to reduce their premiums because of intense
competition between players.
• In segments like Health & Motor which were already in heavy losses,
companies in turn decided together to increase the premium rates to
minimize the losses, rather than decreasing the premium.
1) Given the competition (13 to 17 companies in each domain) do you see scope
for consolidation?
• Margins in the Non-life Insurance industries are very thinner and the
customer are more value conscious, so companies need the SCALE
inorder to remain competitive.
• As you could see from our report, New India Assurance is enjoying more
benefits than ICICI because of economies of scale.
• Given that there are more than 20 companies in the Non-Life Insurance
sector now, there’s huge potential for consolidation especially in the
private sector where the scale of many companies are very small.
• With respect to the public sector, since most of the companies are already
good in terms of scale, we see very little scope for consolidation.
1) P3, table 3 – why is the untapped potential so high in motor when it is

mandatory to take insurance for any vehicle bought. Can vehicles escape
insurance
Earlier we had put “high” on untapped potential because we have

considered the person who does not any vehicles into account. Now we
have classified that under growth rate and hence have changed the
untapped potential as “Low” for Motor Insurance.
27 | P a g e
4
2) Was the weightage given subjectively for the segment attractiveness criteria?
Then give a justification for each of the weights chosen.
We have come up with weightage after taking inputs from the professors
and the Industry experts. Also we had a detailed discussion within our
team after doing a comprehensive study from various web sources. The
justification for the weightage is given in the page11 of the report.
3) On the face of it fire seems to be very attractive. However your numbers say
that fire, health, motor have nearly the same attractiveness. Is there some
misjudgment or can you explain it?
Fire insurance seems to be attractive from a profitability perspective, but

when we take other criterias like Growth rate, Market penetration etc.,
Motor & health seems to have more potential than the fire segment.
4) P5 – You hv chosen 5 critical success factors (CSFs). It may be important to see if

there are more CSFs. You may want to talk to some experts in the market before
you take a view on this? Minimum talk to all finance faculty in IIMB.
We have come up with new CSFs after taking the inputs from Industry
experts and finance profs in IIMB .
5) P6, table 1 – when the csi number is high, the customers are more happy. Is
that how it is? Also how wide is the range of CSI? Ranging between 754 and 772.
Is there significant difference between the top and bottom CSI levels? Does the
customer really see much difference between the two? If not then how does one
build a brand in this segment?
Yes! Customers are happy with the policy when the CSI index is high.
Industry average of CSI index is 760. In our analysis we rated 760 as 3
and highest CSI value as 5.
6) P6 – in all tables if the rating in the last column is higher is it better for the
company?
28 | P a g e
4
Yes the higher the value in the last column, it is better for the company.
7) Given that ICICI is seen as aggressive how come their agents are much fewer in
number than the PSU co.s?
– ICICI’s main source of selling is through corporate agents like Banks (ICICI
Bank etc), whereas if we take public sector companies like New India
Assurance, the majority of their focus in on the Agents (Individual).
1) Greater the number of policies, greater the innovation – is this claim

sustainable? Greater no. of policies can be sold bcos of strong selling. Does it
necessarily show greater policy smartness?
We apologize for the confusion, there was a wording issue. Its not
“Policies” it is “Products”. We mean to say “Greater the number of
products (different variants of Insurance), the greater the innovation”.
2) P7, table 2 – can we say that quality of underwriting is directly related to

controlling claims? The point is only genuine claims shd be entertained. Fraud
shd be detected. Is the claim ratio really a good measure for this? A low claim
ratio merely means less claims have been admitted and not necessarily better
claims (am I right?)
• Eventhough quality of underwriting is not the only factor for controlling

claims, but definitely it’s a very important factor. For eg: in Health
Insurance the more analysis the underwriter do by studying the disease or
risk patterns, and consider that in product development and pricing, there
will be a better control on the claims ratio.
• Ideally as a industry standard to measure Underwriter efficiency, a ratio

called “Combined Ratio” is being used. We have used that ratio in the
revised report.
29 | P a g e
Exhibit 1
30 | P a g e
Segment-Wise Change in Market Share from 2006-07 to 2008-09
Fire
2008-09 2007-08 2006-07
Year Premiu Market Premiu Market Premiu Market
Name m Share Name m Share Name m Share
Company
1 New India 774.67 22.65 New India 743.42 21.74 New India 909.98 26.61
Company United United
2 India 572.79 16.75 United India 524.3 15.33 India 674.77 19.73
Company
3 Oriental 436.51 12.76 Oriental 499.72 14.61 Oriental 538.5 15.75
Company
4 National 397.08 11.61 ICICI 438.25 12.81 National 491.21 14.36
Total 3420.04 63.77 3516.8 64.49 4163 76.45
Change in share Change in share 2008-
0.72 11.95 Total Change 12.67
2008-2009 2009
Marine
2008-09 2007-08 2006-07
Company
1 New India 446.34 22.42 New India 437.28 26.76 Oriental 349.78 19.05
Company
2 United 336.93 16.93 Oriental 343.54 21.03 New India 321.03 17.49
Company
3 Oriental 332.53 16.70 United 300.83 18.41 United 264.34 14.40
Company
4 ICICI 223.85 11.24 ICICI 224.55 13.74 National 196.97 10.73
Total 1990.7 67.30 1633.81 79.95 1835.72 61.67
Change in share Change in share 2008-
2008-2009 12.65 2009 18.28 Total Change 30.93
Motor
2008-09 2007-08 2006-07
Company
1
31 | P a g e National 2137.9 15.89 National 2143.69 16.74 New India 2034.73 19.05
Exhibit 2
Customer Voice - Customer Satisfaction Rating of Health Insurance Companies
Name of the TP Tangibil Problem Reliabili Responsiven Assuran Empat Overall Ratin
Company A ity Solving ty ess ce hy Rank g
TATA AIG 2 2 1 1 1 1 1 1 5
HDFC Chubb 2 1 1 2 2 2 2 2 5
Bajaj Allianz 2 1 1 2 2 2 2 2 5
ICICI Lombard 2 1 1 2 2 2 2 2 5
IFFCO Tokio 2 1 1 2 2 2 2 2 5
Royal Sundaram 6 4 9 11 4 4 8 6 3
Oriental Insurance 10 8 6 4 7 9 7 7 2
Cholamandalam 5 10 7 10 8 7 6 8 2
New India Assurance 11 11 8 7 9 10 9 9 1
United India
Insurance 8 9 11 9 10 8 10 10 1
National Insurance 9 7 10 8 11 11 11 11 0
Exhibit 3
J D Power Customer Satisfaction
Index
CS Ratin
Company I g
77
ICICI Lombard 5 5
32 | P a g e
77
Oriental 2 5
76
National Insurance 4 3
76
New India 3 3
76
Bajaj Allianz 2 3
76
Industry Average 1 3
76
TATA AIG 0 3
75
United India 5 2
75
Reliance 4 2
74
HDFC Ergo 7 1
74
Royal Sundaram 4 1
33 | P a g e
4
Exhibit 4
ICICI Lombard Product Differentiation/Innovation

Segment Fire Health Motor Marine Accident
Car Insurance 
Commercial Vehicle Insurance 
Consequential Loss(Fire) Insurance 
Corporate Cover   
Corporate Overseas Travel 
Corporate Overseas Travel - Gold Plan 
Corporate Overseas Travel - Silver Plan 
Critical Care Insurance 
Domestic Travel  
Educational Institution Package Policy   
Erection All Risk 
Farmer’s Package 
Fire and Special Perils Policy 
Group Health / Group Health (Floater) Covers 
Group Mediclaim Insurance Policy 
Group Personal Accident 
Health Advantage Plus Insurance 
Home Insurance 
Home Safe + Insurance 
Hotel Corporate Cover  
Individual Overseas Travel Insurance - Gold Plan  
Individual Overseas Travel Insurance - Platinum
 
Plan
Industrial All Risk 
Janata Personal Accident 
Malls and Multiplex Policy  
Marine Export Tansit Insurance Policy 
Marine Hull 
Marine Import Transit Insurance Policy 
Marine Inland Transit Insurance Policy 
Office Package Policy   
Parents' Health 
Petrol Station Package Policy  
Public Liability Act Only - Gold Plan 
Public Liability Act Only - Silver Plan 
Public Liability Insurance (Industrial Risks) 
Public Liability Insurance (Non-Industrial Risks) 
Rural Health Insurance 
Rural Home Insurance 
Senior Citizen Overseas Travel - Gold Plan  
Senior Citizen Overseas Travel - Muti-trip Plan  
Senior Citizen Overseas Travel - Platinum Plan  
Shop Insurance - Health Cash Plan   
Shop Insurance - Health Double Benefit Plan   
Shop Insurance - Health Family Floater Plan   
Shop Insurance - Medical Expenses Insured   
Student Medical Plans - Bronze Plan 
Student Medical Plans - Gold Plan 
Student Medical Plans - Plus Plan 
Student Overseas Travel - Bronze 
Student Overseas Travel - Gold  
Tractor   
Two Wheeler Insurance 
Total 18 28 4 4 24
34 | P a g e
4
Exhibit 5
New India Assurance Product Differentiation/Innovation
Healt Marin Acciden
Segment Fire Motor
h e t
Aviation Personal Accident (crew member)

Insurance
Bankers Indemnity Policy 
Bhagyashree Child Welfare Policy 
Birthright Insurance Policy 
Contractors All Risk Policy 
Family Package cover 
Fire Policy 
Golfers Indemnity Insurance Policy 
Gramin Personal Accident Policy 
Group personal 
Gun Insurance 
Householders Policy  
Jan Arogya Bima Policy 
Janata Personal Accident policy 
Jewellers Block Policy 
Lift (Third Party) Insurance 
Marine Cargo Policy 
Marine cum Erection Policy 
Marine Hull Policy 
Motor Policy 
Multi Peril Policy for L.P.G. Dealers  
Neon Sign Insurance 
Passenger Flight Coupon 
Personal Accident Policy 
Pravasi Bhartiya Bima Yojana Policy  
Product Liability Policy 
Public Liability Policy 
Raj Rajeshwari Mahila Kalyan Yojna 
Rasta Apatti Kavach 
Shopkeepers Policy  
Special Contigency Policy 
Student Safety Insurance 
Universal Health Insurance Scheme 
Total 10 4 1 3 19
Exhibit 6
Agent Distribution Channel
Gra Corporate Grad
Individual Agents
Life Insurers de Agents3 e2
New India 9346 5 16 4
National 8865 4 13 3
United India 7165 4 38 5
Oriental 10215 5 8 2
ICICI-Lombard 1170 3 5 1
Bajaj Allianz 1718 3 7 2
Tata-AIG 337 2 10 3
35 | P a g e
4
Reliance 168 1 1 1
Exhibit 7
Business Today Rating
Image Gra
Company Score de
ICICI Lombard 11538 5
Bajaj Allianz 8227 4
Oriental
Insurance 8008 3
National
Insurance 6489 3
HDFC Chubb 6177 3
United India 5223 2
New India 4860 2
TATA AIG 3634 1
Reliance 3015 1
IFFCO Tokio 2635 1
Exhibit 8
Solvency Ratio (As On 31st
March 2008)
Solvency Gra
Company Ratio de
Bajaj Allianz 1.55 1
Cholamandal
am 1.89 2
HDFC Chubb 2.02 2
ICICI
Lombard 2.03 2
IFFCO Tokio 1.51 1
Reliance 1.64 1
Royal
Sundaram 1.59 1
Tata AIG 1.91 2
Future
Gererali 2.61 3
New India 4 5
United 3.24 4
Oriental 1.91 2
National 1.8 1
36 | P a g e
4
Exhibit 9
Combined Ratio
2009- 2008- 2007- Avera
Company 08 07 06 ge
Health
New India 141.06 127.08 284.95 184.37
Assurance % % % %
125.73 149.88 174.34 149.99
ICICI Lombard % % % %
Fire
New India 103.21 93.26 101.94 99.47
Assurance % % % %
170.71 154.37 156.78 160.62
Marine
New India 172.16 140.36 88.69 133.74
Assurance % % % %
386.87 430.24 370.64 395.92
Motor
New India 167.53 138.75 123.29 143.19
Assurance % % % %
118.81 109.80 113.82 114.14
Accident
New India 131.74 82.13 141.63 118.50
Assurance % % % %
373.61 191.58 265.52 276.90
Exhibit 10
37 | P a g e
4
Return of Investments as on 31st March 2008
Income
from Fair Value Total Return
Investme Investmen Change Returns on
nts (in ts (in Account (in (in investme Grad
Company lakhs) lakhs) lakhs) lakhs) nts (%) e
Royal
Sundaram 55903 1305.3 -96 1209.3 2.51 1
Bajaj Allianz 186323 4763.33 -253 4510.33 2.69 1
Tata AIG 68192 1934.7 265 2199.7 3.23 1
Reliance 131073 3643.71 -982 2661.71 3.53 1
IFFCO 54297 2198.68 0 2198.68 4.05 1
ICICI
Lombard 237376 9070.71 -1787 7283.71 4.57 1
Cholamandal
am 32999 803.97 -252 551.97 3.20 1
HDFC Chubb 22130 635.21 29 664.21 3.00 1
Future Gen. 11082 551.9 3 554.9 5.00 1
New India 2463287 99122 1395927 1495049 60.69 5
795712.
Oriental 1316751 34228.25 761484 25 60.43 5
758312.
National 1271798 27382.63 730930 63 59.63 5
558853.
United India 1240363 55110.43 503743 43 45.06 4
38 | P a g e
4
39 | P a g e
1 http://www.livemint.com/2009/04/01221819/Heavy-discounts-on-fire-engin.html
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Group 4: Portfolio Analysis of ICICI Lombard and New India Assurance

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Group 4: Portfolio Analysis of ICICI Lombard and New India Assurance

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Indian Institute of Management Bangalore

We sincerely acknowledge our gratitude to Kalluri Raghuram, Prof. G

Public Sector: National Insurance Company Limited, Oriental Insurance Limited,

These companies offer products in various segments like

We have divided our study in three parts:

1) Segment Analysis – Analyze the attractiveness of different segments in the

2) Company Competitiveness Analysis – Study and analysis of different

3) Portfolio matrix – Segment Portfolio matrix is a 2D Framework which tries

Incurred Claims ratio

Growth Rate in Premium Underwritten

Active competition, improvement in distribution and increasing awareness of the

Number of insurance providers is a good indication of the level of competition.

The result of this analysis is summarized in table below.

Competition Intensity-Absolute Change in

Market Share in 2007-08

Based on the above analysis the segments are rated as follows

6) Chances for Fraud

The segments are rated based on two factors

Type of Ease of Robustness of Ratin

7) Scope for Product Differentiation

Segment-Wise Distinctiveness of Distribution Channel

Though health and accident appears to most attractive based on distribution

Final Segment Attractiveness Ratings

1) Profitability is assessed as the most predominant factor in determining the

Critical Success Factors

a) A major share of the income is through policy renewal. An unsatisfied customer

Customer service is of extreme significance for insurance especially because

Health and Accident Insurance

Fire and Marine Insurance

Heal Mot Accid Mari

4) Internet & Telemarketing: ICICI has well-developed online distribution

Healt Marin Accide

Moto Healt Marin Accide

5) Claim Settlement Ability

Company Solvency Claim

Combined Ratio = (Net Incurred Claims + Operation Expenses +

Underwriting performance in the industry has been under increasing

New India ICICI

The general insurance companies have to follow overall investment policy as

New India 4.57 5

Segment-Wise Relative Competitiveness

2) The strength of distribution network, especially corporate agents plays a major

3) Almost all the other factors are of equal importance.

Company Competitiveness - Fire

2) Compared to any other segment, product differentiation is least important in

3) All the other parameters are similar to fire

Company Competitiveness - Marine

Company Competitiveness - Motor

Company Competitiveness - Health

Company Competitiveness - Accident

Segment Portfolio Matrix

A portfolio matrix is drawn based on the analysis segment attractiveness and

Analysis of the Portfolio Matrix

Annexure 1: Answers to Queries on the Interim Report

1) You mentioned profitability, growth etc (p1, end) as segment attractiveness

We have come up with the following new Segment Attractiveness criteria

a) Chances for fraud & Fraudulency check

• The frequency of risk occurrence is very low in Fire Insurance when

• Since the claim amount of each fire policy is comparatively higher,

• There will also be a police investigation and other judicial procedures

1) Why is fire more profitable?

• Also as mentioned in the previous question, the # of claims will be