Group 12

Presenters Name Roll No

Nidhi Sanghavi 54

Yash Jhaveri 23

Krutika Shetty 86

Hiral Anuvadia 111

 Industry overview of Insurance sector

insurance

General Life
insurance insurance

Motor Health Fire Marine

insurance insurance insurance insurance
• The Indian Insurance Sector is basically divided into two categories –
Life Insurance and Non-life Insurance and is governed by the IRDAI.
• Total insurance market - US$ 84.72 billion in 2017.
• India with 3.42 per cent penetration rate which is considerably low
when compared to global average of 6.2 per cent.
• The Insurance sector in India consists of total 57 insurance
companies. Out of which 24 companies are the life insurance
providers and the remaining 33 are non-life insurers.
• India allowed private companies in insurance sector in 2000, setting a
limit on FDI to 26%, which was increased to 49% in 2014.
• Private insurers did a joint venture with foreign insurance companies
to start their insurance businesses in India.
 Industry over view of Life Insurance
• The Indian life insurance sector is the tenth largest life insurance
market in the world and the fifth largest in Asia.
• Premium income of the life insurance segment had increased 14.04
per cent in 2017 to Rs. 4.18 trillion (US$ 64.92 billion).
• The domestic life insurance industry registered 17.65% y-o-y growth
for new business premium in 2017-18.
• Private sector companies hold 28.93 per cent market share in the life
insurance segment.
 Market Share of Major Companies (2017)

14%

LIC
6%

ICICI

5%
HDFC Standard Life

4%
SBI Life

Others

71%
 KEY PEOPLE

Mr. Deepak S Parekh Ms. Vibha Padalkar

Chairman Executive Director &
Chief Financial Officer

Mr. Amitabh Chaudhry

Managing Director &
Chief Executive Officer
 Company overview of HDFC standard life
• Established in 2000, HDFC Life is a leading long-term life
insurance solutions provider in India, offering a range of
individual and group insurance solutions
• HDFC Standard Life Insurance Company Limited is a joint
venture between HDFC Ltd., India’s leading housing
finance institution and Standard Life, a global investment
company
• HDFC Subsidiary Company
• HDFC Pension Management Company Ltd
• HDFC International Life and Re Company Ltd
• Market cap (Rs. In Cr) – 100,506.53
• As on Dec 31, 2017, the Company had 33 individual and
11 group products in its portfolio, along with 8 optional
rider benefits.
• Company is among the top three life insurers in India by market share
in New Business Premium
 HDFC Standard Life share price v/s Nifty 50
HDFC STANDARD LIFE INSURANCE
600
500
400
300
200
100
0

NIFTY 50
11,400
11,200
11,000
10,800
10,600
10,400
10,200
10,000
9,800
9,600
9,400
 Threats

Instability in Economy – There is a

high instability in the economy which
impacts the business to great extent.
Global crisis inhibits people from
investing in such policies as the
guarantee of getting the returns or even
the principal amount is not known.

NBFC’s Entry in the industry – There

is a high competition in the market
owing to the fact that many new players
are entering the market and biggest
threat is from NBFC’s.

Movement of Employees – The

industry experiences high churn ratio
and hence the employees who are
successful in the industry keeps on
moving from one company to another
which puts a lot of pressure on hiring.
Financial of company
 CURRENT RATIO QUICK RATIO

1.00 0.80
0.90
0.70
0.80
0.60
0.70

0.60 0.50

0.50 0.97 0.40 0.75

0.89 0.69 0.69
0.65
0.40 0.76 0.77 0.78 0.59
0.30
0.30
0.20
0.20
0.10
0.10

0.00 0.00
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
CURRENT RATIO 0.76 0.97 0.89 0.77 0.78 QUICK RATIO 0.59 0.69 0.75 0.65 0.69

EPS ROE

4.50 35.00%
4.00
30.00%
3.50
25.00%
3.00
2.50 20.00%
4.44 32.84% 32.70%
3.94 4.09
2.00 3.64 15.00% 28.44%
25.41%
1.50 20.46%
2.26 10.00%
1.00
0.50 5.00%

0.00 0.00%
2012-13 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 2014-15 2015-16 2016-17
EPS 2.26 3.64 3.94 4.09 4.44 ROE 20.46% 32.84% 32.70% 28.44% 25.41%
 PBT & PAT MARGIN
7.00%
6.06% 5.05%
6.00% 5.37% 5.45% 5.32% 4.60%
5.15%
5.00% 4.01% 4.72%

4.05%
4.00%

3.00%

2.00%

1.00%

0.00%
2012-13 2013-14 2014-15 2015-16 2016-17

PBT Margin PAT Margin

Future of Life Insurance in India
 Future of Insurance Sector in India
• The Indian insurance industry is expected to grow to US$ 280 billion by
FY2020
• With increase in income and exponential growth of purchasing power as
well as household savings, the insurance sector in India would introduce
emerging trends like product innovation, multi-distribution, better claims
management and regulatory trends in the Indian market.
• The government also strives hard to provide insurance to individuals in a
below poverty line by introducing schemes like the
 Pradhan Mantri Suraksha Bima Yojana (PMSBY),
 Rashtriya Swasthya Bima Yojana (RSBY) and
 Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
• With several regulatory changes in the insurance sector in India, the future
looks pretty awesome and promising for the life insurance industry
• Demographic factors
 Overview about Max Life
• Max Life is an unlisted private life insurance provider, set up in the year
2000 as ‘Max New York Life Insurance Co. Ltd’, which was later changed to
‘Max Life Insurance Co. Ltd
• It is a joint venture between Max Financial Services Limited, a part of the
Max group of companies and the Mitsui Sumitomo group, a Japanese
insurance provider with a global presence
• MFSL held 69% shares in Max Life and Mitsui Sumitomo Insurance
CompanyLimited held 25% of the shares
• MFSL, a part of the Max group of companies is a core investment
company
 Deal Structure
• Merger of Max Life with MFSL
• shareholders of Max Life shall be issued 1 equity share of MFSL for
Step I every 4.98 shares held by them in Max Life

• Demergers of the life insurance undertaking of MFSL into HDFC Life.

• shareholders of the MFSL were to be allotted 1 shares in HDFC Life for
Step II every 2.33 shares held by them in MFSL.

• Merger of remaining business of MFSL with Max India

• shareholders of MFSL (post demerger) were proposed to receive 1 share
Step III of Max India for every 500 shares of MFSL
 What next for HDFC Standard Life

• IPO : HDFC Standard Life was listed on 17-11-2017 and shares were
issued at a premium of Rs.280
• Dividend Declared: Interim dividend was declared on 15-12-2017
13.6% i.e. Rs.1300 per share.
Opportunity Analysis
 Company Overview – Bajaj Allianz Life Insurance
• Bajaj Allianz Life Insurance received the Insurance Regulatory and
Development Authority (IRDA) certificate of Registration on 3 August 2001
to conduct Life Insurance business in India.
• Bajaj Allianz Life Insurance is a joint venture between Bajaj Fin Serv Limited
(formerly part of Bajaj Auto Limited) owned by the Bajaj Group of India
and Allianz SE, a European financial services company.
• Being one of the private insurance companies in India, it
offers insurance products for financial planning and security.
• It is led by Tarun Chugh who is the Managing director and Chief Executive
Office of the company.
• CFO of Bajaj Allianz is Mr. Sampath Reddy.
• Bajaj Allianz Life Insurance began operations on 12 March 2001 and today
has a pan India presence of 759 branches. It is headquartered in Pune,
India.
 Why Bajaj Allianz ?
• HDFC Standard Life Insurance "good opportunity" which means a
company with strong distribution network, a strong track record
or bancassurance partnership.
• Bajaj Allianz Life Insurance is looking at acquisition opportunities to grow
its business as it has shareholder funds of over Rs 8,000 crore.
• Bajaj Allianz Life stands apart from other insurance companies due to its
high level of capitalization, it has net worth of Rs 8,476 crore ie seven
times the capital infused
• The company has made profits of over Rs 4,900 crore over the last five
years.
• The company has a solvency ratio of 582% as on March 31, 2017
• The rise in assets under management (AUM) which now account for more
than two thirds of premium for Bajaj Allianz Life
 Enterprise Value- Bajaj Allianz

• Cash Balance Available with HDFC Standard Life Insurance

= Rs. 7,964,970,000
• The EV of Bajaj Alliance is 28% of cash available with HDFC
Standard Life. Hence the company can acquire by paying cash