Swot Analysis Of Reliance Insurance

PROJECT MANAGEMENT

SWOT Analysis of RELIANCE GENERAL INSURANCE Presented By: Group -1 12/11/08

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ADA Reliance Group

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BUSINESS UNIT VALUATION BUSINESS UNIT VALUATION

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Ratios highlighting profitability of the RGIC Year 2007-08

Ratios

Gross Profit Ratio

-15%

Net Profit Ratio

-17%

Operating Expenses Ratio ROI

29%

ROE

-34%

EPS

-15.92

11.27%

Dividend Per Share* * No dividend has been recommended by the Directors of the company this year 12/11/08

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Strengths • RGIC is second among private players after ICICI Lombard GI • India’s first insurance company to be awarded the ISO 9001:2000 certification • Net worth has increased up to Rs.4.94 billions doubled from last year’s Rs.2.59 billions • Excellent outreach with a large distribution network • Reserves and Surplus has increased five times to Rs.4.998 billion from Rs.1.04 billion previous year 2007 • Exclusive bancassurance tie-up with annual business of Rs.130-145 crore. • RGIC has been able to give highest ROI of 11.27% in last five years. • RGIC commands 17% of the Private Sector Share & 7% share of the General Insurance Industry 12/11/08

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Weaknesses • Earning per share is Rs. -15.92 (previous year Rs.0.16) • Sudden expansion this year by establishing more than 125 branches has increased operations and administration expenses due to which losses incurred. • There is no technical support of the foreign principals as RGIC is not having any foreign tie-up as other players have. • All the inner facts and factors known to the family member cum competitor company headed by Mukesh Ambani. • Overdependence on fellow subsidiaries for various supplies. 12/11/08

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Opportunities • De-tariff – IRDA removed controls on pricing in General Insurance business with effect from 1st January, 2008

• The industry is going to be freed from product wordings and policy wordings • Can become market leader as presently it is no. 2 position • General insurance industry in India has grown at 15% CAGR in terms of gross premium collection

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Threats •

New Entrants –

Future General India Life Insurance Company Limited -Sep. 2007 IDBI Fortis Life Insurance Company Ltd. –Dec 2007 Bharti Axa General Insurance Company Ltd. -June 2008

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Many foreign bank giants are going to enter Indian market. They have very large portfolio of various verticals and products with them New tie-ups by the competitors viz.

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Online travel portal cleartrip ties up with Tata AIG to offer travel insurance ICICI Prudential inks pact with Suvidha Infoserve

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