Chapter 01

Introduction to Insurance

Post liberalisation, the insurance industry in India has recorded significant growth. The
Indian insurance industry is expected to grow to US$ 280 billion by FY2020, owing to the
solid economic growth and higher personal disposable incomes in the country. Premium
income of the life insurance segment had increased 14.04 per cent in FY17 to Rs 4.18
trillion (US$ 64.92 billion). The total insurance market expanded from US$ 23 billion in
FY05 to US$ 84.72 billion in FY17.

There are 24 life insurance and 33 non-life insurance companies in the Indian market who
compete on price and services to attract customers. There are two reinsurance companies.
The industry has been spurred by product innovation, vipant distribution channels, coupled
with targeted publicity and promotional campaigns by the insurers . Private sector
companies hold 48.01 per cent market share in the general insurance segment and 28.93
per cent market share in the life insurance segment. Government has approved the
ordinance to increase Foreign Direct Investment (FDI) limit in Insurance sector from 26
per cent to 49 per cent which would further help attract investments in the sector.

The Insurance Regulatory and Development Authority (IRDA) recently allowed life
insurance companies that have completed 10 years of operations to raise capital through
Initial Public Offerings (IPOs). Insurance products are also covered under the
Exempt‑Exempt‑Exempt (EEE) method of taxation, which translates to an effective tax
benefit of approximately 30 per cent on select investments. In 2015, Government
introduced Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan
Jyoti Bima Yojana (PMJBY) to ping more people under the insurance cover. The scheme

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covered 50.9 million farmers in India in 2016-17. National National Health Protection
Scheme was announced under Budget 2018-19 as a part of Ayushman Bharat. The scheme
will provide insurance cover of up to Rs 500,000 (US$ 7,723) to more than 100 million
vulnerable families in India.

Going forward, increasing life expectancy, favourable savings and greater employment in
the private sector is expected to fuel demand for pension plans. Likewise, strong growth in
the automotive industry over the next decade would be a key driver for the motor insurance
market. As a result of globalization, deregulation and terrorist attacks, the insurance
industry has gone through a tremendous transformation over the past decade. In the
simplest terms, insurance of any type is all about managing risk. For example, in life
insurance, the insurance company attempts to manage mortality (death) rates among its
clients. The insurance company collects premiums from policy holders, invests the money
(usually in low risk investments), and then reimburses this money once the person passes
away or the policy matures. A person called an actuary

Constantly crunches demographic data to estimate the life of a person. This is why
characteristics such as age/sex/smoker/etc. all affect the premium that a policy holder must
pay. The greater the chance that a person will have a shorter life span than the average, the
higher the premium that person will have to pay. This process is virtually the same for
every other type of insurance, including automobile, health and property. In the U.S., the
Gramm-Leach-Bliley Act of 1999 legislated that banks, brokerages, insurance firms and
other types of financial institutions can join together to offer their customers a more
complete range of services. In the insurance business, this has led to a flurry of merger and
acquisition activity. In fact, a majority of the liability insurance underwritten in the U.S.
has been through big firms, which have also been scooping up other insurance names.

Ownership of insurance companies can come in two forms: shareholder ownership or

policyholder ownership. If the company is owned by shareholders, it is like any other
public company. That is, its shares trade on an exchange like the NYSE, and it is required
to report earnings on a quarterly basis.

The other type of ownership is called "mutually owned insurance companies." Here the
company is actually owned by the policyholders, so an account called policyholder's
surplus, rather than shareholder's equity, appears on the balance sheet . It should be
mentioned that in recent years many of the top mutual insurance companies have gone
through demutualization to become shareholder-owned. Today, only a small handful of
companies are still policyholder-owned.

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Origin of Insurance

If risk is like a smouldering coal that may spark a fire at any moment, insurance is our fire
extinguisher. Countries and their citizens need something to spread risk among large
numbers of people and to move risk to entities that can handle it. This is how insurance
emerged. Read on to learn how insurance evolved and how it can work to protect you from
being burned by risk.

The main concept of insurance—that of spreading risk among many—has been around as
long as human existence.

Whether it was hunting giant elk in a group to spread the risk of being the one gored to
death or shipping cargo in several different caravans to avoid losing the whole shipment to
a marauding tribe, people have always been wary of risk.

The first written insurance policy appeared in ancient times on a Babylonian obelisk
monument with the code of King Hammurabi carved into it. The Hammurabi Code was
one of the first forms of written laws. These ancient laws were extreme in most respects,
but one offered basic insurance in that a debtor didn't have to pay back his loans if some
personal catastrophe made it impossible (disability, death, flooding, etc.).

In the Dark and Middle Ages, most craftsmen were trained through the guild system.
Apprentices spent their childhoods working for masters for little or no pay. Once they
became masters themselves, they paid dues to the guild and trained their own apprentices.
The wealthier guilds had large coffers that acted as a type of insurance fund. If a master's
practice burned down—a common occurrence in the wooden hovels of medieval Europe—
the guild would rebuild it using money from its coffers. If a master were robbed, the guild
would cover his obligations until money started to flow in again. If a master were suddenly
disabled or killed, the guild would support him or his widow and family.

This safety net encouraged more and more people to leave farming and take up trades. As a
result, the amount of goods available for trade increased, as did the range of goods and
services available. The style of insurance used by guilds is still around today in the form of
group coverage.

Insurance in India refers to the market for insurance in India which covers both the public
and private sector organisations. It is listed in the Constitution of India in the Seventh
Schedule as a Union List subject, meaning it can only be legislated by the Central
government.

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The insurance sector has gone through a number of phases by allowing private companies
to solicit insurance and also allowing foreign direct investment. India allowed private
companies in insurance sector in 2000, setting a limit on FDI to 26%, which was increased
to 49% in 2014.[1] Since the privatisation in 2001, the largest life-insurance company in
India, Life Insurance Corporation of India has seen its market share slowly slipping to
private giants like HDFC Life Insurance, Exide Life Insurance, ICICI Prudential Life
Insuranceand SBI Life Insurance Company.
Insurance in its current form has its history dating back until 1818, when Oriental Life
Insurance Company was started by Anita Bhavsar in Kolkata to cater to the needs of
European community. The pre-independence era in India saw discrimination between the
lives of foreigners (English) and Indians with higher premiums being charged for the latter.
In 1870, Bombay Mutual Life Assurance Society became the first Indian insurer.
At the dawn of the twentieth century, many insurance companies were founded. In the year
1912, the Life Insurance Companies Act and the Provident Fund Act were passed to
regulate the insurance business. The Life Insurance Companies Act, 1912 made it
necessary that the premium-rate tables and periodical valuations of companies should be
certified by an actuary. However, the disparity still existed as discrimination between
Indian and foreign companies. The oldest existing insurance company in India is
the National Insurance Company , which was founded in 1906, and is still in business.
The Government of India issued an Ordinance on 19 January 1956 nationalising the Life
Insurance sector and Life Insurance Corporation came into existence in the same year. The
Life Insurance Corporation (LIC) absorbed 154 Indian, 16 non-Indian insurers as also 75
provident societies—245 Indian and foreign insurers in all. In 1972 with the General
Insurance Business (Nationalisation) Act was passed by the Indian Parliament, and
consequently, General Insurance business was nationalized with effect from 1 January
1973. 107 insurers were amalgamated and grouped into four companies, namely National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance
Company Ltd and the United India Insurance Company Ltd. The General Insurance
Corporation of India was incorporated as a company in 1971 and it commence business on
1 January 1973.
The LIC had monopoly till the late 90s when the Insurance sector was reopened to the
private sector. Before that, the industry consisted of only two state insurers: Life Insurers
(Life Insurance Corporation of India, LIC) and General Insurers (General Insurance
Corporation of India, GIC). GIC had four subsidiary companies. With effect from
December 2000, these subsidiaries have been de-linked from the parent company and were
set up as independent insurance companies: Oriental Insurance Company Limited, New
India Assurance Company Limited, National Insurance Company Limited and United
India Insurance Company.
The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster existed
in primitive men also. They too sought to avert the evil consequences of fire and flood and
loss of life and were willing to make some sort of sacrifice in order to achieve security.
Though the concept of insurance is largely a development of the recent past, particularly

4
after the industrial era – past few centuries – yet its beginnings date back almost 6000
years. Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first life
insurance company on Indian Soil. All the insurance companies established during that
period were brought up with the purpose of looking after the needs of European
community and Indian natives were not being insured by these companies. However, later
with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance
companies started insuring Indian lives. But Indian lives were being treated as sub-
standard lives and heavy extra premiums were being charged on them.

Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance
company in the year 1870, and covered Indian lives at normal rates. Starting as Indian
enterprise with highly patriotic motives, insurance companies came into existence to carry
the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance
companies.

The United India in Madras, National Indian and National Insurance in Calcutta and the
Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-
operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of
the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance
and Swadeshi Life (later Bombay Life) were some of the companies established during the
same period. Prior to 1912 India had no legislation to regulate insurance business. In the
year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed.

5
Types of Insurance

Home Insurance

Whether we own or rent, our homes and our possessions are precious. Choosing to insure
them, and making sure you have the right insurance products for your circumstances,
offers peace of mind and lowers the financial pain of repairing your home and replacing
damaged or stolen belongings.

You can choose to insure your property, its contents, or both.

Contents Insurance

Contents insurance covers the financial cost of repairing or replacing your household
personal possessions and furnishings, such as curtains, furniture, white goods, stereo, TV,
computers and other electrical appliances, clothing, jewellery, sporting equipment and
even toys.

This insurance covers household items belonging to you, and to family members who live
with you. These policies may also include items such as sporting gear and motorised
wheelchairs but do not include items permanently attached to the building or insured
address or portable items you might take outside your home. You can take out extra cover
to protect things like your jewellery, cameras, mobile phones and sporting equipment (but
not when in use) from accidental loss or damage.

These policies don‘t usually include cover for items friends or visitors bring into your
premises, unless you list their names on the policy.

Car insurance

Like buying a car, there is no single best solution when it comes to buying insurance Make
sure that price is not the only factor you think about when you choose your motor vehicle
insurance. You have a wide choice of policies, and you should shop around to make sure
that you choose a product that suits your needs and circumstances.

As with all insurance, before signing the insurance contract you should carefully read the
policy document and product disclosure statement and make sure you ask your insurer.

Travel Insurance

Whether you need to travel interstate, overseas or to another city for business or for
personal reasons, any trip away from your home involves planning, expense and some risk.

6
Travel insurance can cover you for financial losses caused by a wide range of events that
can affect your trip, whether they occur before, during or even after your trip. These might
include travel modification, cancellation or interruption, medical expenses, baggage
damage or theft, and more.

Travel insurance should be a priority in all travel arrangements, whether you travel
regularly, occasionally or you are setting off on a once-in-a-lifetime trip.

For international journeys, the Australian Government advises that travel insurance is as
important as a passport, regardless of your destination.

You should purchase a travel insurance policy as soon as you have paid for you trip. That
way you may be covered for unused travel and accommodation in the event that you must
cancel your trip due to a covered event, such as illness or a natural disaster.

Most travel insurers offer policies that cover families and couples, and some also offer
multi-trip and annual policies for frequent travellers. If you are pregnant, make sure you
are covered by your insurance.

Boat Insurance

If you own or operate a boat or other marine craft, marine insurance can cover you for
loss damage, theft or injury risks to your craft and its occupants, as well as any costs you
may incur to other people or property through accidental losses.

Many insurers will offer boat or marine craft insurance that includes basic cover for
damage or loss, with a range of additional options available. Some specialist boat insurers
and brokers can cover boat owners for less common insurance risks and activities.

Boats and other marine craft can be expensive assets, and if you accidentally damage
another boat or marine infrastructure you could face significant financial costs. For most
boat owners, marine insurance is a necessity

Landlord and renters insurance

If you own a rental property, or you are a tenant, you may need different insurance
products than normal home and contents policies.

Landlords should consider how they can protect their premises, its assets and the income
they receive from their tenants.

Renters are not covered by their landlord's insurance policies. Insurers offer products
designed for renters, including low-cost policies.

Renters insurance.

When you are renting, the owner of the property you are living in is responsible for damage or loss
When you are renting, the owner of the property you are living in is responsible for damage or
loss.
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Business Insurance

Running a business is a challenge, and it often involves putting your own finances at
risk. It makes sense to manage risk, reduce uncertainty and protect your livelihood.

Business insurance can protect the equipment and machinery you need to stay in business.
It can ensure that you, your employees and any members of the public with whom you
interact in your business are protected from the risk you face as a business owner.

And it may also provide financial support if your business is unable to operate following
an unexpected event such as a fire or natural disaster.

Think about how you would manage if your stock, equipment, or even your premises were
badly damaged or destroyed. Would you be able to continue running your business? Would
you be able to recover from the financial loss? Insurance companies provide a variety of
policies that cover small businesses, tradespeople, professionals, hospitality operators and
more.

Liability Insurance

Liability insurance protects you against financial loss if your actions, your negligence or
the condition of your property is found to cause a person to be injured or killed, or a
person's property to be damaged or destroyed or they suffer loss as a result of relying on
your services or advice. Liability products are most commonly taken out by businesses for
risks involved in their day-to-day operation, but they are also built into many property
insurance policies, for example liability cover in home and contents insurance.

Pet Insurance

If your pet is involved in an accident or suffers a sudden illness, the veterinary bills can quickly add
up. Surgical costs alone can run into thousands of dollars. Pet Insurance can help you pay for
unexpected vet treatments. Some policies offer cover for routine care such as general check ups
and everyday preventative care, from teeth cleaning and de-worming to vaccinations. Most pet
insurance products are only for dogs and cats. However, some policies are designed for horses.

Motorbikes and scooters Insurance

If you own a motorbike or scooter, you can find policies that can insure against loss of, or damage
to your motorcycle and motorcycle apparel (including riding gear such as bike leathers and
helmet), damage to other vehicles and property, and your liability. If you take long trips on your
motorbike or scooter, some insurers will offer options such as emergency accommodation if a
incident leaves you stranded a specified distance away from home, and travelling expenses to
return to your home if your bike cannot be ridden.

Sports Insurance

It is vital that sport and recreation organisations protect their assets with
adequate insurance. Sport insurance policies are designed to cover amateur and
professional players, clubs, groups and associations and organisations in the sports

8
industry. There are a number of different types of specialised sports insurance categories,
including business insurance packages or sports clients, which reflect typical business
insurance types, plus additional categories.

Farm Insurance

If you work in the agricultural sector, instead of ordinary business insurance you might
find that a niche product such as farm, crop and livestock insurance is going to be best
suited to what you need. Farm, crop and livestock insurance usually involves a package of
different insurance types tailored to cover farm businesses and primary producers for a
range of events.

Flood Insurance

Water, whether caused by a flooding river, burst water pipe or storm, can cause extensive
damage to your home, contents and other assets. It‘s important to understand the different
types of floods and other water-related events and how they may be covered under your
insurance policies. Flood insurance is often built into a range of insurance policies,
including home and contents, strata title, motor vehicle and business insurance policies.

Nature of Insurance:
Nature of contract is a fundamental principle of insurance contract. An insurance contract
comes into existence when one party makes an offer or proposal of a contract and the other
party accepts the proposal. A contract should be simple to be a valid contract. The person
entering into a contract should enter with his free consent.

 Principal of utmost good faith:

Under this insurance contract both the parties should have faith over each other. As a client
it is the duty of the insured to disclose all the facts to the insurance company. Any fraud or
misrepresentation of facts can result into cancellation of the contract.

 Principle of Insurable interest:

Under this principle of insurance, the insured must have interest in the subject matter of the
insurance. Absence of insurance makes the contract null and void. If there is no insurable
interest, an insurance company will not issue a policy. An insurable interest must exist at
the time of the purchase of the insurance. For example, a creditor has an insurable interest
in the life of a debtor, A person is considered to have an unlimited interest in the life of
their spouse etc.

 Principle of indemnity:

Indemnity means security or compensation against loss or damage. The principle of

indemnity is such principle of insurance stating that an insured may not be compensated by
9
the insurance company in an amount exceeding the insured‘s economic loss. In type of
insurance the insured would be compensation with the amount equivalent to the actual loss
and not the amount exceeding the loss. This is a regulatory principal. This principle is
observed more strictly in property insurance than in life insurance. The purpose of this
principle is to set back the insured to the same financial position that existed before the loss
or damage occurred.

 Principal of subrogation:
The principle of subrogation enables the insured to claim the amount from the third party
responsible for the loss. It allows the insurer to pursue legal methods to recover the amount
of loss, For example, if you get injured in a road accident, due to reckless driving of a third
party, the insurance company will compensate your loss and will also sue the third party to
recover the money paid as claim.
 Double insurance:
Double insurance denotes insurance of same subject matter with two different companies
or with the same company under two different policies. Insurance is possible in case of
indemnity contract like fire, marine and property insurance. Double insurance policy is
adopted where the financial position of the insurer is doubtful. The insured cannot recover
more than the actual loss and cannot claim the whole amount from both the insurers.

10
Insurance Objectives
Every day we face uncertainty and risk. Insurance offers individuals and organizations
protection from potential losses as well as peace of mind in exchange for periodic
payments known as premiums. Today, insurance companies offer a variety of insurance
products in areas such as property, casualty and life insurance. To function effectively,
insurance must satisfy a number of objectives including pooling risk, paying out claims,
ensuring the solvency of insurers and incentivizing safe behaviour.

Pooling Risk
One of the objectives of insurance is to pool the risk of a sufficiently large number of
policyholders. By collecting premiums from many individuals or organizations, insurers
can pay out relatively few claims each year while collecting premiums from the majority of
policyholders who don't file claims over that same period. This conclusion follows the Law
of Large Numbers. (Reference 1: page titled "Insurance Helps People Manage Risks")
Loss Recovery
A second key objective of insurance is to compensate policyholders following
predetermined catastrophic events. For example, auto insurance policyholders are
reimbursed for part or all of the damages sustained by their vehicle in a collision. Other
examples of assets covered by property insurance include houses, inventory and personal
possessions.
Insurer Solvency
A third objective of insurance is to satisfy policyholders that insurers are financially stable
and solvent. This is important because if any policyholders weren't compensated for
eligible losses it would undermine society's confidence in the system. To ensure that
insurers remain solvent at all times, the United States government closely regulates and
monitors the industry.
Behavioural Influence
Yet another aim of insurance is to promote and reward responsible behaviour. For
example, individuals with safe driving records are more likely to be quoted lower auto
insurance premiums than those with unsafe driving records. Such discriminatory pricing
may cause some individuals and organizations to behave with greater caution, thereby
making society safer for everyone.

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FUNCTIONS OF INSURANCE

The functions of insurance can be studied into two parts:

(i) Primary Functions

(ii) Secondary Functions.

Primary Functions:

(i) Insurance provides certainty: insurance Provides certainty of payment at the

uncertainty of loss. The uncertainty of loss can be reduced by better planning
and administration. But, the insurance relieves the person from such difficult
task. Moreover, if the subject matters are not adequate, the self- provision may
prove costlier. There are different types of uncertainty in a risk. The risk will
occur or not, when will occur, how much loss will be there. In other words, there
are uncertainty of happening of time and amount of loss. Insurance removes all
these uncertainty and the assured is given certainty of payment of loss. The
insurer charges premium for providing the said certainty.
(ii) Insurance provides protection: The main function of the insurance is to provide
protection against the probable chances of loss. The time and amount of loss are
uncertain and at the happening of risk, the person will suffer loss in absence of
insurance. The insurance guarantees the payment of loss and thus protects the
assured from sufferings. The insurance cannot cheek the happening of risk but
can provide for losses at the happening of the risk.
(iii) Risk-Sharing: The risk is uncertain, and therefore, the loss arising from the risk
is also uncertain.
(iv)

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 Secondary Functions:

Besides the above primary functions, the insurance works for the following functions:

(i) Prevention of loss: The insurance joins hands with those institutions which are
engaged in preventing the losses of the assured and so more saving is possible
which will assist in reducing the premium. Lesser premium invites more business
and more business cause lesser share to the assured. So again premium is reduced
to, which will stimulate more business and more protection to the masses.
Therefore, the insurance assist financially to the health organization, fire brigade,
educational institution and other organizations which are engaged in preventing
the losses of the masses from death or damage.
(ii) It provides Capital: The insurance provides capital to the society. The
accumulated funds are invested in productive channel. The dearth of capital of the
society is minimized to a greater extent with the help of investment of insurance.
The industry, the business & the individual are benefited by the investment &
loans of the insurers.
(iii) It improves Efficiency: The insurance eliminates worries and miseries of losses at
death and destruction of property. The care-free person can devote his body &
soul together for better achievement. It improves not only his efficiency, but the
efficiencies of the masses are also advanced.
(iv) It helps Economic Progress: The insurance by protecting the society from huge
losses of damage, destruction and death. Provides an initiative to work hard for
the betterment of the masses.

13
 Chapter 02
HDFC ERGO

About.
HDFC ERGO General Insurance Company Limited is a joint venture between HDFC Ltd.
and ERGO International AG, a Germany-based company that is part of the Munich Re
Group. HDFC holds 51 per cent, and ERGO the other 49 per cent. The firm operates in 91
Indian cities with over 108 branches and 2,000 staff members.
HDFC ERGO General Insurance Company Ltd. is a joint venture between HDFC Ltd.,
India‘s premier Housing Finance Institution and ERGO International AG, the primary
insurance entity of Munich Re Group. The Company offers complete range of general
insurance products ranging from Motor, Health, Travel, Home and Personal Accident in
the retail space and customized products like Property, Marine and Liability Insurance in
the corporate space.
HDFC ERGO has been assigned ‗iAAA‘rating by ICRA indicating its highest claim
paying ability. We have been certified with ISO certification for our claim services, policy
issuance, customer servicing and standardization and uniformity of Information Security
processes being followed across all branches & locations.
HDFC ERGO has been expanding its presence across the country and is today present
across 89 cities with 109 branch offices with an employee base more than 1900
professionals. The company has a right balance of distribution channel comprising of
Dealerships, Brokers, Retail and Corporate Agents, Bancassurance and Direct Sales Team.

14
History
In 2002, HDFC Ltd. and ERGO International AG formed a general insurance joint
venture company, named HDFC ERGO General Insurance Company Limited with its
headquarter in Mumbai. Under the agreement, ERGO acquired 26 per cent share, the rest
being held by HDFC. During its initial years the company saw a slump and recorded an
underwritten Gross premium of Rs. 196.78 crores (FY 2006-07) as against Rs. 206.89
crore in the previous year (FY 2005-06). The company made a strong come back and
escalated its GWP to Rs.239.69 crores (FY 2006-07).
In 2015, ERGO bought 23% more stake in the HDFC venture, making them a 49%
stakeholder.
The firm is a Public Company and is categorized as Indian Non-Government Company.
The company‘s authorized share capital is Rs. 6,000,000,000 and its paid up capital is Rs.
5,386,202,[Link] received an ISO Certification in 2010.
In June 2016, the company announced the buyout of the L&T General Insurance for
around Rs 551 crore, this was around 1.1 times the gross premium of the latter. The merger
completed on 23 August 2017.
Housing Development Finance Corporation Limited (HDFC Ltd.) was established in 1977
with the primary objective of meeting a social need of encouraging home ownership by
providing long–term finance to households. Over the last three decades, HDFC has turned
the concept of housing finance for the growing middle class in India into a world–class
enterprise with excellent reputation for professionalism, integrity and impeccable service.
A pioneer and leader in housing finance in India, since inception, HDFC has assisted more
than 38 lakhs customers to own a home of their own, through cumulative housing loan
approvals of over Rs 3.73 trillion and disbursements of over Rs 3.02 trillion as at March
31, 2011. HDFC has a wide network of 351 offices (which includes 91 offices of HDFC's
wholly owned distribution company HDFC Sales Private Limited) catering to over 2,400
towns & cities spread across the country. It also has offices in Dubai, London and
Singapore and service associates in the Middle East region, to provide housing loans and
property advisory services to Non–Resident Indians (NRIs) and Persons of Indian Origin
(PIOs).

HDFC's unrelenting focus on Corporate Governance, high standards of ethics and clarity of
vision, percolate through the organization. Trust, Integrity, Transparency and Professional
Service are the important pillars of the brand HDFC and most importantly, people – both
employees and customers – are its brand ambassadors.
Customer satisfaction is the hallmark of all HDFC offerings. The first touch of HDFC's
personalized service begins as soon as a customer approaches HDFC, and over time it
progresses into a long and meaningful relationship. State–of–the–art information systems
supported by strong in–house training programmes conducted at its specialized training
centre in Lonavla, have equipped HDFC to respond swiftly to the ever–changing customer
needs and thereby empower customers in making the right home buying decision. This is
what sets apart HDFC's customer service philosophy – 'With You, Right Through'.

15
HDFC's specialist team of over 1,600 trained and experienced professionals follows a
'single–window concept' for providing smooth and value added services at all stages. The
team guides the customers right through the entire process of property purchase – be it
property search assistance, technical support prior to finalizing the property, legal advice
on property related documentation, personalized home loan counseling or providing tailor–
made repayment options to suit the customer's specific requirements.
HDFC's wide product range includes loans for purchase and construction of a residential
unit, purchase of land, home improvement loans, home extension loans, non–residential
premises loans for professionals and loan against property, while its flexible repayment
options include Step Up Repayment Facility (SURF) and Flexible Loan Installment Plan
(FLIP).
HDFC also has a robust deposits mobilization programme. HDFC has been able to
mobilize deposits from over 10 lakh depositors. Outstanding deposits grew from Rs 1,458
crores in March 1994 to Rs 24,625 crores in March 2011. In addition, HDFC has received
'AAA' rating for its Deposit products for highest safety from both CRISIL and ICRA for
sixteen consecutive years.
Over the years, HDFC has emerged as a financial conglomerate with its presence in the
entire gamut of financial services including banking, insurance (life and non–life), asset
management, real estate venture capital and more recently education loans. Today, HDFC
is recognized as one of the Best Managed Companies in India and is a model housing
finance company for developing countries with nascent housing finance markets. HDFC
has undertaken several consultancy assignments in various countries across Asia, Africa
and East Europe to support and establish their housing finance institutions. At HDFC,
'Corporate Social Responsibility' has always been an evolving concept, akin to its 'learning
by doing' philosophy. As part of its social objectives, HDFC has always endeavored to
contribute to economic development and social upliftment of the weaker sections of
society and has professionally nurtured each of its social initiative as an investment.
HDFC has undertaken development oriented work and supported several social initiatives
in the areas of education, child welfare, medical research, welfare for the elderly and the
handicapped among several others. HDFC is how millions of Indian families spell the
word 'Home' as the brand not only offers Housing Finance, but also Total Housing
Solutions.

16
Awards and Recognition
ICAI Awards for Excellence in Financial Reporting
HDFC ERGO has been presented an award by ICAI for Excellence in Financial Reporting
2015- 16 under Category IV. It is the 2nd consecutive year, the 4th time in our journey,
that we have been awarded for excellence in financial reporting. It is the only award
presented in the non - life category this year.

SKOCH Order-of-Merit for Claims Survey Management (CMS) for qualifying

amongst the Top 100-projects in India
This SKOCH order of merit is awarded to the ―Top 100 Projects in India‖. The projects are
selected by a Jury of eminent experts and the Secretariat of SKOCH from a large number
of nominations and presentations. HDFC ERGO‘s Claim Survey Management, was
conferred ―SKOCH Order-of-Merit‖ at the 46th Skoch Summit.

Best Customer Experience Award of the Year (Financial Sector) by KamiKaze

This award recognises the efforts undertaken by an organisation in the area of customer
service & customer experience to improve customer relationships and building long term
profitability. The primary parameters considered for this award were; initiatives taken to
simplify customer service processes, use of automation to deliver superior customer
experience and ROI delivered through the changes.

17
ICAI Awards for Excellence in Financial Reporting Annual Report FY 2014-15
under the Category III – Insurance Sector
The award jury comprised of eminent personalities from regulators & industry experts and
was headed by Shri M. Damodaran, Former Chairman of Securities and Exchange Board
of India (SEBI). The parameters for evaluation were on the basis of degree of compliance
with accounting standards, statutory guidelines and other relevant pronouncements, in each
category. Based on the rigorous evaluation process, out of 175 participants, 12 awards
were given; and HDFC ERGO General Insurance Company Limited was the only one to
receive the Gold Shield. We are proud to receive this Gold Shield again after FY 2012-13.

CMS Outstanding Affiliate World-Class Service Award 2015 by Chubb

Multinational Solutions
This award appreciates our efficient services and continued support with Chubb
Multinational [Link] also embarks our outstanding service rendered to the mutual
[Link] award recognizes exceptional performance in the following criteria:
1) Policy issurance and service levels
2) Duration of relationship with Chubb
3) Nomination by Chubb Multinational Account Coordinators
4) Recommendation of affiliate network managers.

18
iAAA rating by ICRA
The Company has been rated iAAA by ICRA (an associate of Moody‘s Investors Service)
indicating highest claim paying ability. This rating denotes company‘s fundamentally
strong position and prospect of meeting policyholder obligations as the best. The rating
takes into account the company‘s strong parentage, its leadership position amongst the
private sector general insurers in the country, balanced and diversified portfolio, prudent
underwriting practice and reinsurance strategy.

ISO Certification
HDFC ERGO has been awarded the ISO 9001:2015 certification for their processes
relating to the below functions:
1) Risk & Loss Mitigation and Cost Management Dept.
This certification validates HDFC ERGO‘s conformity with internationally established
standards for quality systems and assurance in Risk & Loss Mitigation and Cost
Management Function. The certification is a validation of the controls that have been built
in place to ensure that the needs and expectations of customers are met. This certification
ensures that the Company's products and services are the most compliant with the existing
market standards and requirements.
The ISO certification for the above defined Risk & Loss Mitigation and Cost Management
functions have been provided for the below defined scope:
Services related to Implementation of Risk and Loss Mitigation and Cost Management
Strategy related Processes.

19
Processes covered under this certification include :
1) Investigation and Recoveries of referred claims supported by data analytics.
2) Implementation of Fraud management framework of the Company consisting of Anti-
Fraud policy, Whistle blower policy and such related policies supported by analytical
inputs.
3) Carry out due diligence and negotiations with external agencies to reduce cost.

HDFC ERGO has been awarded the ISO 9001:2015 certification for their processes
relating to the below functions:
1) Operations & Services
2) Customer Experience Management
3) Claims Management

This certification validates HDFC ERGO‘s conformity with internationally established

standards for quality systems and assurance in Operations, Claim processing and Customer
Service. The certification is a validation of the controls that have been built in place to
ensure that the needs and expectations of customers are met. This certification ensures that
the Company's products and services are the most compliant with the existing market
standards and requirements.
The ISO certification for the above defined functions have been provided for the below
defined scope:
a) Customer Experience Management – Services related to Resolution of Customer
Queries and Complaints through Call Centre and Related Processes
Processes covered under the CEM certification include:
1) Inbound call center & Email management
2) Quality & Training
3) Grievance Management

b) Claims – Providing Services Pertaining to Claims Lodged by our Customers for our
General Insurance Products through In House Health Claims Services, Network of
Surveyors, Third Party Administrators and other Agencies
Processes covered under the Claims certification include:
1) Motor OD & TP Claims management
2) Management of claims for Retail, Corporate, Travel, Fire Marine & Engineering
3) Health Claims Services

20
c) Operations & Services – Policy Issuance and Servicing of our General Insurance
Products for Retail and Corporate clients and Facilities Management including
Procurement and Administration
Processes covered under the O&S certification include:
1) All central O&S operations, including policy & endorsement issuance for Retail,
Corporate, Bancassurance, Rural Line Operations
2) Logistics Control Unit
3) Branch Operations function including inwarding, premium cheque management, walk-
in customer management, cover note management, policy / endorsement issuance
4) Banking Operations
5) Admin & Procurement including facilities management and branch administration
The locations covered under the certification included the below:
1) Corporate Office, Mumbai
2) Local branches
a) Lower Parel, Mumbai
b) Borivali, Mumbai
c) Bhandup, Mumbai
d) Guindy, Chennai
e) Bangalore
f) Connaught Place, New Delhi
g) Nehru Place, New Delhi

The ISO certification has been provided considering the internal processes of the
organization are in line with the standards required to provide customer satisfaction. It is
also an acknowledgement of the standardization and uniformity of processes being
followed across all branches & locations.
Best Insurance Company in Private Sector - General
HDFC ERGO General Insurance awarded BEST INSURANCE COMPANY IN PRIVATE
SECTOR - GENERAL by the World HRD Congress at ABP NEWS - Banking, Financial
Services & Insurance Awards 2014.
This award underlines the best-of-the-best practices of the BFSI Industry based on the
strategy, security, customer service, and the future technology challenges and
[Link] award has been selected basis customer poll and analysis by a bench of
jury.

21
HDFC ERGO is awarded BEST GENERAL INSURANCE COMPANY in INDIA
by International Alternative Investment Review (IAIR)
The event was organized by The Excellence in Global Economy (4th Edition), Hongkong
on 28th Feb'14. This award was based on an independent survey and was analyzed
considering the Leadership, Innovative Services & ability to be responsive to the
customers' needs with a dynamic approach & a variety of products.

Gold Shield ICAI Awards

for Excellence in Financial Reporting for the year 2012-13
HDFC ERGO has been awarded Gold Shield ICAI Awards for Excellence in Financial
Reporting for the year 2012-13 under the Category III – Insurance Sector by Institute of
Chartered Accountants of India (ICAI). The award has been selected by the panel of judges
on the basis of degree of compliance with the Accounting Standards, Statutory Guidelines
and other relevant pronouncements. Mr. T. S. Vijayan, Chairman, IRDA was the Chairman
of the Jury committee for the award.

HR Excellence through technology award

at Asia's Best Employer Brand Awards 2012

These awards are hosted by Employer Branding Institute, World HRD Congress & stars of
the Industry Group. CMO Asia has been a strategic partner & the awards are endorsed by
Asian Confederation of Businesses. These awards are presented to Individuals and
Organizations who have surpasses levels of excellence and set an example of being a Role
Model & Exemplary Leader. The objective at core is benchmarking talent & HR practices.

BEST GENERAL INSURANCE COMPANY in INDIA

by International Alternative Investment Review (IAIR)
The event was organized by The Excellence in Global Economy (3rd Edition),
Hongkong on 22nd Feb'13. This award was based on an independent survey and was
analyzed considering the Leadership, Innovative Services & ability to be responsive to the
customers' needs with a dynamic approach & a variety of products.

Best Employer Brand Award by IPE BFSI

This award is presented to those who have surpassed levels of excellence and set an
example of being a Role Model & Exemplary Leader in Human Resources. The objective
at core is benchmarking talent & HR practices.
22
Best Investor Education & Category Enhancement – Insurance by UTV Bloomberg -
Financial Leadership Awards 2012
HDFC ERGO is declared as a winner under "Best Investor Education & Category
Enhancement – Insurance" category by UTV Bloomberg - Financial Leadership Awards
2012.
The shortlisting for award in this category was decided based on new innovative products
offered to the policyholders, initiatives taken on educating the existing and prospective
policyholder, ease of navigation on the website, efficient claim support, complaint
resolution rate and the number of complaints received in relation to the market share of the
company. The final call on the winner has been taken by the external Jury. It is a single
award across life and general insurance companies.
HDFC ERGO is awarded for Excellence in General Insurance
Health Insurance by International Alternative Investment Review (IAIR)
The event was organized by The Excellence in Global Economy (4th Edition), Hongkong
on 22nd Nov‘13. This award was based on an independent survey and was analyzed
considering the parameters like Sustainability, Business Results, Strategic Development,
High Quality of Services & Leadership.
ICAI Awards for Excellence in Financial Reporting
HDFC ERGO has been awarded with ICAI Awards for Excellence in Financial Reporting
by Institute of Chartered Accountants of India (ICAI) under the Category IV – Insurance
Sector. The award has been given on the basis of degree of compliance with the accounting
standards, statutory guidelines and other relevant pronouncements. The panel of judges had
reviewed the accounting practices adopted by the participating enterprises in the
preparation of financial statements and the policies adopted for disclosure and presentation
of financial statements and other information in the annual reports without regard to their
financial condition and operating performance.

23
Milestones

 1977 - HDFC ERGO gets incorporated on October 17, 1977

 1978

- The first housing loan was disbursed to D. B. Remedios at Bombay

- The first public issue of equity shares of Rs 10 crore

 1982 â€― The company introduces the Line of Credit product (LOC) for employee
owned housing
 1983 â€― The company signed the implementation agreement of Phase II of the
USAID programme
 1984 - Annual loan approvals cross Rs. 100 crore
 1986 – HDFC ERGO loan approvals cover 1,000 towns
 1987 – HDFC ERGO first Equity Rights Issue
 1988 - Shelter Assistance Reserve was set up with an initial contribution of Rs 50
lakh
 1989 - Home Improvement loans and Home Extension loans
 1990 - Jointly with the United Nations Centre
 1991- Re-launch of Retail Fixed Deposit products
 1992 - Approval loan of £ 25 million
 1993 - Joint venture with GE Capital to promote Countrywide Consumer Financial
Services Ltd. for consumer finance.
 1994 - First private placement of Equity Shares
 1995 - Joint venture with IL&FS
 1996 - The company opens its first international office at Dubai, UAE 1997

- The company gets an Asian Development Bank (ADB) loan of $100 million
- Promotes Delta Brac Housing Finance Corporation Limited

 1998 - Best managed company in India

 1999 - The company invests in a new Housing Finance company in Sri Lank
a [Link] launched

2000 - Joint venture with Mahindra & Mahindra group

- First Mortgage Backed Securities - Joint Venture with TCS
2001 - Figures in the Top 20
- Among the Top 10 Asia's Best Managed Companies

 2002 - HDFC Group's Asset base crosses Rs. 50,000 crores

 2004 - The company signs $200 million loan agreement with International Finance
Corporation (IFC), Washington
 2005 - The company and Barclays signs long term BPO Contract. Barclays now
holds 50% stake in Intelenet, the balance 50% resides with HDFC

2006
- Institute of International Finance hails HDFC's Corporate Governance approach
- 'The Best Presented Accounts'

 2007 - Signing of joint venture by HDFC and ERGO on general insurance

24
HDFC ERGO Achievements.
It is the fourth largest Indian private general insurance company. The Gross Written
Premium for the year 2014-15 was Rs.3257 crores. Another bestowment is the Best
Customer Experience Award of the year by Kami Kaze. CMS Outstanding Affiliate
World-Class Service Award 2015 by Chubb Multinational Solutions also shows the of the
services offered by HDFCERGO general insurance company limited. Moreover, the firm
has received the rating of iAAA by ICRA, which indicates its highest claim paying ability.
Besides recognition for its excellent services, the business model of the company is also
praiseworthy. HDFC ERGO has acquired L&T General Insurance. Through ethical and
dynamic approach, the company aims to be the most admired company in the industry.

HDFC ERGO Online facilities

On the use of websites and applications is on the rise and the technological advance is a
boon for the insurance industries. The usage of the internet to provide services has made
the whole insurance process easier and faster for the customers.
The customers can directly use the HDFCERGO login option on the official website and
conduct various functions online.

All the information about the insurance solutions is available on the website. Visitors to
the HDFC ERGO website or potential customers can make use of the instant chat option to
contact the company's representatives. They will be able to give any information regarding
the policies and services. Also, the Web Pages allow a customer to look up the company's
network hospitals and network garages where they can make cashless claims.

25
 Chapter 03
Products and Services

HDFC ERGO Health Insurance Policy:

Healthcare expenditures are at an all-time high and show no sign of decreasing. Without
adequate health cover, in the event of an unforeseen illness, you may have to shell out your
hard-earned savings leaving you with a financial emergency. Health insurance plans,
therefore, help you overcome this financial emergency by providing an affordable and
comprehensive health cover.

 HDFC ERGO Health Suraksha Policy:

This health insurance plan provides cashless hospitalization and health care facilities
covering in-patient treatment, pre-hospitalization expenses, 144 day-care procedures,
domiciliary treatments and other treatment-related expenses.

 HDFC ERGO Health Suraksha Gold Policy:

HDFC Ergo Health Suraksha Gold is an economical plan which provides cover for in-
patient treatment, pre-hospitalization and post-hospitalization expenses. There are no sub-
limits on hospital room rents, hospital charges, diseases and doctor fees.

 HDFC ERGO Health Suraksha Regain Policy:

HDFC Ergo Health Suraksha Regain offers comprehensive coverage for in-patient
treatment, pre-hospitalization and post-hospitalization expenses, and a unique regain
benefit of automatic availability of sum insured upon its exhaustion.

 HDFC ERGO Health Suraksha Gold Regain Policy:

This is an affordable HDFC Ergo plan covering in-patient treatment, pre and post
hospitalization expenses with no sub-limits on disease, hospital room rents, and other
medical charges. The regain benefit provides automatic availability of basic sum insured
upon exhaustion during the policy year.

 HDFC ERGO Health Suraksha Top Up Policy:

This HDFC Ergo top up plan supplements one‘s existing primary health insurance cover
by insuring one for a larger sum insured limit at lower cost, thereby providing a wider
coverage at a much lesser cost.

 HDFC ERGO Critical Illness Policy:

This Critical Illness policy provides a lump sum amount to cover costs towards treatment,
recuperation aids and also gives additional funds to take care of changes in lifestyle and
loss of income due to decreased ability to earn.

 HDFC ERGO Critical Illness Platinum Policy:

The Critical Illness Platinum plan covers 15 critical illnesses and provides a lump sum
benefit amount on first diagnosis after a 30-day survival period. It covers cost of care,

26
treatment, recuperation aids and provides funds due to change in lifestyle and decreased
ability to earn.

 HDFC ERGO Car Insurance Policy :

These HDFC Ergo car insurance plans enable you to safeguard yourself against loss or
damage to your car in situations like uncertain risk of accident, theft, fire, earthquake, etc.
and provide coverage for the liability that arises out of third party property damage.

 HDFC ERGO Private Car Insurance Policy:

The Private Car Insurance plan is a financial safeguard to protect the car against damages,
theft and natural disasters. It also includes a third party liability, which covers claims by
third party when the insured car damages another person‘s property.

 HDFC ERGO Commercial Vehicle Insurance Policy:

This HDFC Ergo plan offers insurance to a wide range of commercial vehicles, protecting
businesses from financial loss due to accidents or damage to the vehicles, and legal
liability towards third parties for personal injury, death and property damage in case of an
accident involving the insured vehicle.

 HDFC ERGO Third Party Liability Only Insurance Policy:

The third party liability insurance from HDFC Ergo covers legal liabilities arising from
injuries to or damages sustained by third parties from the insured vehicle. The policy is
available for both private and commercial vehicles

 HDFC ERGO Two Wheeler Insurance Policy:

With so much happening around us on the roads, two-wheeler insurance should not be seen
as an additional expenditure, but as a necessity. Buying two-wheeler insurance certainly
helps you reduce your stress, if you find yourself in an unwanted situation.

 Two-Wheeler Insurance:
Purchasing a two-wheeler insurance is mandatory by law and it also provides peace of
mind. HDFC ERGO offers two products – two-wheeler comprehensive insurance and two-
wheeler liability only – multiyear policy.

 HDFC ERGO Home Insurance :

HDFC ERGO General Insurance Company Plans give you the benefit of affordable
coverage for your property and possessions against almost any eventuality.

 HDFC ERGO Home Insurance:

The home insurance policy covers the superstructure as well as the belongings inside the
house for up to 5 years. It also covers against man-made or natural disasters such as fire,
lightning, explosion or implosion, floods, water inundation, storms, riots, strikes,
earthquakes as well as burglary, theft, larceny and terrorism.

 HDFC ERGO Standard Fire and Special Perils Insurance:

27
This is a comprehensive home insurance policy protecting one‘s property and possessions
against almost any eventuality including risk due to fire, lightning, explosion, flood, storm,
riot, strike, terrorism, earthquake, etc.

 HDFC ERGO Travel Insurance:

HDFC ERGO General Insurance Company's plans help you to explore and enjoy new
destinations without any worries.
Travel Insurance Plan:
It is a comprehensive and affordable travel insurance policy for business and leisure travel
offering benefits like cashless hospitalization, instant issue of policy and 24x7 international
helpline assistance without the need for any health check-up. The plan covers medical
expenses, trip cancellation charges, loss due to damage or loss of luggage, flight accidents
and other related expenses on trips abroad. It comes in individual as well as family floater
format. The family floater plan by HDFC ERGO travel insurance covers the insured and
his/her spouse, up to the age of 60 years and a maximum of two children from ages of 3
months onwards until the age of 21 years.
HDFC ERGO Student Travel Insurance:
Student Suraksha is a comprehensive, overseas student travel insurance policy designed for
Indian students (between the ages of 16 and 35 years) studying abroad to ensure their
financial security in case of emergencies.
HDFC ERGO Personal Accident :
A personal accident policy is strongly recommended to everyone not only to protect their
families in the event of a mishap like accidental death, but in addition also to cover
disablement, leading to loss of earning capacity, at competitive premium rates. A personal
accident cover is very effective in making you financially independent and ensures that
you have a dignified future, no matter what happens.
Commercial Insurance
HDFC ERGO General Insurance Company Limited offers a range of commercial
insurance solutions catering to the corporate and business market. Commercial firms can
choose from any of the policies as per their requirements.
Knowledge Series
Specialty Insurance
Property & Misc Insurance
Casualty Insurance
Group Insurance
Rural Insurance
HDFC ERGO General Insurance Company Limited also offers insurance solutions for the
rural customers including farmers, dairy owners and tradesmen.
Agriculture Insurance

28
Cattle Insurance

Chapter 04
HDFC ERGO Latest News

HDFC ERGO General Insurance Company signs SVC Bank as a bancassurance partner
One amongst the top insurance players in India, HDFC ERGO GIC declared its
bancassurance agency tie-up with SVC or Shamrao Vithal Co-operative Bank with intent
to offer an array of non-life insurance products to the existing customers of Shamrao Vithal
Co-operative Bank.
The joint venture combines HDFC ERGO GIC's experience in launching inventive non-life
insurance solutions and products with Shamrao Vithal Co-operative Bank's customer base
spread across various Indian states. Shamrao Vithal Co-operative Bank has 194 offices
spread across 10 Indian states, including Karnataka, Maharashtra, Tamil Nadu, Goa,
Andhra Pradesh, Delhi, Gujarat, Madhya Pradesh, Haryana, and Rajasthan.
Ritesh Kumar, the Chief Executive Officer and Managing Director of HDFC ERGO
General Insurance Company said that this union is a significant landmark for the company
as bancassurance forms an imperative part of this insurer‘s growth plan. He also said that
the company is always attempting to continuously find out new things and make their
products and solutions more extensively available to the customers belonging to all the
segments of the Indian society.
HDFC ERGO purchased L&T General Insurance Company for Rs 551 Crore
HDFC Ergo, the JV between the German insurance provider Ergo International and the
Indian home loan provider HDFC, has declared the purchase of L&T Insurance for an
amount of Rs. 551 Crore. The insurer will complete the purchase in the 1st buyout in the
nation's general insurance market.
In a meeting on Friday, the chairman of HDFC and HDFC Ergo General Insurance
Company stated that this business has signified the inception of the merger phase. He
further added that the united mass and proficiency of the duo will lead to cost effectiveness
of the joint venture and consequently be beneficial for all the stakeholders, including
policyholders. The transaction has been valued at 1.1 times of the gross premium that is 3.9
times of L&T General Insurance Co.‘s book value.
HDFC Ergo General Insurance Company, in order to seek authoritarian approvals for
acquiring complete shares of L&T General Insurance Co., will now have to make an
appeal to the sector regulator, IRDA, and CCI (Competition Commission of India) the fair
trade authority. This acquirement will support HDFC Ergo in becoming the 3rd biggest
private general insurance provider, after Bajaj Allianz and ICICI Lombard, ahead of Iffco
Tokio. The Indian insurance industry is conquered by the public sector insurers United
India, New India Assurance, Oriental Insurance, and National India Insurance Company
HDFC ERGO sets to acquire L&T General Insurance arm
29
HDFC ERGO General Insurance is all set to acquire L&T General Insurance arm in an all-
cash deal of Rs. 551 Crore. This acquisition is going to be the first –of-its kind in the
general insurance market of India. Mr. Deepak Parekh, Chairman, HDFC ERGO (a joint
venture between one of India‘s biggest public sector lender HDFC and ERGO International
from Germany) stated that the company has marked the beginning of the phase of
consolidation with this transaction.
With this acquisition, the company looks forward to benefiting in terms of improved cost
efficiency and benefits to both its customers and stakeholders. After this, HDFC ERGO
aims at applying for getting the regulatory approval in order to acquire complete 100
percent stake of the general insurance company. Standing at 1.1times the gross annual
premium, this deal is 3.9times in terms of the book value of L&T.
HDFC ERGO now has become the third largest general insurance company in the private
sector, following ICICI Lombard General Insurance and Bajaj Allianz, and followed by
Iffco Tokio General Insurance. Owned by the largest Engineering firm in India, L&T
Infotech, L&T General Insurance has been trying to merge with the other small rivals in
the industry to attain size and scale, expanding its network in the future.

HDFC ERGO Honored with ‗Best Customer Experience of the Year‘ Award
HDFC ERGO General Insurance has been awarded the ‗Best Customer Experience of the
Year‘ under the General Insurance category of the Non-Banking industry at the Ninth
Loyalty Awards & Customer Experience Awards. The event was organized by Kami Kaze
B2B Media.
HDFC ERGO was presented the award in recognition of the efforts made by its customer
service team. Also, it recognizes the efforts of the company management in the fields of
Customer Service and Experience, which strives to perk up Customer Delight and empathy
for an individual.
The Executive Director of HDFC ERGO General Insurance, Mr. Mukesh Kumar, said that
receiving the ‗Best Customer Experience Award of the Year‘ is an honour for the company
and it will motivate us on our way to delight our customers uninterruptedly. Providing
satisfactory services to our customers has been our prime motto and we always look
forward to adding onto our services for them.
‘Gold Shield‘ award for HDFC ERGO General Insurance by ICAI
The Institute of Chartered Accountant of India (ICAI) lately awarded HDFC EGRO
General Insurance the Gold Shield award in recognition of the highest standards adhered
by the company with reference to the financial reporting for the FY‘ 2014-15. Among 175
participants, HDFC stood the only private insurance company in India to make it to the
award.
Mr M Damodaran, ex-chairman of Securities and Exchange Board of India, headed the
jury while the award by accepted by CFO, Mr Samir Shah who also is a member of
Executive Management, HDFC ERGO General Insurance Company Limited at a glittering
ceremony on 6 February 2016, held at Kolkata.
Mr Ritesh Kumar, Managing Director and CEO said that being awarded the Gold Shield
award by ICAI for standing out in the vast insurance sector of India is a matter of price and
responsibility in the future for HDFC ERGO General Insurance.
30
HDFC ERGO General Insurance awarded with the Excellence Award for Financial
Reporting by ICAI
Institute of Chartered Accountant of India (ICAI) has honored HDFC ERGO General
Insurance with the Gold Shield award. The award has been presented to recognize the
highest standards in Financial Reporting for the year 2015-15 followed by HDFC ERGO
General Insurance.
HDFC ERGO General Insurance Company Limited was adjudged the best amongst the
175 participant companies. Mr. Samir Shah, CFO and Executive Management Member,
received the award on behalf of HDFC ERGO General Insurance. The award was given
away by the guest of honor Shri. M. Damodaran, Former Chairman of SEBI (Securities
and Exchange Board of India) in a splendid ceremony held in Kolkata on February 06,
2016.
Mr. Ritesh Kumar, Managing Director & Chief Executive Officer at HDFC ERGO General
Insurance Company said that the company has followed the best corporate governance
practices. It is a essence of HDFC Group of companies‘ functioning. It is an element of the
company‘s DNA.
HDFC ERGO Life #ResolveToChange Campaigns Still Going Strong
HDFC ERGO General Insurance Company Limited recently launched #ResolveToChange
campaign to make people aware of the causes of Cancer and give emergency medication to
someone in need. Even heart attacks are quite common nowadays and one must be well-
equipped to save the life of anyone needy.
One must learn the three easy steps of Cardio-Pulmonary Resuscitation, which are very
easy and equivalent to Chest Compression, Airway Cleaning and Breathing Assistance.
Corporate employees work for long hours with high stress, which makes them face issues
like sleep disorder, heart issues, asthma, high blood pressure and more. The insurance
company expects people #ResolveToChange their current lifestyle and live happier for a
long time.
The campaign was initially launched last years and the #ResolveToChange campaign is
still going strong. Another point of discussion is breast cancer in both rural and urban
regions of India. One must be responsible enough to never ignore heath check-ups and stay
regular to them. Those who smoke need to take health check-ups on a serious note, as it is
the biggest risk factor for the lungs.
Impact of the merger between HDFC Ergo and L&T Insurance
The existing policyholders will now be offered with more insurance products and a broader
network of motor workshops and hospitals. HDFC Ergo General Insurance Company,
during a board meeting conducted on 3rdJune, 2016, grated its approval for the
procurement of L&T General Insurance Company.
As a result of this merger the companies will rationalize their products. This is because
HDFC Ergo might want take interest in similar products. In non-life insurance industry,
most of the insurance products by almost every insurer are considerably similar and boast
minor dissimilarities, excluding the case of health and accident.
The CEO and managing director of HDFC Ergo General Insurance Company, said that the
company will rationalize its products after this union and after thoroughly studying and
discussing the entire matter with the with distribution channels. He also said that with
31
respect to the additional covers, the company will keep its complete suite for its customers‘
benefits. Also, with regards to the claims, the change for the existing customers will be
steady upon renewal.

Chapter 05

Introduction

ICICI Lombard General Insurance Company Limited is one of the leading private sector
general insurance companies in India. It is engaged in general insurance, reinsurance,
insurance claims management and investment management. The company has a Gross
Written Premium (GWP) of Rs 109.60 billion (FY 2017). The firm offers policy insurance
and renewal through its intermediaries and website. It markets assurance products
including Car Insurance, Health Insurance, International Travel Insurance, Overseas
Student Travel Insurance, Two Wheeler Insurance, Home Insurance and Weather
insurance. ICICI Lombard has 249 branches spread across the nation.

At ICICI Lombard, customer centricity is the cornerstone of our culture. Stretching

ourselves and going beyond the ordinary, for the satisfaction and smiles of our customers,
is deeply embedded in our DNA. Whether our customers face an untoward incident due to
the unpredictability of nature, suffer losses due to accidents or face medical challenges, we
remain committed to be at their side and serve them in their hard times.

The 2015 Chennai floods affected the lives of hundreds of people and caused widespread
damage. In the face of such unexpected events, our team continues to work towards our
goals without losing focus. Reaching out and reassuring customers by going the extra mile,
reinstating normalcy as fast as possible, we remained steadfast in reducing emotional
trauma and the impact of loss. Fast, fair and friendly as always, we put our customers‘
needs above all.

32
Our value proposition is driven by a promise to be the best partner for our customers.
Simply put, it means providing unmatched services. This deep and unceasing commitment
to our customers guides us to do things right, every time. It inspires us to evolve our
services every day, from small modifications to major changes. For us, customer
satisfaction is a promise to be lived every day, because our customers‘ peace of mind is our
greatest reward.

ICICI Lombard is the largest private‐sector non‐life insurer in India based on gross direct
premium income (GDPI) in FY17, a position that they have maintained since. FY04 after
commencing operations in FY01. They were founded as a JV between ICICI Bank Limited
and Fairfax Financial Holdings Limited, a Canadian based holding company. After the
stake sale via IPO, Fairfax will then become a financial investor in the company.

ICICI Lombard enjoys market share of 8.4% among all non‐life insurers in India and18.0%
among private‐sector non‐life insurers in India on GDPI basis. It continues to grow faster
than the industry with GDPI growing at CAGR of 26.7% from FY15 toFY17 compared to
CAGR of 22.8% for Indian non‐life insurance industry. As a result,

Its market share increased from 7.9% in FY15 to 8.4% in FY17. They offer their
customers a comprehensive and well‐diversified range of products, including motor,
health, crop/weather, fire, personal accident, marine, engineering and liability insurance
through multiple distribution channels. They maintain a leadership position among private
sector non‐life insurer in India across motor (own damage and third party liability), health
and personal accident, crop/weather, fire, engineering and marine insurance since FY15.
The key distribution channels are direct sales, individual agents, bank partners, other
corporate agents, brokers, and digital through which they service individual, corporate and
government customers. It has a strong capital position with a solvency ratio of 2.10x as at
March 31, 2017compared to the IRDAI‐prescribed control level of 1.50x, and an Indian
non‐life private‐sector average of 1.96x. Their management team has extensive experience
and know‐how in the India insurance industry. The quality of the management team has
been critical in achieving strong business performance.

ICICI Lombard General Insurance Company, is a private sector general insurance

company in India. It was the largest private-sector non-life insurer in India based on gross
direct premium income in fiscal 2017, a position it has maintained since fiscal 2004 after
being one of the first few private-sector companies to commence operations in the sector in
fiscal 2002, according to the CRISIL Report. It offers customers a comprehensive and
33
well-diversified range of products, including motor, health, crop/weather, fire, personal
accident, marine, engineering and liability insurance, through multiple distribution
channels. It has a Gross Written Premium (GWP) of Rs 109.60 billion for the year ended
March 31, 2017. The company issued over 17.7 million policies and settled over 2.18
million claims as on March 31, 2017.

History and Origin

The ICICI LTD. was established in 1995 by the World bank, the government of India and
the Indian industry, to promote industrial development of India by providing project and
cooperate finance to Indian industry. Since inception, ICICI has grown from a
development bank to a financial conglomerate and has become one of the largest financial
institution in India. ICICI has thus far financed all major sector of the economy, covering
6,848 companies and 16,851 projects.

Lombard Canada Ltd. , is a leading insurance management company responsible for

providing insurance management services for all the Lombard group commercials,
personal, and specialized insurance companies. Canadian owned and operated, Lombard
Canada Ltd. Has its own head office in Toronto and has annual sales in excess of $500
million and its wholly owned subsidiary of Fairfax Financial holdings Limited ( FFH on
the TSF Lombard Canada Ltd. Has achieved a reputation for providing solid underwritings
performance, diversified books of business and strong capital positions.

ICICI Lombard offers a comprehensive and well-diversified range of products, including

motor, health, crop/weather, fire, personal accident, marine, engineering and liability
insurance, through multiple distribution channels.

ICICI Lombard was founded as a joint venture between ICICI Bank Ltd and Fairfax
Financial Holdings Ltd, a Canada based holding company which, through its subsidiaries,
is engaged in property and casualty insurance and reinsurance & investment management
with US$43.38 billion of total assets as of December 31, 2016.

Lombard is the largest private-sector non-life insurer in India based on gross direct
premium income (GDPI) in FY17. This position has been maintained since FY04 after
being one of the first few private sector companies to commence operations in the sector in
34
FY01. Lombard continued to grow faster than the industry, with GDPI growing at 26.7%
CAGR from FY15 to FY17, as compared to 22.8% CAGR for the Indian non-life
insurance industry in the same period.

Chapter 06

Product profile

ICICI Lombard offers customers a comprehensive and well-diversified range of products,

including motor, health, crop/weather, fire, personal accident, marine, engineering and
liability insurance catering to individual as well as corporate customers.

Motor insurance

Motor insurance consists of coverage of private motor cars, two-wheelers and commercial
vehicles. Motor insurance in India can be broadly divided into two categories: own damage
and third-party. Own damage motor insurance protects a vehicle owner from damage or
theft to his/her own motor vehicle and is optional. On the other hand, third-party motor
insurance, which protects all third parties from damages suffered due to an accident
involving a motor vehicle, must be purchased by every motor vehicle owner in India
pursuant to the Motor Vehicles Act, 1988, as amended. ICICI Lombard‘s GDPI from
motor insurance increased from | 34.16 billion in FY15 to | 45.42 billion in FY17,
representing a CAGR of 15.3%. Motor insurance accounted for 51.2%, 51.3% and 42.3%
of GDPI in FY15, FY16 and FY17, respectively.

Health insurance

The health insurance portfolio consists of corporate health, mass health and retail health
insurance. The corporate health segment consists of policies purchased by corporates,
including SMEs, as employee benefits. The mass health segment consists of participation
in central and state government health programmes including Rashtriya Swasthya Bima
Yojana (RSBY). The retail health segment consists of sales to individuals broadly divided
into two categories - benefit-based and indemnity-based policies. Lombard‘s GDPI from
35
health insurance increased from | 13.18 billion in FY15 to | 16.68 billion in FY17,
representing a CAGR of 12.5%. Health insurance accounted for 19.7%, 17.1% and 15.5%
of GDPI in FY15, FY16 and FY17, respectively.

Personal accident insurance

Personal accident insurance provides benefit-based coverage to policyholders for accidents

suffered by them. This insurance is offered to corporate as well as retail customers. For
Lombard, personal accident insurance GDPI increased from | 2.33 billion in FY15 to | 3.58
billion in FY17, representing a CAGR of 24.0%. Personal accident insurance accounted for
3.5%, 3.4% and 3.3% of GDPI in FY15, FY16 and FY17, respectively.

Crop/weather insurance

Crop/weather insurance is purchased by farmers to protect themselves against a reduction

in their crop yield or loss of their crops due to natural phenomena like inadequate or
excessive rainfall, hailstorm, landslides and variation in temperature and humidity.
Lombard participates in two major crop-insurance related government programmes, the
Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop
Insurance Scheme (RWBCIS). Crop/weather insurance accounted for 4.1%, 7.3% and
20.1% of GDPI in FY15, FY16 and FY17, respectively. GDPI from crop/weather
insurance increased from | 2.76 billion in FY15 to | 21.51 billion in FY17, representing a
CAGR of 179.3%. The large growth in FY17 was due to implementation of PMFBY
programme by central and state governments.

Fire insurance

Fire insurance covers damage or loss to property because of fire, riot, strike, earthquake,
storm, flood, and certain other natural catastrophes. For Lombard, GDPI from fire
insurance increased from | 5.45 billion in FY15 to | 7.45 billion in FY17, representing a
CAGR of 16.9%. Fire insurance accounted for 8.2%, 7.8% and 6.9% of GDPI in FY15,
FY16 and FY17, respectively.

Other insurance products

Apart from the above-mentioned, other insurance products by Lombard consist of marine
insurance (insures goods that are being transported, by land or by sea, and the insurance of
ships, boats and offshore structures), Engineering insurance (insurance that provides
coverage for risks faced by an ongoing construction project, installation project, and
machines and equipment used in such project), travel insurance, aviation insurance, etc.

36
 Chapter 07
Competitive Strengths

We believe the following competitive strengths contribute to our success and position us
well for future growth.

Consistent market leadership and demonstrated growth

We were the largest private-sector non-life insurer in India, by GDPI in fiscal 2017, a
position we have maintained through various cycles of industry evolution since fiscal
2004. We became the first private-sector non-life insurer in India to reach ₹ 100.00 billion
in GDPI in fiscal 2017. We continue to grow faster than the industry, with our GDPI
growing at a CAGR of 26.7% from fiscal 2015 to fiscal 2017, as compared to a CAGR of
22.8% for the Indian non-life insurance industry in the same period. As a result, our market
share, by GDPI, increased from 7.9% in fiscal 2015 to 8.4% in fiscal 2017. Our industry
leadership has been reinforced by our comprehensive and diverse portfolio of insurance
products that we continuously adapt to evolving needs of customers and changing industry
dynamics. We have maintained a leadership position among private sector non-life insurer
in India across motor (own damage and third party liability), health and personal accident,
crop/weather, fire, engineering and marine insurance, since fiscal 2015. A strong brand and
partnerships with various stakeholders have contributed to this growth. We believe that we
have leveraged the established brand of our Promoter, ―ICICI Bank‖, to build ―ICICI
Lombard‖ into a recognised and trusted brand in its own right.

Diverse product line with multi-channel distribution network

Diverse and Customised Product Line. We continue to reinforce our industry leadership by
offering products and solutions that address the untapped and evolving needs of customers
and we have established ourselves as a reliable one-stop insurer for diverse customer
requirements. We have a diversified composition of insurance products with motor, health
and personal accident, crop/weather, fire, marine, and engineering insurance contributing
42.3%, 18.9%, 20.1%, 6.9%, 3.2% and 2.1%, respectively, of our GDPI in fiscal 2017. We
create and offer bespoke products tailored to the requirements of our customers. For
example, we were among the first Indian insurers to offer parameterized weather-based
crop insurance and long-term twowheeler motor vehicle insurance policies.

Multi-channel Distribution Network. We distribute our products:

 through 48 corporate agents as at March 31, 2017, including our Promoter – ICICI Bank
– which gives us access to its 4,850 branches;

37
 to customers of over 80% of the motor vehicle manufacturers (MVMs), by vehicle sales,
in India in fiscal 2017, including Maruti Suzuki India Limited (Maruti);

 through 20,383 individual agents as at March 31, 2017;

 through our digital platform, through which we issued 1.6 million policies in fiscal 2017;
and

 using a strong direct sales channel, which contributed 43.2% of our GDPI in fiscal 2017.

We believe our diversified channel mix enables us to reach customers in 618 out of 716
districts across India and provides us with a competitive edge.

Diverse Customer Profile. This multi-channel distribution network enables us to offer our
products to a diverse set of customers, including large and mid-sized corporates, small and
medium-sized enterprises (―SMEs‖), central and state governments, and individuals. Over
the years, we have moved from a largely corporate focussed business model to a more
diversified mix of business. In fiscal 2017, our retail (including SME), corporate and
government business groups contributed 60.4%, 17.5% and 22.1% of our GDPI,
respectively.

Delivering excellence in customer value

Our customer-centric approach to delivering value focuses on providing convenience and

superior claims settlement. For our corporate customers, we also focus on direct
engagement and customised solutions, which include working with our customers to
proactively analyse and mitigate risks.

Based on our approach of being fair, fast and friendly, we have in-housed our claims
management process for most of our motor, health and personal accident segments. By
adopting technology-enabled solutions, our claims management process empowers
customer-facing employees and helps eliminate redundant internal processes. 67 We also
moved our call centre in-house in fiscal 2015, and created a proprietary customer
relationship team (―CRT‖). The CRT serves as a crucial point of contact for customers to
experience our brand and service and helps us create long-lasting relationships.

As a result of these measures, our first call resolution rates have increased from 67.8% in
fiscal 2015 to 85.3% in fiscal 2017. We paid 92.2% of our motor own damage insurance
claims in fiscal 2017 within 30 days, as compared to an Indian non-life private-sector
average of 81.9%. We also paid 99.3% of our health insurance claims in fiscal 2017 within
30 days, as compared to an Indian non-life private-sector average of 85.2%. The number of
grievances received by us reduced from 5,704 in fiscal 2015 to 3,515 in fiscal 2017,
despite the increase in number of policies written from 13.9 million to 17.7 million in the
same time period.

Robust risk selection and management framework

38
We recognise that risk is an integral element of our business and minimising as well as
managing risk is essential for shareholder value creation and we believe that our strong risk
selection and mitigation capabilities are a significant competitive advantage. We take a
holistic approach to risk management, which includes a data-driven risk selection
framework, conservative reserving, and quality reinsurance.

Having operated in the industry since fiscal 2001, we have accumulated a wealth of data
pertaining to critical risk parameters that has helped us identify favourable product and
customer segments and sub-segments. We update such risk parameters based on further
loss experience and use these parameters in our underwriting and pricing decisions. For
example, in motor insurance, our strategy is to focus on the two-wheeler and private car
segments along with an identified preferred sub-segment of commercial vehicles. Our
share of losses incurred from each catastrophic event since fiscal 2013 has been in the
range of 1.5%- 6.4%, while our overall market share, by GDPI, has been higher than 7.8%
during the same time period.

Our conservative reserving philosophy is exemplified by the ratio of our reserves (as at
March 31, 2017) to net earned premium (for the period from fiscal 2013 to 2017) of
64.9%, as compared to the Indian non-life private-sector average of 50.6% for the same
date and period. As per guidelines issued by the IRDAI, non-life insurers in India are not
allowed to discount their reserves. We test our reserves regularly based on new loss
experience, claim inflation and other factors. We are the only non-life insurer in India to
disclose reserving triangles as part of our annual report and have disclosed these since
fiscal 2016.

We have in place a reinsurance policy, which defines the product-wise retention limits on a
per-risk and a per-event basis. We use a high-quality panel of re-insurers rated A- (S&P or
equivalent international rating) or above, including GIC Re, Scor Re, Munich Re,
Hannover Re, Swiss Re, Lloyds, and XL Catlin.

Focus on investments in technology and innovation

We believe that we are at the forefront of leveraging technology in the Indian non-life
insurance industry. Our excellence in products and services is backed by a robust
technology infrastructure, and user-friendly web and mobile applications for our
customers, employees and distributors from sales to claims settlement. We have created a
plug-and-play architecture so that we can integrate our systems with distributors quickly.

Our ability to integrate multiple distribution partners seamlessly with our systems and
processes has helped increase efficiency in our business. We have directly integrated point
of sale systems of certain bus companies, railways and airlines with our policy booking
and issuance systems to provide low-coverage travel insurance for their customers. For
example, we are one of the three non-life insurance partners of Indian Railway Catering
and Tourism Corporation (IRCTC), covering over 300,000 trips per day as of March 31,
2017.

39
In fiscal 2017, 87.5% of the total 17.7 million policies were initiated on our digital
platform, either by our distributors or our customers. This helped improve our employee
productivity, measured in terms of GDPI per employee, from ₹ 11.4 million in fiscal 2015
to ₹ 16.6 million in fiscal 2017, representing a CAGR of 20.7%.

Strong investment returns on a diversified portfolio

Our investment management philosophy is to earn investment returns commensurate with

the risks undertaken, following the principle of capital preservation and a total income
approach. Investments are selected based on value investing principles and are diversified
so as to minimize the risk of loss.

Our asset allocation strategy ensures liquidity, security and diversification. Our asset mix is
determined by two important factors: achieving superior total returns and liquidity
management for claim obligations. Our investments from time to time include debt,
equities, mutual funds, real estate and other alternative investments. As of March 31, 2017,
29.7% of our total investment assets, by carrying value, were held in government
securities, 41.8% in corporate bonds, 17.0% in equities, and the remaining in other
investments.

Our total investment assets increased from ₹ 102.00 billion on March 31, 2015 to ₹ 150.79
billion on March 31, 2017, making us the private-sector non-life insurer with the largest
total investment assets in India. Our investment leverage, net of borrowings, has increased
from 3.51x in fiscal 2015 to 3.92x in fiscal 2017 while our net worth increased by 28.2%
over the same period.

We have achieved an annualised total portfolio return (including unrealised gains) of

18.0%, 8.8% and 13.0%, and an annualised realised return of 10.4%, 10.3% and 10.0% for
fiscal 2015, 2016 and 2017, respectively. Since fiscal 2004, our listed equity portfolio has
returned an annualised total return of 30.8%, as compared to an annualised return of 17.5%
on the benchmark S&P NIFTY index. During the same time period, our equity portfolio
outperformed the S&P NIFTY index in all but one fiscal year.

Superior operating and financial performance Solvency.

We have a strong capital position with a solvency ratio of 2.10x as at March 31, 2017
compared to the IRDAI prescribed control level of 1.50x, and an Indian non-life private-
sector average of 1.96x. We have an internal solvency framework wherein risks in excess
of a defined threshold impacting solvency are underwritten only with the approval of the
Risk Committee of our Board. We were the first non-life insurer in India to issue non-
convertible debentures – we raised ₹ 4.85 billion through the issue of our Debentures in
fiscal 2017, which are rated AAA (domestic credit rating) by CRISIL Limited and ICRA
Limited. This amount is available for the purpose of solvency calculations.

Operating metrics. Our combined ratio has been generally stable, improving from 104.9%
in fiscal 2015 to 104.1% in fiscal 2017. During the same time period, our loss ratio
improved from 81.4% to 80.6%. We believe that our disciplined operation, coupled with
40
our technology platform, allows us to operate at lower cost than many of our competitors.
Our net expense ratio was 23.5% in fiscal 2017.

Profitability and return. We have an established track record of delivering annual returns to
shareholders and our return on equity has exceeded 15.5% for each fiscal year since fiscal
2015. Our profit after tax and our return on equity were ₹ 6.22 billion and 16.7%,
respectively in fiscal 2017. We paid out 18.0%, 32.0% and 30.4% of our profit after taxes
in the form of dividends (including dividend distribution tax) in fiscal 2015, 2016 and
2017, respectively.

Experienced senior management team and enabling work culture

Our management team has extensive experience and know-how in the Indian insurance
industry. We believe the quality of our management team has been critical to achieving our
strong business performance. Our Managing Director and CEO, Bhargav Dasgupta, has
been with us for over eight years. He has over 25 years of experience in the insurance and
banking sectors. The overall average work experience of our senior management members
(including executive directors) is approximately 24 years with eight out of nine members
having an average experience of approximately 17 years within the ICICI Group.

We believe that our management‘s experience is instrumental to our ability to quickly

respond to evolving customer needs and market conditions. In addition to our experienced
management team, we believe that our enabling work culture is a key factor to our success.
Our entrepreneurial culture is reflected by a high level of employee ownership and positive
attitude towards accomplishment with speed and efficiency.

Consistent market leadership and demonstrated growth

We were the largest private-sector non-life insurer in India, by GDPI in fiscal 2017, a
position we have maintained through various cycles of industry evolution since fiscal
2004. We became the first private-sector non-life insurer in India to reach ₹ 100.00 billion
in GDPI in fiscal 2017.

We continue to grow faster than the industry, with our GDPI growing at a CAGR of
26.7% from fiscal 2015 to fiscal 2017, as compared to a CAGR of 22.8% for the Indian
non-life insurance industry in the same period. As a result, our market share, by GDPI,
increased from 7.9% in fiscal 2015 to 8.4% in fiscal 2017.

Our industry leadership has been reinforced by our comprehensive and diverse portfolio of
insurance products that we continuously adapt to evolving needs of customers and
changing industry dynamics. We have maintained a leadership position among private
sector non-life insurer in India across motor (own damage and third party liability), health
and personal accident, crop/weather, fire, engineering and marine insurance, since fiscal
2015.

A strong brand and partnerships with various stakeholders have contributed to this growth.
We believe that we have leveraged the established brand of our Promoter, ―ICICI Bank‖,
to build ―ICICI Lombard‖ into a recognised and trusted brand in its own right.

41
Diverse product line with multi-channel distribution network Diverse and
Customised Product Line.

We continue to reinforce our industry leadership by offering products and solutions that
address the untapped and evolving needs of customers and we have established ourselves
as a reliable one-stop insurer for diverse customer requirements. We have a diversified
composition of insurance products with motor, health and personal accident, crop/weather,
fire, marine, and engineering insurance contributing 42.3%, 18.9%, 20.1%, 6.9%, 3.2%
and 2.1%, respectively, of our GDPI in fiscal 2017. We create and offer bespoke products
tailored to the requirements of our customers. For example, we were among the first Indian
insurers to offer parameterized weather-based crop insurance and long-term twowheeler
motor vehicle insurance policies.

Multi-channel Distribution Network. We distribute our products:

 through 48 corporate agents as at March 31, 2017, including our Promoter – ICICI Bank
– which gives us access to its 4,850 branches;

 to customers of over 80% of the motor vehicle manufacturers (MVMs), by vehicle sales,
in India in fiscal 2017, including Maruti Suzuki India Limited (Maruti);

 through 20,383 individual agents as at March 31, 2017;

 through our digital platform, through which we issued 1.6 million policies in fiscal 2017;
and

 using a strong direct sales channel, which contributed 43.2% of our GDPI in fiscal 2017.

We believe our diversified channel mix enables us to reach customers in 618 out of 716
districts across India and provides us with a competitive edge.

Diverse Customer Profile. This multi-channel distribution network enables us to offer our
products to a diverse set of customers, including large and mid-sized corporates, small and
medium-sized enterprises (―SMEs‖), central and state governments, and individuals. Over
the years, we have moved from a largely corporate focussed business model to a more
diversified mix of business. In fiscal 2017, our retail (including SME), corporate and
government business groups contributed 60.4%, 17.5% and 22.1% of our GDPI,
respectively.

Delivering excellence in customer value

Our customer-centric approach to delivering value focuses on providing convenience and

superior claims settlement. For our corporate customers, we also focus on direct
engagement and customised solutions, which include working with our customers to
proactively analyse and mitigate risks. Based on our approach of being fair, fast and
friendly, we have in-housed our claims management process for most of our motor, health
and personal accident segments. By adopting technology-enabled solutions, our claims
management process empowers customer-facing employees and helps eliminate redundant
internal processes.
42
We also moved our call centre in-house in fiscal 2015, and created a proprietary customer
relationship team (―CRT‖). The CRT serves as a crucial point of contact for customers to
experience our brand and service and helps us create long-lasting relationships. As a result
of these measures, our first call resolution rates have increased from 67.8% in fiscal 2015
to 85.3% in fiscal 2017.

We paid 92.2% of our motor own damage insurance claims in fiscal 2017 within 30 days,
as compared to an Indian non-life private-sector average of 81.9%. We also paid 99.3% of
our health insurance claims in fiscal 2017 within 30 days, as compared to an Indian non-
life private-sector average of 85.2%.

The number of grievances received by us reduced from 5,704 in fiscal 2015 to 3,515 in
fiscal 2017, despite the increase in number of policies written from 13.9 million to 17.7
million in the same time period.

Robust risk selection and management framework

We recognise that risk is an integral element of our business and minimising as well as
managing risk is essential for shareholder value creation and we believe that our strong risk
selection and mitigation capabilities are a significant competitive advantage. We take a
holistic approach to risk management, which includes a data-driven risk selection
framework, conservative reserving, and quality reinsurance.

Having operated in the industry since fiscal 2001, we have accumulated a wealth of data
pertaining to critical risk parameters that has helped us identify favourable product and
customer segments and sub-segments. We update such risk parameters based on further
loss experience and use these parameters in our underwriting and pricing decisions. For
example, in motor insurance, our strategy is to focus on the two-wheeler and private car
segments along with an identified preferred sub-segment of commercial vehicles. Our
share of losses incurred from each catastrophic event since fiscal 2013 has been in the
range of 1.5%- 6.4%, while our overall market share, by GDPI, has been higher than 7.8%
during the same time period.

Our conservative reserving philosophy is exemplified by the ratio of our reserves (as at
March 31, 2017) to net earned premium (for the period from fiscal 2013 to 2017) of
64.9%, as compared to the Indian non-life private-sector average of 50.6% for the same
date and period. As per guidelines issued by the IRDAI, non-life insurers in India are not
allowed to discount their reserves. We test our reserves regularly based on new loss
experience, claim inflation and other factors. We are the only non-life insurer in India to
disclose reserving triangles as part of our annual report and have disclosed these since
fiscal 2016. We have in place a reinsurance policy, which defines the product-wise
retention limits on a per-risk and a per-event basis. We use a high-quality panel of re-
insurers rated A- (S&P or equivalent international rating) or above, including GIC Re, Scor
Re, Munich Re, Hannover Re, Swiss Re, Lloyds, and XL Catlin.

Focus on investments in technology and innovation

43
We believe that we are at the forefront of leveraging technology in the Indian non-life
insurance industry. Our excellence in products and services is backed by a robust
technology infrastructure, and user-friendly web and mobile applications for our
customers, employees and distributors from sales to claims settlement. We have created a
plug-and-play architecture so that we can integrate our systems with distributors quickly.

Our ability to integrate multiple distribution partners seamlessly with our systems and
processes has helped increase efficiency in our business. We have directly integrated point
of sale systems of certain bus companies, railways and airlines with our policy booking
and issuance systems to provide low-coverage travel insurance for their customers. For
example, we are one of the three non-life insurance partners of Indian Railway Catering
and Tourism Corporation (IRCTC), covering over 300,000 trips per day as of March 31,
2017.

In fiscal 2017, 87.5% of the total 17.7 million policies were initiated on our digital
platform, either by our distributors or our customers. This helped improve our employee
productivity, measured in terms of GDPI per employee, from ₹ 11.4 million in fiscal 2015
to ₹ 16.6 million in fiscal 2017, representing a CAGR of 20.7%.

Our commitment to technology and innovation is illustrated by the following

accomplishments:

 Since fiscal 2012, we have undertaken motor surveys digitally through the use of tablets.
In fiscal 2017, 91.4% of our motor own damage claims were surveyed through use of
tablets. We have also enabled motor vehicle service centres to send us video streams
through our mobile application so that we can survey claims remotely;

 Our agency application helps our individual agents issue policies to customers on-the-go;

 We have created a mobile application ―Risk Inspect‖ to enable us to conduct virtual risk
inspections for fire and engineering policies;

 We use drones for inspecting wind turbine and solar photovoltaic modules to identify
defects and improve efficiency; 68

 We have automated various internal processes through the use of robotics;

 We have set up a programme ‗NOVA‘ to engage with the start-up community. We

identify and work with start-ups that provide us with innovative risk mitigation solutions
and potential business opportunities;

 We launched a ―chatbot‖ that leverages natural language processing to converse with

customers and automatically issue two-wheeler motor insurance policies; and

 We are investing in artificial intelligence and machine learning to help increase

operational efficiencies and manage risks effectively.

Strong investment returns on a diversified portfolio

44
Our investment management philosophy is to earn investment returns commensurate with
the risks undertaken, following the principle of capital preservation and a total income
approach. Investments are selected based on value investing principles and are diversified
so as to minimize the risk of loss.

Our asset allocation strategy ensures liquidity, security and diversification. Our asset mix is
determined by two important factors: achieving superior total returns and liquidity
management for claim obligations. Our investments from time to time include debt,
equities, mutual funds, real estate and other alternative investments.

As of March 31, 2017, 29.7% of our total investment assets, by carrying value, were held
in government securities, 41.8% in corporate bonds, 17.0% in equities, and the remaining
in other investments. Our total investment assets increased from ₹ 102.00 billion on March
31, 2015 to ₹ 150.79 billion on March 31, 2017, making us the private-sector non-life
insurer with the largest total investment assets in India. Our investment leverage, net of
borrowings, has increased from 3.51x in fiscal 2015 to 3.92x in fiscal 2017 while our net
worth increased by 28.2% over the same period.

We have achieved an annualised total portfolio return (including unrealised gains) of

18.0%, 8.8% and 13.0%, and an annualised realised return of 10.4%, 10.3% and 10.0% for
fiscal 2015, 2016 and 2017, respectively. Since fiscal 2004, our listed equity portfolio has
returned an annualised total return of 30.8%, as compared to an annualised return of 17.5%
on the benchmark S&P NIFTY index. During the same time period, our equity portfolio
outperformed the S&P NIFTY index in all but one fiscal year.

Superior operating and financial performance Solvency.

We have a strong capital position with a solvency ratio of 2.10x as at March 31, 2017
compared to the IRDAI prescribed control level of 1.50x, and an Indian non-life private-
sector average of 1.96x. We have an internal solvency framework wherein risks in excess
of a defined threshold impacting solvency are underwritten only with the approval of the
Risk Committee of our Board. We were the first non-life insurer in India to issue non-
convertible debentures – we raised ₹ 4.85 billion through the issue of our Debentures in
fiscal 2017, which are rated AAA (domestic credit rating) by CRISIL Limited and ICRA
Limited. This amount is available for the purpose of solvency calculations.

Operating metrics. Our combined ratio has been generally stable, improving from 104.9%
in fiscal 2015 to 104.1% in fiscal 2017. During the same time period, our loss ratio
improved from 81.4% to 80.6%. We believe that our disciplined operation, coupled with
our technology platform, allows us to operate at lower cost than many of our competitors.
Our net expense ratio was 23.5% in fiscal 2017.

Profitability and return. We have an established track record of delivering annual returns to
shareholders and our return on equity has exceeded 15.5% for each fiscal year since fiscal
2015. Our profit after tax and our return on equity were ₹ 6.22 billion and 16.7%,
respectively in fiscal 2017. We paid out 18.0%, 32.0% and 30.4% of our profit after taxes
45
in the form of dividends (including dividend distribution tax) in fiscal 2015, 2016 and
2017, respectively.

Experienced senior management team and enabling work culture

Our management team has extensive experience and know-how in the Indian insurance
industry. We believe the quality of our management team has been critical to achieving our
strong business performance. Our Managing Director and CEO, Bhargav Dasgupta, has
been with us for over eight years. He has over 25 years of experience in the insurance and
banking sectors. The overall average work experience of our senior management members
(including executive directors) is approximately 24 years with eight out of nine members
having an average experience of approximately 17 years within the ICICI Group.

We believe that our management‘s experience is instrumental to our ability to quickly

respond to evolving customer needs and market conditions. In addition to our experienced
management team, we believe that our enabling work culture is a key factor to our success.
Our entrepreneurial culture is reflected by a high level of employee ownership and positive
attitude towards accomplishment with speed and efficiency.

Our Strategies

Our objective is to achieve a market leadership position among both public and private-
sector non-life insurers in India through profitable growth. In order to achieve our goals,
we plan to pursue the following strategies:

Leverage and enhance market leadership

The Indian economy and non-life insurance industry promise strong growth prospects. We
intend to capitalize on this market opportunity by implementing the followings measures:

 leverage the competitive advantage provided to us by our scale and our proprietary data
sets;

 expand our customer base while maintaining profitability through prudent risk selection;

 expand our offerings of value added services to our customers by having a deeper
understanding of the risks faced by the customer;

 leverage our strong brand to reach broader customers segments in different geographical
regions; and

 capitalize on the broad network of our distribution partners, including ICICI Bank.

Enhance product offerings and distribution channels

We are constantly looking at new opportunities in all of our insurance segments. We plan
to enhance our distribution architecture by expanding our multi-channel distribution, while
46
strengthening existing channels and relationships. We will continue to innovate to design
new products and value added services and solutions to cater to the varying needs of our
existing and potential customers. We aim to:

 grow our GDPI from insurance policies sold through individual agents as such channel
offers significant opportunities for GDPI growth with better combined ratios.

 continue to invest in our retail health segment. We will offer innovative indemnity-based
products to a broad base of customers along with independent advisory and health
assistance services, thereby increasing the competitiveness and attractiveness of our
indemnity-based health insurance products.

 capture increasing opportunities created by the growth in the SME insurance market by
enhancing our distribution footprint and providing convenience through increased
automation.

 invest in data enrichment and analytics to better cross-sell our individual customers.

Capture new market opportunities

We shall continue to proactively monitor and respond quickly to new market opportunities.
Our robust risk management framework, strong reserve position, and healthy solvency
ratio give us a competitive advantage when participating in new market opportunities. We:

 have previously been able to quickly react to significant market opportunities and will
continue to do so in the future. For example, when the PMFBY programme became
operational in fiscal 2017, we grew our GDPI from crop/weather insurance from ₹ 5.93
billion in fiscal 2016 to ₹ 21.51 billion in fiscal 2017.

 have set up a dedicated sales team to capture the untapped potential in small towns and
rural areas, in light of the low penetration of the Indian non-life insurance market. We shall
further develop our virtual offices and other digital capabilities to enhance service to such
geographies.

 will continue to monitor both regulatory and market developments in emerging risk
segments, including home and cyber insurance, to take advantage of opportunities as and
when they arise.

Further improve operating and financial performance

We will continue to focus on improving our operating and financial performance. Our key
focus is to reduce our combined ratio, while maintaining robust reserves.

We aim to:

 enhance the use of a predictive ultimate loss ratio model to enable the sales force to
improve the quality of risk that they select; 70

 further increase the use of data analytics to improve our pricing, risk selection and claims
management processes;
47
 reduce our net expense ratio by continuing to eliminate, standardise and automate
internal processes.

Continue to invest in technology and innovation

Investment in technology has always been a key area of differentiation for us and we plan
to continue to invest in this area to further enhance the customer experience. We aim to:

 migrate our entire individual agency network to an end-to-end digital platform;

 increase the share of policies sold without any human intervention by further investing in
our digital channel, including by extending the use of chatbots;

 provide personalized experiences for our customers in every aspect of our service,
particularly digital platforms, by utilizing our existing data collected over the years and by
partnering with large data providers in digital eco-systems;

 continue to work with technology start-ups in areas such as healthcare, agriculture, and
logistics to create a risk management ecosystem and generate new business opportunities.
These start-ups are focused on prediction and forecasting solutions, detection and
monitoring systems, internet of things, and intervention models; and

 increase the utilisation of artificial intelligence and machine learning techniques to

improve our risk management and increase operational efficiency.

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 Chapter 08
Latest news of ICICI Lombard

Aim to grow faster than industry at 15-20%: ICICI Lombard

Aim to grow faster than the industry and have a targeted growth rate of 15-20 per cent, said
Bhargav Dasgupta, MD & CEO, ICICI Lombard.
ICICI LOMBARD witnessed a tepid listing today. Speaking to CNBC-TV18 Bhargav
Dasgupta, MD & CEO of the company said they have been a market leader in multiple
products. Throwing more light on basic contours of the IPO and individual dilution by the
ICICI Bank and Fairfax, he said out of the total dilution of 19 per cent, ICICI Bank has
sold 7 per cent stake and Fairfax sold 12 per cent stake. So out of the total funds raised, Rs
2000 crore would go to ICICI Bank and Rs 3700 crore to Fairfax.

Talking about any further fund raising, he said the total capital with them at this point is
significantly higher than regulatory requirement of 1.5, so the current solvency of ICICI
Lombard stands at 2.13 and looking at their profitability, cash flow they do not see the
need for capital raising for normal organic growth. However, they may consider raising
funds for inorganic growth opportunities, said Dasgupta. Confident of the business growth
going forward he said the general insurance industry is expected to sustain a 15-16 per cent
growth. However, they aim to grow faster than the industry and have a targeted growth rate
of 15-20 per cent, he said.

49
ICICI Lombard IPO – get insured for the long-term

Industry tailwinds, increased awareness towards insurance products, leadership

status amongst private non-life insurers in India, a robust distribution channel, and
healthy financials make ICICI Lombard's IPO a proposition worth considering.

With its growing population and a large proportion thereof in the working age bracket,
India remains a lucrative yet under-penetrated market for insurance products. In this
backdrop, the initial public offer (IPO) of the country‘s largest private non-life insurer
ICICI Lombard assumes importance. While the company‘s past growth has been
impressive, the future holds promise. Hence, despite the optically heady valuations, long-
term investors willing to participate in this consistent growth theme shouldn‘t ignore this
offer.

ICICI Lombard clocks 30% growth in motor insurance segment

"At ICICI Lombard, we have registered a growth of more than 30 percent in the motor
insurance segment alone during the first half of the current fiscal from the year-ago
period," ICICI Lombard's chief of health and motor, underwriting and claims Sanjay
Datta told reporters here.
Private sector non-life insurer ICICI Lombard has registered a growth of over 30 percent in
the motor insurance segment in the first half of the current fiscal, a senior executive of the
company said here today.

Such a growth rate was last achieved by the company around eight years ago
"At ICICI Lombard, we have registered a growth of more than 30 percent in the motor
insurance segment alone during the first half of the current fiscal from the year-ago

50
period," ICICI Lombard's chief of health and motor, underwriting and claims Sanjay Datta
told reporters here.

He was speaking on the side lines of launch of 'Mobile Self Inspection' here. The app
allows customers a hassle-free renewal of their lapsed motor insurance policy. According
to Datta, such type of growth under the motor insurance segment had been achieved by the
company during pre-2008 period.

"We had achieved such kind of growth in the motor insurance segment during pre-2008
period," he said without divulging any further details. For ICICI Lombard, motor insurance
contributes 40 percent of the total premium earned by it, he said. The company has crossed
Rs 6,000 crore of premium income during the first half of the current fiscal under motor
insurance segment. In the industry, total premium collected by all the players on the space
during first half of the year was at Rs 27,000 crore, he said. On the long-term motor
insurance policy, which was launched last year, he said the company has already covered
around six lakh two-wheelers so far and thus earned premium below Rs 100 crore. Under
the policy, there is a provision to provide insurance cover for two wheelers for a period up
to three years. Talking about the crop insurance, he said the company has already
underwritten premium amounting to around Rs 1,500 crore so far against the industry
figure of Rs 12,000 crore. He said that driven by the Prime Minister Crop Insurance
Scheme which was implemented by the government on July 1, the industry may cross the
mark of Rs 18,000 crore by the end of the forthcoming Rabi season. ICICI Lombard is
participating in the scheme in 5-6 states.

ICICI Lombard 'selective' in providing group health insurance

A group health insurance plan is the one that provides healthcare coverage to a select
group of people.
Country's largest private sector non-life insurer ICICI Lombard said that it is selective in
providing group health insurance as the combined ratio is on a higher side in the segment.
A group health insurance plan is the one that provides healthcare coverage to a select
group of people. Without disclosing any number, the company said that claims under its
group health insurance segment have gone up in recent past.

"We have received higher claims under group health insurance than that of the individual
health insurance," ICICI Lombard General Insurance Company executive director Sanjeev
Mantri told reporters on the side lines of an event here today. "Hence, we are selective in
group health insurance in terms of with whom to work and with whom we shouldn't,"
Mantri said. However, he refused to share any further details on the plea that it was client-
specific. Talking about health insurance portfolio of his company, he said, "As on March
31, the size of the health insurance portfolio at ICICI Lombard was at Rs 1,500 crore,
which comprised around 8 per cent of the total industry's HI portfolio, which was currently
having a size of Rs 25,000 crore." The health insurance segment was growing at a CAGR
of 28 per cent for the past few years in the country, he said. The company provides cover
against 18 critical illnesses and it has got 4,500 hospitals across the country under its
network, he added.

Meanwhile, sharing the highlights of ICICI Lombard research on wellness, he said that
wellness as a concept was gaining ground as 40 per cent Indians take to staying fit and

51
healthy. The survey was conducted among 1,524 respondents across 10 cities in the
country.

ICICI Lombard eyes 20% growth in 2-wheeler segment this fiscal

Private sector non-life insurer ICICI Lombard is looking at 20 per cent growth in the
long term two wheeler segment during the current fiscal, a senior company official
said on June 27 2016.
Private sector non-life insurer ICICI Lombard is looking at 20 per cent growth in the long
term two-wheeler (LTTW) segment during the current fiscal, a senior company official
said on June 27. Overall, the company is looking at a growth of 12-13 per cent in 2016-17.
ICICI Lombard collected a revenue of Rs 166 crore in terms of gross written premium
from LTTW insurance so far, which it launched in April last year. It has issued 5,00,000
LTTW policies during past 14 months. "At ICICI Lombard, we are looking at a growth of
20 per cent in LTTW segment in terms of premium and policies both," ICICI Lombard
General Insurance Chief, Underwriting and Claims, Sanjay Datta told reporters.

"We are looking at achievement of 12-13 per cent overall growth in the current fiscal," he
said, adding "the growth is likely to come from areas like weather, two-wheeler, property,
health and marine." Talking about the company's performance in the year gone by, he said,
"Our combined ratio in 2015-16 was at more than 105 per cent which was mostly due to
Chennai floods and adverse weather in the country during the year.

52
Market Structure
As of March 31, 2017, there were a total of 30 companies in the Indian non-life insurance
-Product Insurers: o Four public sector
companies offering multiple products – National Insurance Company, The New India
Assurance, Oriental Insurance Company and United India Insurance o 18 private sector
companies offering multiple products – including ICICI Lombard, Bajaj Allianz, HDFC
c sector
specialised single product line non-life insurance companies – Agriculture Insurance
Company (AIC), and Export Credit Guarantee Corporation (ECGC) o Six standalone
private health insurance companies – Apollo Munich, Cigna TTK, Max Bupa, Religare
Health, Star Health, and Aditya Birla Besides these 30 companies, the state owned General
Insurance Corporation of India (GIC) operates as the main Indian reinsurer The Regulator
has also allowed foreign reinsurers to set up branch offices in India which shall lead to an
increase in the reinsurance capacity thereby increasing the market depth The chart below
sets forth the composition of the GDPI for fiscal 2017 by product segment and by type of
insurer.

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Historical Evolution
The Indian non-life insurance sector has experienced three phases of growth since fiscal
2000, when the sector was opened to private companies, and to foreign companies, subject
to a shareholding cap of 26%. These phases of growth are primarily determined by
historical evolution of the tariff regime applicable to the pricing of products offered by
non-life insurance companies, which was laid out and modified by the IRDAI at periodic
intervals. The products are classified broadly in two forms – 1) tariffed products in which
pricing was regulated and 2) non-tariffed products in which insurers are free to set their
own pricing. The evolution of the tariff regime for key product segments is set out below:

Future Growth Potential

The continued under penetration present in the health insurance market in India presents a
significant growth opportunity, especially as demand for healthcare increases and focus on
risk awareness grows with rise in disposable incomes. Affluent Indians also seek
worldwide coverage and larger sum insured which could increase the depth of the market.
India also has amongst the highest levels of health protection gap in Asia, according to
Swiss Re, which is expected to remain significant with the rising incidence of lifestyle
diseases and the gradually aging of the population in due course.
The low penetration, rising cost of healthcare, constraints in government spending, and
increasing demand for quality healthcare are expected to drive growth in health insurance.

54
Reinsurance

Under the present IRDAI regulations, every private and public non-life insurance company
has to cede at least 5% of its risk to the state owned reinsurer GIC, which was the sole
domestic reinsurer operating in the Indian market until fiscal 2017. This cessation is
applicable on all policies except for government sponsored health insurance schemes. Non-
life insurers are also required to offer GIC first preference and seek ―best terms‖ for their
reinsurance requirements from GIC before approaching others. The Insurance Laws
(Amendment) Bill 2015 allowed foreign insurers to open branch offices in India enabling
them to participate in the reinsurance business in India without an Indian partner.
Subsequently, IRDAI has issued licences to six global reinsurers engaging in non-life
reinsurance - Munich Re, Swiss Re, SCOR, Hannover Re, Amblin Llyod and XL Catlin to
set up branch operations in India. IRDAI has also recently granted a certificate of
registration in December 2016 to ITI Re, another domestic reinsurer to commence
operations.

Competitors
i. General Insurance Corporation of India Ltd.
ii. HDFC Standard Life Insurance Co Ld.
iii. The New India Assurance Co. Ltd.
iv. SBI Life Insurance Company Ltd.

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 Chapter 09
Partnership

HDFC ERGO General Insurance Company and ICICI Lombard launch insurance plans for
solar projects

With the rapid development of solar power projects, increasing competition and collapsing
tariff bids, Indian insurance companies have recently launched products to protect lenders
as well as developers.

The HDFC ERGO General Insurance Company has launched a solar energy shortfall
insurance policy. The policy will protect lenders and developers against any shortfall in the
expected solar power generation due to non-physical damage. Non-physical damage will
include suboptimal design, lower-than-expected solar radiation, and error in the
determination of yields during the design phase. The insurance will safeguard project
operators from the financial liabilities that they may face in case they are unable to supply
the volume of electricity promised in the power purchase agreements. The policy duration
has been set for five years.

ICICI Lombard too has issued a product to cover reduced generation as a result of physical
defects in the solar panels. The insurance coverage is set for a period of 15 years. Project
developers will be safeguarded against loss in generation due to faulty manufacturing and
unexpected degradation of solar panels.

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