Measuring the Financial Performance of Selected Private Sector Non-Life Insurance Companies in India
Author : Ashirbani Bardhan and Dr. Somnath Das
Abstract :
The Indian non-life (general) insurance sector, has undergone through a significant transformation over the years. Predominantly it was state-controlled but due to liberalization and the entry of private players, it has seen tremendous growth and experienced a more competitive market where private sector insurers are gaining significant market share. The focus of this research is to analyze the financial performance of selected private sector non-life insurance companies in India over the last decade [Study period (2013-14 to 2022-23)] using key financial ratios as prescribed by IRDA. As per this circular every insurance company should disclose a few of their important ratios in their published reports so that stakeholders can get a clear idea about their financial performance.
The review of the related literature reveals that most of the research has covered the market strategies, impact of privatization, innovation of customer service, and competitive analysis of the financial results of private and public sector non-life insurance companies. However, the study seeks to bridge that gap by using these financial ratios to evaluate the financial health of selected non-life insurance companies. This research considered 10 companies and the study period is also 10 years (2023-2013). The financial ratios specified in the IRDAI Master Circular for Performance Evaluation are as follows:
The specific objectives of the study is firstly evaluate the financial performance of the selected companies based on the financial ratios prescribed in the IRDA Master Circular and secondly to make an inter-company analysis of the selected companies in respect of their financial performance. All the secondary data have been collected from annual reports of selected non-life insurance companies and circulars published by IRDA. This empirical analysis offers insights into the financial health of private sector non-life insurance companies in India, providing a comprehensive view of their performance based on IRDAI-prescribed ratios. The study’s findings are valuable for policymakers, investors, and industry experts, contributing to a deeper understanding of the sector’s financial dynamics and competitive landscape.
Keywords :
Financial Performance, Non-life Insurance Companies, Efficiency, Profitability, Growth.
