MIRA
INFORM REPORT
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Report Date : |
24.08.2011 |
IDENTIFICATION DETAILS
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Name : |
ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED |
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Registered
Office : |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of Incorporation
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30.10.2000 |
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Com. Reg. No.: |
11-129408 |
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Capital
Investment / Paid-up Capital : |
Rs.4045.672
millions |
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CIN No.: [Company Identification
No.] |
U67200MH2000PLC129408 |
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TAN No.: [Tax Deduction & Collection
Account No.] |
MUMI03974F |
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Legal Form : |
A Closely Held Public Limited Liability Company |
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Line of Business
: |
Providing Insurance Services. |
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No. of Employees
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4264 (Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
A (57) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 77760000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a Joint Venture between ICICI Bank Limited, The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
INFORMATION PARTED BY
Management non-cooperative
LOCATIONS
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Registered Office : |
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Tel. No.: |
91-22-26531414 |
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Fax No.: |
91-22-26531230 |
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E-Mail : |
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Website : |
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Corporate Office : |
Zenith House Keshav Rao, Khadye Marg, 2nd Floor, Opposite
Race Course, Mahalaxmi, Mumbai – 400 034, |
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Tel. No.: |
91-22-24906999 |
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E-Mail : |
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Mailing Address : |
ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400
025, |
DIRECTORS
As on 31.03.2011
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Name : |
Chanda Kochhar |
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Designation : |
Chairperson |
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Name : |
R. Athappan |
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Designation : |
Director |
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Name : |
Sandeep Bakhshi |
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Designation : |
Director (upto July 31, 2010) |
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Name : |
B.V. Bhargava |
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Designation : |
Director |
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Name : |
Dileep Choksi |
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Designation : |
Director |
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Name : |
Zarin Daruwala |
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Designation : |
Director (w.e.f. October 18, 2010) |
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Name : |
N.S. Kannan |
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Designation : |
Director |
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Name : |
S. Mukherji |
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Designation : |
Director |
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Name : |
Chandran Ratnaswami |
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Designation : |
Director |
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Name : |
M.K. Sharma |
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Designation : |
Director |
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Name : |
H. N. Sinor |
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Designation : |
Director |
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Name : |
Bhargav Dasgupta |
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Designation : |
Managing Director and Chief Executive Officer |
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Name : |
Alok Kumar Agarwal |
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Designation : |
Executive Director (w.e.f. January 19, 2011) |
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Name : |
Neelesh Garg |
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Designation : |
Executive Director (w.e.f. January 19, 2011) |
KEY EXECUTIVES
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Name : |
Vikas Mehra |
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Designation : |
Company
Secretary |
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Board Governance
Committee : |
v M.K. Sharma (Chairman) v Chanda Kochhar v Sandeep Bakhshi (upto July 31, 2010) v Chandran Ratnaswami v
H. N. Sinor |
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Investment
Committee : |
v Chandran Ratnaswami (Chairman) v Sandeep Bakhshi (upto July 31, 2010) v N.S. Kannan (Director) v Bhargav Dasgupta v Liyaquat Khan v
Appointed Actuary v S. Gopalakrishnan v
Rakesh Jain |
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Audit Committee
: |
v Dileep Choksi (Chairman) v R. Athappan v S. Mukherji v
H. N. Sinor |
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Risk Management
Committee : |
v S. Mukherji (Chairman) v R. Athappan v H. N. Sinor v
Bhargav Dasgupta |
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Policyholder Protection
Committee : |
v M.K. Sharma (Chairman) v S. Mukherji v Chandran Ratnaswami v
Bhargav Dasgupta |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2011
|
Category of Shareholders |
No. of Shares |
Percentage of Holding |
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Promoters |
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- Indian |
297552950 |
73.55% |
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- Foreign |
104544940 |
25.84% |
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Others - Employees |
2469340 |
0.61% |
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Total |
404567230 |
100.00% |
BUSINESS DETAILS
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Line of Business : |
Providing Insurance Services. |
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Services : |
General Insurance |
GENERAL INFORMATION
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No. of Employees : |
4264 (Approximately) |
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Bankers : |
ICICI Bank Limited |
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Banking
Relations : |
-- |
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Auditors : |
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Name 1 : |
N.M. Raiji and Company Chartered Accountants |
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Name 2 : |
PKF Sridhar and Santhanam Chartered Accountants |
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Holding Company
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v
ICICI Bank Limited |
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Fellow Subsidiaries/ Associates/ Other related
entities: |
v
ICICI Bank UK PLC v
ICICI Home Finance Company Limited v
ICICI Prudential Asset Management Company Limited v
ICICI Prudential Life Insurance Company Limited v
ICICI Securities Limited v
ICICI Securities Primary Dealership Limited v
ICICI Venture Funds Management Company Limited v
FAL Corporation (Affiliate of v
ICICI Foundation for Inclusive Growth v
Loyalty Solutions and Research Limited (upto
March 31, 2010) v
Transafe Services Limited (upto June 30, 2009) |
CAPITAL STRUCTURE
As on 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
450000000 |
Equity Shares |
Rs.10/- each |
Rs.4500.000 millions |
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Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
|
404567230 |
Equity Shares |
Rs.10/- each |
Rs.4045.672
millions |
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FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
4045.672 |
4036.327 |
4031.369 |
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2] Share Application Money (Pending Allotment) |
3402.304 |
1.870 |
0.176 |
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3] Reserves & Surplus |
11262.593 |
12694.906 |
11995.095 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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5] Fair value change account |
729.314 |
1191.293 |
(743.219) |
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NETWORTH |
19439.883 |
17924.396 |
15283.421 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
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TOTAL BORROWING |
0.000 |
0.000 |
0.000 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
19439.883 |
17924.396 |
15283.421 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
3881.266 |
1433.378 |
1567.691 |
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Capital work-in-progress |
0.000 |
0.000 |
0.000 |
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INVESTMENT |
46652.974 |
37605.728 |
30307.422 |
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DEFERRED TAX ASSETS |
472.868 |
452.876 |
596.650 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
0.000
|
0.000
|
0.000
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Sundry Debtors |
0.000
|
0.000
|
0.000
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Cash & Bank Balances |
3900.055
|
503.447
|
730.475
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Other Current Assets |
25948.950
|
26257.374
|
20953.870
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Loans & Advances |
1430.752
|
1067.365
|
685.918
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Total
Current Assets |
31279.757
|
27828.186 |
22370.263 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Sundry Creditors |
1801.418 |
1423.852 |
1367.441 |
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Other Current Liabilities |
46614.085
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35312.528
|
26617.015
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Provisions |
14431.479
|
12659.392
|
11574.149
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Total
Current Liabilities |
62846.982
|
49395.772
|
39558.605 |
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Net Current Assets |
(31567.225)
|
(21567.586)
|
(17188.342)
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
19439.883 |
17924.396 |
15283.421 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
1. Operating profit/(loss) |
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(a) Fire
Insurance |
(270.698) |
51.145 |
(230.096) |
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(b) Marine
Insurance |
(222.018) |
52.525 |
(573.997) |
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(c)
Miscellaneous Insurance |
(1313.590) |
47.850 |
(73.542) |
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2. Income from
investments |
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(a) Interest
/Dividend & Rent – Gross |
915.583 |
783.696 |
814.092 |
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(b) Profit on
sale/redemption of investments |
452.785 |
858.855 |
645.211 |
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Less : loss on
sale/redemption of investments |
(20.401) |
(95.566) |
(127.195) |
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3. Other income |
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(a) Interest
income on tax refund |
13.410 |
0.000 |
0.000 |
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(b) Profit on
sale/discard of fixed assets |
11.399 |
2.422 |
0.098 |
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Total (A) |
(433.530) |
1700.927 |
454.571 |
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4. Provisions
(Other than taxation) |
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(a) For
diminution in the value of investments |
0.000 |
0.000 |
435.226 |
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(b) For doubtful
debts |
270.369 |
30.670 |
0.000 |
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(c) Others |
0.000 |
0.000 |
0.000 |
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5. Other
expenses |
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a) Expenses
other than those related to Insurance Business |
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(i) Employees’
remuneration and benefits |
11.615 |
6.345 |
5.748 |
|
(ii) Managerial
remuneration |
1.206 |
0.000 |
0.000 |
|
(iii) Directors’
fees |
0.740 |
0.640 |
0.480 |
|
(b) Bad debts
written off |
25.000 |
0.000 |
0.000 |
|
(c) Loss on
sale/discard of fixed assets |
80.960 |
80.219 |
10.372 |
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Total (B) |
389.890 |
117.874 |
451.826 |
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Profit / (Loss)
before tax |
(823.420) |
1583.053 |
2.745 |
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Provision for
taxation: |
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|
(a) Current tax
/MAT payable |
0.000 |
227.180 |
0.000 |
|
Tax for earlier
year- MAT |
0.000 |
28.794 |
0.000 |
|
Less : MAT
credit entitlement |
0.000 |
(255.974) |
0.000 |
|
(b) Deferred tax
(Income) / Expense |
(19.992) |
143.774 |
(298.500) |
|
(c) Fringe
benefit tax |
0.000 |
0.000 |
65.000 |
|
Profit / (Loss)
after tax |
(803.428) |
1439.279 |
236.245 |
|
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|
|
|
|
Appropriations |
|
|
|
|
(a) Interim
dividends paid during the year |
565.889 |
645.248 |
0.000 |
|
(b) Proposed
final dividend |
0.000 |
0.000 |
0.000 |
|
(c) Dividend
distribution tax |
93.994 |
109.660 |
0.000 |
|
(d) Transfer to
General Reserves |
105.190 |
107.946 |
0.000 |
|
|
765.073 |
862.854 |
0.000 |
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Balance of Profit / (Loss) brought forward from
last year |
1745.040 |
1168.615 |
932.370 |
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|
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Balance carried forward to Balance sheet |
176.539 |
1745.040 |
1168.615 |
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Earning Per Share (Rs.) |
|
|
|
|
- Basic |
(1.99) |
3.57 |
0.60 |
|
- Diluted |
(1.99) |
3.51 |
0.59 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(2.34)
|
5.41 |
0.01 |
|
|
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Return on Investment (ROI) (PBT/Networth) |
|
(0.04)
|
0.09 |
0.00 |
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|
Debt Equity Ratio (Total Liability/Networth) |
|
3.23
|
2.76 |
2.59 |
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|
Current Ratio (Current Asset/Current Liability) |
|
0.50
|
0.56 |
0.57 |
LOCAL AGENCY FURTHER INFORMATION
Details of Sundry Creditors:
|
Particulars |
31.03.2011 (Rs. in millions) |
31.03.2010 (Rs. in millions) |
31.03.2009 (Rs. in millions) |
|
Sundry Creditors |
1801.418 |
1423.852 |
1367.441 |
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BACKGROUND
The Company was
incorporated on October 30, 2000 and is a 74:26 joint venture between ICICI Bank
Limited and Fairfax Financial Holdings Limited. The Company obtained regulatory
approval to undertake General Insurance business on August 3, 2001 from the
Insurance Regulatory and Development Authority (‘IRDA’) and has also obtained
its certificate of renewal of registration.
INDUSTRY OVERVIEW
The gross premium of the industry for the period April 2010 – March 2011
grew from Rs.360.60 billion to Rs.441.26 billion on a year-on-year basis, a growth
of about 22.4%. The market share of private sector insurance companies during
this period has been stable as compared to the corresponding period of the
previous year. ICICI Lombard led the private players with a market share of
24.2% in the private sector and an overall industry market share of 9.6%.
Insurance Regulatory and Development Authority (IRDA) vide its order
dated March 12, 2011 had instructed all general insurance companies to
provisionally provide for pool losses at 153% loss ratio for FY2008, FY2009,
FY2010 and FY2011. Accordingly, ICICI Lombard has provided additionally Rs.2.72
billion in FY2011 towards third party pool reserves.
WHISTLE BLOWER
POLICY
ICICI Lombard has a whistle blower policy which is designed to provide
its employees, a channel for communicating instances of breach in the code of
conduct, legal violation, actual or suspected fraud and other irregularities.
The framework of the policy strives to foster responsible and secure whistle
blowing.
REGISTRATION
The certificate of registration of ICICI Lombard has been renewed by
IRDA for FY2012.
CAPITAL
IRDA had conducted a study of adequacy of reserves maintained by the
Indian Motor Third Party Insurance Pool (IMTPIP or ‘’the pool’’) constituted
for the purpose of insuring the third party risks for commercial vehicles. IRDA
vide its order dated March 12, 2011 had instructed all general insurance
companies to provisionally provide for pool losses at 153% loss ratio for all
years beginning from FY2008.
ICICI Lombard required an additional capital infusion of Rs.3.40 billion
by March 31, 2011 in order to maintain minimum solvency ratio of 150% on an
overall basis after providing for the said losses at 153%.
ICICI Lombard had raised this capital through private placement aggregating
to Rs.3.40 billion, including premium of Rs.3.09 billion, which was subscribed
by its promoters – ICICI Bank Limited and Fairfax Financial Holdings Limited
through their affiliate FAL Corporation.
The total capital invested by shareholders till March 31, 2011 including
share premium, was Rs.18.21 billion. The net worth of ICICI Lombard stood at
Rs.18.71 billion at March 31, 2011 as compared to Rs.16.73 billion at March 31,
2010. The solvency position of ICICI Lombard at March 31, 2011 was 1.56.
General Insurance
Sector Overview
The General Insurance industry marked the completion of ten years of its
existence since opening up of the sector to private players in fiscal 2011. The
year was a defining era for regulatory changes and industry turnaround with the
fourth year of the de-tarrifed regime of flexible pricing for the industry.
Following the international trend of de-tarrification, price stabilisation
trickled in certain segments of the business and the nonlife
insurance industry commenced recovery, in its fourth year. The year
2010–2011 simultaneously witnessed an economic upswing with an improved world
economy and a growing Indian economy in particular. In the backdrop of economic
growth coupled with the price correction, the overall Indian insurance industry
grew in excess of 20% resurging to the pre-detariffed levels in the last
fiscal.
Driven by robust domestic consumption, investment demand and rise in
insurance needs the gross written premium (GWP) of the general insurance
industry grew from Rs.360.60 billion to Rs.441.26 billion on a year-on-year
basis for the period of April 2010 – March 2011. The general insurance industry
recorded a growth of about 22.4% and capitalising on the opportunity to grow,
ICICI Lombard led the private players with a market share of 24.2% in the
private sector and an overall market share of 9.6 %.
During the year, the Health Insurance segment propelled growth in
general insurance sector with retail penetration increasing with the
government’s focus on the implementation of mass health schemes across the
country adhering to its roadmap for financial inclusion. Health insurance
business this year grew from Rs.83.1 billion to Rs.111.4 billion (including
specialised health institutions) last year. Similarly, in the backdrop of
increased new car and two-wheeler sales, Motor Insurance business increased
from Rs.152.28 billion to Rs.181.6 billion in fiscal 2010. Motor and health
insurance segments lead the general insurance market by contributing the largest
share, followed by the Corporate segment. Property segments comprising fire and
engineering registered GWP of Rs.65.62 billion.
During the year, the Insurance Regulator IRDA had vide its order dated
March 12, 2011 brought about certain regulatory changes the most prominent of
which was in the provisioning requirement for the Third Party Commercial
Vehicles motor pool at not less than 153% loss ratio, since inception of the
pool i.e. FY 2007-08. The results of the pool were shared amongst all companies
based on the overall market share of each company. The earlier loss ratio
estimated for the reserves was between 122% to 127% for FY 2007-2008 to FY
2009-2010. By virtue of the above order, ICICI Lombard created additional
provisions of Rs.2.72 billion in FY 2010-2011. Further, IRDA in its order has
indicated to carry peer review of reserve requirement suggested by an
independent consultant actuary, the report of which is likely to be available
by Q1 2011-2012. In the meantime, the premium rates for Motor Third Party
Liability coverage of commercial vehicles has been increased by IRDA by 68.5%
on a prospective basis effective April 25, 2011.
Prominent
Regulatory Developments during fiscal 2011
The Insurance Regulator IRDA has issued various circulars and guidelines
for Fiscal 2011 some of which are as follows:
Annual on-site
inspection of all the Corporate Agents: In June 2010, IRDA issued guidelines for
all insurance companies, which required them to conduct an annual onsite
inspection of their Corporate Agents and submit the inspection report to IRDA.
Sharing of
database: In July 2010, IRDA issued a new regulation namely IRDA (Sharing of
database for distribution of Insurance Products) Regulations, 2010. The
Regulation prescribes that insurance companies can enter into an agreement for
sharing of the database with only those companies which fulfil the criterion
laid down under the guidelines.
Credit Insurance: In September
2010, IRDA by its circular directed all general insurance companies to
discontinue selling credit insurance policies to Banks and Financial
Institutions. This was followed by second circular in November 2010 to
discontinue the credit insurance business completely, till detailed guidelines
were issued. In December 2010, the Regulator issued guidelines with a view to
enhance the underwriting standards, risk mitigation practices and
standardisation of credit insurance product. The guidelines define standard
terminology and lay down standard procedures to be followed by all insurers in
their risk selection and assessment, client servicing, claim management and
creation of reserves and reinsurance administration.
Outsourcing: In February 2011,
IRDA issued detailed guidelines for insurance companies on outsourcing of activities.
These guidelines reiterate that the core activities related to insurance
business are performed in-house by insurers and permits outsourcing of non-core
activities. The directive is expected to enhance focus on core areas of
competence and outsource noncore areas to specialised agencies/entities for
effective services.
Portability of
Health Insurance Policies: In February 2011, IRDA issued guidelines on
portability of health insurance policies. The guidelines require general
insurance companies to allow for credit gained by an insured for pre-existing
diseases in terms of waiting period, in the event of a customer opting to
switch or change plan from one insurer to other. This decision is expected to
enhance flexibility of the customers in selecting insurance companies.
Third Party
Commercial Vehicle Motor Pool: In March 2011, IRDA directed all the general
insurance companies that the Motor Third Party Pool Reserve has to be
significantly augmented in order to meet the higher compensation to be paid to
the victims of road accidents. The Regulator therefore, requires the general
insurance companies to increase their reserves in a phased manner over a period
of three (3) years and till the reserves are augmented to a satisfactory level.
Augmenting of such reserves will strengthen the insurance companies and will
enable them to meet all the claim obligations expeditiously.
ORGANISATION
STRUCTURE
ICICI Lombard’s operating structure is designed from a customer
viewpoint. ICICI Lombard has four segments: Corporate Solutions Group,
Financial Inclusion Solutions Group, Retail and Shared Services.
The Corporate Solutions Group concentrates on large conglomerates, small
and medium enterprises, state and central governments and government-owned
enterprises. Its product portfolio comprises fire, marine, engineering,
liability solutions, employee group insurance schemes and large-scale health
and personal accident covers. The Financial Inclusion Solutions Group segment
provides insurance solutions to rural customers with weather, cattle, health
and personal accident covers as its key product segments. The Retail segment
caters to individual customers using various channels encompassing agents,
brokers, bancassurance, tele-sales, direct alliances, worksites and Internet.
Its product portfolio consists primarily of health, home, motor, travel and
personal accident. The Shared Services segment pursues opportunities to better
serve the business verticals. This group consists of underwriting, customer
service, technology, operations, reinsurance, broking, finance and accounts,
human resources, legal, marketing, administration and fraud control.
CORPORATE
SOLUTIONS GROUP
The Corporate Solutions Group (CSG) caters to the general insurance
needs of corporate bodies both in the private and government space. It also
provides coverage for international risks of Indian interests through its arm
called the International Business Group (IBG). The small and medium enterprise
sector, which is a booming segment in the economy, is the prime focus area of
the Small and Medium Enterprises Group (SME). The Financial Institutions Group
(FIG) continues to meet the typical risk management needs of the Financial
Services sector.
Driven by a buoyant economy, the wholesale market grew by a healthy 18%
in the Financial Year 2010-2011. ICICI Lombard outpaced the industry with a
growth of 19% in the wholesale space. The market share in Corporate Products
(which includes Fire, Engineering, Marine Cargo, Aviation, Health, Personal
Accident and Liability class of business) grew from 9.5% in FY 2009-2010 to
9.8% in FY 2010-2011.
The growth in business was achieved through strategic portfolio buildup
with a zero compromise mindset on quality of the underwriting book. While
existing relationships were strengthened, new business development on preferred
segments was a key performance indicator. Strong risk management solutions,
better turn around times for customers and renewed focus on knowledge
management supported the quality growth in the corporate segment.
In the Corporate Health space, the growth has been significant. The
conscious effort of building up of a quality book in Corporate Health has led
to improved loss ratios. In the loss making large groups, the approach was, and
continues to remain selective. The growth came mainly from the small group
segments where the loss ratios are significantly lower.
The company has increased its market share in Marine Cargo from 6.5% in
FY 2009-2010 to 7.2 % in FY 2010-2011. Engineering portfolio witnessed a dip,
but in the profitable segment of this portfolio, the position was strengthened.
ICICI Lombard increased its presence in the preferred and most preferred
segments from 72% to 90% in the current year.
Growth in Aviation business was another major success story of the year.
ICICI Lombard is the leader in the aviation policy of the country’s national
carrier Air
in its continued emphasis on knowledge.
The emphasis of the International Business Group was to develop
capabilities round the globe with an enhanced focus on less volatile markets.
Significant growth was achieved in all markets.
The Small and Medium Enterprises Group grew in all quality parameters
across all channels and product lines. Structured focus on Agency initiatives
has yielded results in terms of better agency activation and increased
productivity.
Enhanced focus on bancassurance relationships, continuous drive of
agency initiatives, conscious effort on over the counter (OTC) segment and
penetration into the low-end Brokers would result in higher manpower
productivity and better product mix.
The Financial Institutions Group’s focus on increasing the proportion of
Card and Liability business has helped in portfolio diversification.
FINANCIAL
INCLUSION SOLUTIONS GROUP
The Financial Inclusion Solutions Group (FISG) at ICICI Lombard focuses
on providing insurance solutions for government welfare initiatives primarily
in the rural areas of the country. FISG works closely with the Government to
deliver insurance solutions to economically disadvantaged beneficiaries.
The focus on financial inclusion in
A World Bank update in 2002 estimated that one episode of
hospitalization accounts for 58% of per capita annual expenditure pushing 2.2%
of the population below the poverty line. Insurance companies partnering
various government-funded and community programs, engineer customised products
for the rural poor that cover surgeries, critical illness, hospitalisation and
personal accidents. The premium payable is very nominal and is subsidised by
the state and central Government. Innovations like cashless claims and
out-patient department (OPD) reimbursement helps insulate rural beneficiaries
from their prevalent challenge of permanent poverty and cycle of indebtedness.
Rashtriya Swasthya
Bima Yojana
A shining example of how the government can help insurance touch lives in
the poorest of the poor segment is the Rashtriya Swasthya Bima Yojana (RSBY).
One of the largest mass health insurance programmes in the world, RSBY provides
health insurance to five members of every BPL family. The biggest USP of the
RSBY scheme is the empowerment it provides to the beneficiary. By being an RSBY
smart card holder, the beneficiary has the freedom to choose from the
empanelled private as well public hospitals to avail the best possible
treatment for his family. The scheme has been successful in delivering health
cover to the economically challenged households across
This scheme provides health insurance cover to the head of the
household, his spouse and up to three dependent children or parents. As part of
this scheme, smart cards embedded with biometric technology are issued to the
beneficiary family. The fingerprints and photographs stored on the smart card
facilitate accurate beneficiary validation and ensure that they get cashless
access to medical care across empanelled public and private hospitals.
The usage of biometric technology guarantees that each beneficiary has a
unique identification, enabling validation of the medical claim balance
available and foolproof authentication. The smart card reduces hospital and
other administrative costs and the need for cumbersome admission procedures at
hospitals, thereby providing a sustainable platform for the delivery of
cashless health insurance to economically challenged citizens at remote rural
locations.
RSBY also has a robust monitoring and evaluation system that can track
all transactions happening across the country and provide periodic analytic
reports.
ICICI Lombard partnered with the Ministry of Labour and Employment,
Government of India and State governments to implement this smart card based
health insurance scheme in the states of Maharashtra, Haryana, Uttar Pradesh,
Punjab, Gujarat and
The company received The Golden Peacock Innovation Award, 2011 for the
RSBY scheme. ICICI Lombard was recognised for deployment of biometric card
technology to implement the scheme, which helped the Government of India to
execute the scheme rapidly.
ICICI Lombard was also bestowed with the prestigious SKOCH Financial
Inclusion Award, 2011 for the RSBY scheme in the micro finance category. The
award recognised the pioneering efforts made by the company for providing
health coverage for the below poverty line through a robust and effective
delivery model.
Health Insurance
Scheme for Handloom Weavers
Weavers and ancillary workers are an important segment of the
unorganised sector. Weaving started as a part-time activity in rural areas and
transformed into a flourishing economic activity driven by significant market
demand. Handloom weaving sustains millions of weavers spread across the
country, contributes significantly to export and is the second largest
employment generator after agriculture.
The weavers’ scheme covers handloom weavers and ancillary workers like
those engaged in warping, winding, dyeing, printing, finishing, sizing,
jhala-making and jacquard cutting. The scheme provides the weaver community
comprehensive healthcare and medical assistance for a wide range of common
ailments including a substantial provision for outpatient department (OPD)
services. The scheme provides coverage to the weaver and his family and covers
pre-existing as well as new diseases with an annual limit per family of
`15,000.
ICICI Lombard has covered 16 lakh families last year and has settled
over 30 lakh claims under its health insurance scheme for handloom weavers and
ancillary workers. The scheme allowed treatment at 1,599 empanelled hospitals
and 855 OPD clinics.
Mobile OPDs have been arranged to make doctors and medicines available
to everyone along with the required infrastructure. The first project of this
kind was piloted in Rani in Kamrup district of Assam on June 10, 2008 where 114
patients were treated. Over the past three years, the scopes of the mobile OPDs
have expanded to include specialty consultation and medicine, which helped
rural customers avail gynaecological, ophthalmic, cardiac and dental
treatments.
ICICI Lombard also conducted health camps for weavers and at March 31,
2011 had organised over 214 health camps treating approximately 93 thousand
weavers.
Rajiv Gandhi
Shilpi Swasthya Bima Yojana
Rajiv Gandhi Shilpi Swasthya Bima Yojana (RGSSBY) is the first-ever
health insurance initiative for artisans in the country. The scheme is
implemented by the Development Commissioner - Handicraft, Ministry of Textiles
along with ICICI Lombard and covers the artisan, spouse and two children for
comprehensive health insurance including OPD.
This policy aims to financially enable the artisans’ community to help
access the best of healthcare facilities in the country. RGSSBY also covers
death and disability due to accident to the artisan and his or her family. All
craft persons whether male or female, between the age group of 01 day to 80
years are eligible to be covered under RGSSBY.
The scheme provides coverage to the artisan and his family for
preexisting as well as new diseases with an annual limit of `15,000 per family.
The scheme allows the insured to avail alternative systems of medicine,
maternity, childcare and spectacles. ICICI Lombard enrolled approximately 8
lakh artisans and settled 15.2 lakh claims under the RGSSBY scheme last year.
Health Insurance
Scheme for Women Sericulturist and Workers:
This Health Insurance Scheme aims at financially enabling the women
sericulture farmers, workers in private reeling units and grainages to access
healthcare facilities across the country. The scheme provides coverage to the
women beneficiaries (as the prime insured), her spouse and two children. The
sum insured for this scheme is 15,000. Comprehensive healthcare assistance is
provided for a wide range of ailments including a substantial provision for
outpatient department (OPD) services. The scheme allows the insured to avail
alternative systems of medicine, maternity care, childcare, and spectacles
along with covering pre-existing diseases.
Through this policy, beneficiaries enjoy facility for cashless claims
settlement through a network of 1599 empanelled hospitals and 897 OPD clinics
across
This scheme covers 13 States namely Andhra Pradesh, Karnataka, Tamil
Nadu,
Weather Insurance
Agriculture is still the dominant sector in
Weather based crop insurance Scheme (WBCIS) is an index based insurance
product, which was pioneered by ICICI Lombard in
In FY 2011, weather has contributed to Rs.3321.2 million, 7.8% of the
company’s direct business and is the market leader amongst private insurers for
Weather Based CIS. For FY 11, ICICI Lombard increased its market penetration to
41 districts from the earlier 14 in FY 2010 and received mandates for
implementation of WBCIS in the states of Rajasthan, Madhya Pradesh, Uttar
Pradesh,
MNAIS aims at sustainable production in agriculture sector, thereby
ensuring food security, crop diversification while enhancing growth and
competitiveness in the agriculture sector, besides protecting farmers from
production risks. ICICI Lombard is the only private insurer to have received a
mandate to implement MNAIS in two districts of Uttaranchal and Madhya Pradesh.
With the introduction of the modified scheme, it is expected that an increased
number of farmers will be able to manage risks in their agriculture production
in a better way and will succeed in stabilising farm income particularly at the
times of crop failure on account of natural calamities.
In the last financial year, ICICI Lombard also focused on setting up
dedicated teams to service the rural beneficiaries and expand the scope of
financial inclusion to the economically challenged members of the society. The
company worked with various intermediaries like commercial banks, cooperative
banks and cooperative societies to create cost-effective delivery channels for
farmers across 11 states. Robust processes for claims servicing are a critical
part of ICICI Lombard’s core customer proposition. In order to facilitate
faster claim processing, the company collaborated with National Collateral
Management Services Limited, a group company of National Commodities Exchange
of India to install automated weather stations at 550 locations across the
country. This is supplemented by the latest weather reports received from
Indian Meteorological Department.
RETAIL
During Fiscal 2011, the retail segment remained a focus area for the
company with Motor insurance business including private cars contributed 75% of
the retail business followed by health insurance and other retail insurance
segments including travel accounted for the rest.
Motor insurance continues to drive the retail business of the company
covering more than 4 million vehicles. Private car and two-wheeler segments
accounted for nearly 71% of the motor insurance business. More than 80% of
policy issuance was done over-the-counter (OTC) through various point-of-sale
applications across all geographies.
ICICI Lombard launched “Zero depreciation” as an add-on cover with Motor
Insurance. This add-on provides additional coverage for the depreciation payable
by the customer in the event of a claim. With this additional protection, the
customer liability is reduced only to the deductible chargeable under motor
insurance policy. The product received a very positive response from the car
and two wheeler customers. The add-on is offered seamlessly along with the
motor insurance policy and is currently available for vehicles up to three
years old.
Claims initiatives introduced by ICICI Lombard led to improved service
levels. These include e-claim processing whereby select garages were authorised
to approve claims up to a certain limit reducing the time gap between vehicles
arriving at the garage and the time taken for the vehicle survey. Additionally
customers can track their motor claims through the company’s website. The
widened service provider network, resulted in more than 89% car claims being
settled in cashless mode. The company has simplified customer access to its
call center through
an easy to remember eight-digit toll free number for India (1800-2666)
to facilitate customer service, purchase, and policy renewal.
In the Health segment, a new product, “Health Care Plus” was launched
which provides the consumer with an enhanced Sum Insured, designed to
supplement their existing health insurance coverage. For a considerably lower
premium, it takes care of the medical expenses in cases where their present
cover has exhausted its sum insured. It was very well received by ICICI
Lombard’s customers and opened a new stream of revenue for the company. The Health
retention business has also moved significantly in Fiscal 2011. In order to
provide better customer experience, the Company incorporated the option of
electronic clearing and auto renewal service for the health policy holders.
This resulted in increase in customer satisfaction and further enhanced
retention rate.
This year ICICI Lombard added ING Vyasya Bank to the list of its various
bancassurance partners including ICICI Bank and American Express. ICICI
Lombard’s successful bancassurance model follows an integrated approach and
ensures a seamless product delivery to the bank’s customers.
Advisors form a core part of ICICI Lombard family. The company realizes
the importance of well equipping partners to meet the customer’s needs. In
recent times, several techno-marketing initiatives have been undertaken to
delight the customers and enhance serviceability to the partners. One of such
initiative is I-Partner. Designed to be a benchmark in the industry, I-Partner
will enable partners and customers with end-to-end process automation through
enhanced IT applications. ICICI Lombard has launched retail products on this
portal. Going forward the company also plans to launch products for SME (small
and medium enterprises) business segment on this platform. To enhance customer
experience at each touch point this portal will enable partners to provide real
time policy issuance as well as claim status to their customers, which will add
significant value to the business partners.
The company continues to be recognised for its high quality service and
customer focus at various forums. This year too the company was recognised for
its efforts in customer satisfaction, IT and branding initiatives. CNBC AWAAZ
recognises and reward those brands that millions of Indians have chosen to buy,
to try, to experience and to own.
CNBC AWAAZ Consumer Awards awarded ICICI Lombard the “Most preferred
General Insurance Brand” of the year 2010. The CNBC AWAAZ Consumer Awards are
based on an exhaustive study conducted by AC Nielsen Company involving a
national survey of 4000 people across 20 cities.
ICICI Lombard also won the award of “World Business Leader in Insurance
category” presented by World Confederation of Business, which is bestowed on
corporate houses for business excellence in recognition for consistently
achieving excellence in their chosen fields.
CMO Council awarded The Master Brand Award 2010 to ICICI Lombard. Master
Brand Award is conferred upon those brands, which appeal to a large set of
consumers from across categories while constantly keeping in mind a
consumer-centric approach. The award recognises the branding initiatives by
ICICI Lombard, which have enabled the company to build strong brand equity and
acquire greater consumer mindshare.
ICICI Lombard was also conferred ‘The Customer and Brand Loyalty Award’
for the third time in a row. Loyalty
The company’s IT initiatives were recognised by NASSCOM – CNBC, and were
honoured with the IT user Award 2010 for Best Technology Implementation in the
Insurance Sector. The award recognises the implementation of Rural Point of
Service (RPOS), an innovative solution, which has enabled ICICI Lombard to
extend health coverage to a large number of underprivileged families across various
states, while achieving service excellence and reduced turnaround time (TAT)
and operational cost.
World Brand Congress recently adjudged ICICI Lombard’s Save Money Motor
Insurance campaign the Best Marketing Campaign of the Year 2010. The honour recognises
the marketing campaign in terms of increased brand visibility, customer reach
and the use of diverse media to reach out to the target audience, which enabled
the company to spread brand awareness and capitalise on brand equity.
REINSURANCE
The reinsurance program of the Company continued to be a mixture of
proportional and non-proportional treaties. The reinsurance program was
structured keeping in mind the Company’s philosophy of buying adequate cover in
order to protect value-at-risk at all times.
For the year, the Company increased its retention across all product
segments. The reinsurance structure was reinforced to protect the net account
against single large losses and catastrophic events through appropriate risk
and catastrophe protection. The Company continued to have a 1-in-500 year
catastrophe protection and its accumulated exposure across various geographies
was modeled by an international agency to ensure the adequacy of catastrophe
protection. The Company continued to purchase non-proportional protection for
its liability and aviation portfolio, thereby maximising retentions and
ensuring protection of value at risk. Weather Insurance has emerged as a key
portfolio for ICICI Lombard and the reinsurance program structured is a combination
of proportional and stop loss reinsurance.
General Insurance Corporation (GIC) remained the largest reinsurance
partner. ICICI Lombard continued its association with Scor, Swiss Re and
Hannover Re for the weather insurance portfolio.
OPERATIONS
During fiscal 2011, ICICI Lombard focused on the four pillars of
operating models for providing enhanced service to customers and leverage
technology ensuring best efficiency and seamless implementation of processes.
The four pillars of lean process, centralisation of activity, decentralisation
of powers and automation helped ICICI Lombard’s operations team to augment the
quality of service, lessen time-tomarket, and improve customer response time.
The operations team serves customers through a network of over 300 branches in
The operations team of the company reduced redundant activities, steered
for process automation and rationalised processes for approvals. The 300 plus
branch network is the face of ICICI Lombard, which helps speedy delivery of
services to the customers and intermediaries. The branch service structure was
revamped through the hub-and-scan model that replaced the earlier hub-and-spoke
model, leading to improved productivity and faster servicing. The sales team
does scanning during the issuance of policy and the parent branch does the
processing. At ICICI Lombard, the branch team is trained on motor underwriting
and front-end managers are empowered to decide on most underwriting approvals.
The customer support desk is empowered to complete most of the servicing
without any dependencies, leading to a higher first-time resolution. The
internal query system ‘Samadhan’ facilitates routing and tracking of all
process queries.
A key long-term strategy of ICICI Lombard is to continuously improve
customer and agent servicing. Automation of payment processing has been a key
area of focus to ensure reduction in turn around time (TAT) reduced human
intervention and reduced error rate. Hence, payment processing has been
automated with the direct integration between payment request system,
accounting system and cheque printing system. Integration of payment processing
systems has significantly improved process efficiency. Commission payments have
been automated through the agency management system and electronic fund
transfer for commission payout has been institutionalised. Payment through fund
transfer instead of cheque provides faster payments to the vendors and reduces
the cost of the organisation. Today ICICI Lombard makes 90% of its vendor
payments through fund transfer.
The general insurance industry is characterised by operational
complexity across products, channels, customer segments and the policy life
cycle. The operations team is focused on streamlining the process and
extracting maximum efficiencies at all levels. During fiscal 2011, the company
had continued emphasis on automation of processes for improved efficiency,
accuracy, and cost reduction. To increase point of sales issuance ICICI Lombard
launched I-Partner system for agents to decrease the operational costs and
improve the operational efficiency. ICICI Lombard focused on educating
customers on the self-service transaction platform through its website
icicilombard.com. Customers can buy health, motor and travel policies online.
They can also renew policies and create service requests through the website.
Focusing on internal cost optimisation and efficient tracking of
accommodation booking of employee travel, Yatra system was introduced. The
benefit of this initiative was cost reduction, quick reports on travel
activities of the employees and better turnaround time tracking.
CONTINGENT LIABILITIES:
|
Particulars |
31.03.2011 (Rs.
in millions) |
|
Statutory demands/liabilities
in dispute, not provided for (Note) |
392.421 |
|
|
|
Note: The Company
has disputed the demand raised by Income Tax Department for assessments
completed of past years and the appeals are pending before the appropriate
authorities.
FIXED ASSETS
v Goodwill
v Intangibles – Computer Software
v Land – Freehold
v Leasehold Property
v Buildings
v Furniture and Fittings
v Information Technology Equipment
v Vehicles
v Office Equipment
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.45.69 |
|
|
1 |
Rs.75.29 |
|
Euro |
1 |
Rs.65.77 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
6 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
6 |
|
--RESERVES |
1~10 |
6 |
|
--CREDIT LINES |
1~10 |
6 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
NO |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
57 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.