A PROJECT REPORT ON

ICICI LOMBARD GENERAL INSURANCE

SUBMITTED BY

CHAVAN OMKAR RAJARAM ANITA

T.Y.BBI SEM-VI

(2017-2018)

Project submitted to “ University Of Mumbai” in partial fulfilment for the

Award of Bachelor’ s Degree in B.Com(Banking & Insurance)

UNDER THE GUIDANCE OF

MR. MAMTA RANE

AFFILIATED TO UNIVERSITY OF MUMBAI

GURUKUL COLLEGE OF COMMERCE

GHATKOPAR (E), MUMBAI 400077.

MARCH 2018
 CERTIFICATE

This is to certify that CHAVAN OMKAR RAJARAM ANITA student of

Gurukul College of Commerce studying in TYBBI bearing Roll No. 10 has

successfully completed the project entitled “ A PROJECT REPORT

ON ICICI LOMBARD GENERAL INSURANCE ” as part of
assignments under my supervision during the academic year 2017 – 2018.

External Signature Mr. Mamta Rane

Mr. Nitin Agarwal Dr. Nandita Roy

Co-ordinator (Principal)
 DECLARATION

I, CHAVAN OMKAR RAJARAM ANITA student of T.Y.B.B.I (2017-2018) of

Gurukul College of Commerce, Mumbai -400077 do hereby declare that I have

completed the Project Work titled “ A PROJECT REPORT ON

ICICI LOMBARD GENERAL INSURANCE.” as a part of my
academic fulfillment.

The Information contained in this project work is true and original to the best of
my knowledge and belief.

____________________

Signature of student
 ACKNOWLEDGEMENT

I wish to express my sincere and heartfelt thanks to my guide Mr. MAMTA

RANE for his/her supervision throughout the project work.

I thank Mr. Nitin Agarwal, BBI Co-ordinator for encouragement and help to
complete this project work.

I take this opportunity to express my deep sense of gratitude to Dr. Nandita Roy
(Principal), Gurukul College of Commerce, Ghatkoper (E) for having taken the
initiative to start the project work.
I also thank Mrs Seema Saraf , Librarian for her support in finding reference
books, journals and other materials

Finally, I wish to express my heartfelt gratitude to my beloved parents and all my

friends for their encouragement and support in completing this project work.
Above all I thank Lord Almighty for abundant mercies and infinite grace which
showed upon me to complete this project work.

___________________

Signature of the Student

 CONTENT

1 GENERAL INTRODUCTION ABOUT THE 1 to 8

INSURANCE SECTOR
2 REVIEW OF LITRATURE 9 to 14

3 OBJECTIVE OF PROJECT 15

4 PROFILE OF THE ORGANIZATION 16 to 31

5 VARIOUS PLAN OFFERED BY ICICI LOMBARD 32 to 40

GENERAL INSURANCE COMPANY LTD
6 RESEARCH FINDINGS 41 to 52

CONCLUSION 53

BIBLIOGRAPHY 54
 CHAPTER.1

1.1 GENERAL INTRODUCTION ABOUT THE SECTOR

Insurance is not the sale of products, but servicing customers. It is a system, by which the
losses suffered by a few are spread over many, Exposed to similar risks. Insurance is a
protection against financial loss arising on the happening of an unexpected event. Insurance
companies collect premiums to provide for this protection. A loss is paid out of the premiums
collected from the insuring public and the Insurance Companies act as trustees to the amount
collected. The very fundamental principle of spreading of the risk is actually practiced by the
insurance companies by reinsuring the risks that they have insured. The opening up of the
Insurance Sector to Private Companies, has made available more products and world class
service to Indian Customer.

This project has been made with an objective to give an insight into various facts of General
Insurance sector in India. An attempt has been made to explain the apex body of General
Insurance. i.e. General Insurance Corporation of India, its structure, products and subsidiaries.

Also the review of latest entrants into insurance sector viz. private players like TATA AIG
General Insurance Company, Reliance General Insurance Company limited, Bajaj Allianz
General Insurance Company, IFFCO Tokyo General Insurance Company, Royal Sundaram
General Insurance Company limited and ICICI Lombard General Insurance Company have
been described in brief, Due to the growth in the technological sector of the country, the
insurance companies have started utilizing these technologies to it as optimum level.

1.2 INDUSTRY PROFILE

a. Origin and Development of the industry

Till May, 1971 there were 107 companies operating in the market, both Indian and foreign.

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Some companies were in the co-operative sector. The size of the companies and there reach
varied to a great extent. Whereas many companies used to underwrite all types of covers fire,
marine& miscellaneous insurance.

The government in May, 1971 took over the undertaking of all the Companies as a prelude to
ultimate nationalization. This was brought about under the General insurance business
(Nationalisation) Act, 1972.

Thus, effective 01/01/1973 a single holding company was created named as General Insurance
Corporation of India, with 4 subsidiaries to take care of the general insurance business
operation.

Brief History of the Insurance Sector

The business of life insurance in India in its existing form started in India in the year 1818
with the establishment of the Oriental Life Insurance Company in Colkata. Some of the
important milestones in the insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective
of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with
a capital contribution of Rs. 5 crore from the Government of India.

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The General insurance business in India, on the other hand, can trace its roots to the Triton
Insurance Company Ltd., the first general insurance company established in the year 1850 in
kolkata by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972.Nationalized the general
insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies.

The four subsidiaries formed were as under:

1. The National Insurance Co. Ltd

2. The India Assurance Co. Ltd
3. The Oriental Insurance Co. Ltd
4. The United India Insurance Co. Ltd

The four subsidiary companies operated under the all direction of the GIC. Each of these had
almost a similar structure with 4 tiers

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  The branch at the bottom rung,
 The divisional office,
 Regional office and
 The Head Office at the apex.

b. Growth and Present status of the industry

At present 12 companies are operating in general insurance market for direct business. The
four public sector companies mentioned above and the following companies in the private
sector. These private companies were formed after the passing of the IRDA Act, 1999. This
removed the prohibition existing in the GIBNA Act relating to formation of insurance
companies other than the four Public sector companies.

The companies in the private sector are:-

1. Bajaj Allianz General Insurance Co. Ltd.
2. Cholamandalam General Insurance Co. Ltd.
3. HDFC Chubb General Insurance Co. Ltd.
4. ICICI LOMBARD General Insurance Co. Ltd.
5. IFFOCO Tokyo General Insurance Co. Ltd.
6. Reliance General Insurance Co. Ltd.
7. Royal Sundaram Alliance Insurance Co. Ltd.
8. Tata AIG General Insurance Co. Ltd.

The General Insurance Corporation is now only Reinsurance Company and operates as the
National Reinsures. There are however, some companies in the market, which are formed for
a specific purpose only.

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Deposit insurance company

To take care of loss suffered by the depositors of a bank.

 Exports Credit Guarantee Corporation - this takes care of the credit risk, which exporters
face in respect of the goods exported.

 Agricultural Insurance Corporation to take care of crop insurance and allied risks.

 There are also insurance departments in some of the states.

The four public sector and the 8 private sector companies are authorized to handle direct
business as well as reinsurance business, both inward outward. The buyers of insurance would
be property owners, factory owners, traders, vehicle owners, commercial establishments,
professionals etc. In fact the whole population could deemed as potential costumers for
insurance of one type or another.

With the largest number of life insurance policies in force in the world, Indian insurance sector
accounted for 4.1 per cent of GDP in 2006-07, up from 1.2 per cent in 1999-2000, far ahead
of China where insurance accounts for just 1.7 % of the GDP and even the US where insurance
penetration stands at 4 per cent of the GDP.

The time factor plays an important role while providing service to the customer. The customer
expects that the procedures for settling the claim should be short and not much time
consuming. They should get the benefits of the service as soon as possible.

Today the technology is boosting in each and every field. Insurance is not an exception.
Companies have started providing customers facility of online payment of premium through
their websites. They also provide online assistant to the customer the policy status and how to

5
calculate the premium. To calculate the premium they just need the present age, the type of
police, sum assured, and accident covered if any. By filling in this information you can
calculate the amount of premium you have to pay. The customer can pay their premiums by
means of credit cards or can also give standing instruction to the bank in order to pay their
monthly premiums.

The insurance companies also provide loan facilities against their policies. At present loans
are granted on unencumbered polices as: Up to 90% of the Surrender Value for policies, where
the premium due is fully paid-up, and Up to 85% of the Surrender Value for policies where
the premium due is partly paid- up. The minimum amount for which a loan can be granted
under a policy is Rs150. The rate of

interest charged is 10.5% p.a., payable half-yearly. Loans are not granted for a period shorter
than six months, or on the security of lost policies (the assured must have the duplicate
policies) or on policies issued under certain plans. Certain types of policies are, however,
without loan facility.

In the first month of financial year 2007-08, private sector insurers grew 37.34 per
cent to Rs1272.22 crore over April 2006. In the process, the market shares have further
undergone a change. Private sector has grabbed a market share of 40 per cent in the non-life
insurance business, from 34 per cent in the financial year 2006-07. Public sector market share
is now only 60 per cent.

c. Future of the Industry

India's insurance sector is zooming to show an unprecedented progressive growth of more than
200% by the period of 2009-12. The Associated Chambers of Commerce and Industry of India
has clocked out the fact that during this period, private players in the industry will see a growth
of about 140 per cent, owing to the adoption of the aggressive marketing techniques in
comparison of the growth rate of 35-40 per cent achieved by the state owned insurance
6
companies. The chamber is expected to poise the business of insurance to reach at Rs.2000
billions in coming 2 years from the present level of Rs. 500 billion. With the result of adoption
of the intense marketing strategies by the private players, the declination has been witnessed
in respect of the share of the state owned insurance companies captured in the market.

The market share fallout has been noticed in context of such companies like GIC, LIC, which
have come down to nearly 70 per cent in the past 4-5 years from the 97 per cent. The experts
have fore casted the more severe competition in the insurance sector likely to be occurred in
the near future. Till recently, insurance sector was majority driven by the government sector
players but now many private sector

multinational players have come into the picture. Like HDFC, ICICI Lombard, Royal
Sundram, Tata Aig, etc. Insurance sector has been characterized as the booming sector of the
Indian arena, which has shown the growth rate of more than 15 per cent to 20 per cent.
Insurance in India is put under the federal subject and is governed by the Insurance Act, 1938,
the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization)
Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and by
various other acts.

Today Insurance Companies in India have grown manifold. The insurance sector in India has
shown immense growth potential. Even today a giant share of Indian population nearly 80%
is not under life insurance coverage, let alone health and non-life insurance policies. This
clearly indicates the potential for insurance companies to grow their market in India. In 1999,
various reforms were suggested in the insurance industry in India.
This has changed a lot of things for the insurance companies in India. These reforms were:

Bringing down of the government stake holding to 50%. Only the private companies with a
minimum capital of Rs.100 crores should be allowed to enter the insurance sector. No
insurance company can deal in both life and non-life insurance under the same business entity.

7
Foreign Insurance Companies can enter India only in collaboration with domestic insurance
companies Interest should be paid on delays of payments by the insurance companies in case
of non-settlement of insurance claims. And many more to bring greater freedom and a well-
planned regulation to the insurance companies in India.

Though, the existing rule says that a foreign partner can hold 26% equity in an insurance
company, a proposal to increase this limit to 49% is pending with the government. Since
opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured
into the Indian market and 22 private companies have been granted licenses.

The demand for health insurance covers has seen a healthy increase, and today the sector is
the fastest growing segment in the non-life insurance industry in India, which grew at over
40% last year. It is also emerging as an increasingly significant line of business for life
insurance companies. While this rate of growth appears to be very healthy, it is on a low base,
and health insurance penetration in the country continues to be low. Only about 25 million
persons are presently covered for health through commercial insurance, in a country of over
1.1 billion people. Overall, the Indian health sector is still characterized by the near absence
of any significant risk protection against major health-related expenditure.

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 CHAPTER 2

REVIEW OF LITERATURE

Mapping for risk management

 ICICI Lombard use of a GIS solution for risk management was the first project of its kind
in the Indian insurance industry.

 Risk management is defined as the process of planning, organizing, leading and controlling
the activities of an organization in order to minimize the effects of risk on the said
organizations capital and earnings. Enterprise risk management expands this process to
include not just the risks associated with accidental losses, but also financial, strategic,
operational, and other risks as well.

 ICICI Lombard used a Risk Management System (RMS) that helped it zoom into spatial
level risk data representing real-world entities including both geo-referenced and
quantitative attributes attached to it at a national scale. It also used GIS solutions to use
tools, maps, and latest census demographic data.

 This helped the company get a clearer picture of the levels of risks associated not just with
financial information, but also with natural risk-prone geographies. It allowed the company
to understand its customers better and make strategies according to the more accurate levels
of perception offered by the solution.

A Unique Deployment

 The use of a GIS-based RMS was essentially to identify areas on a map with high
population density, a large concentration of rental properties, or other demographic
characteristics that affect whether to underwrite a property for fire or burglary insurance.

9
 Further he reckons that it can determine if a home is in a flood plain, near a fault area, or is
susceptible to wild fires and other hazards to make informed decisions on whether to
underwrite a property for hazard insurance or find the driving distance to the nearest fire
station or police station.

 For an insurance organization like us it makes sense to have such systems as it helps in
determining the correct details of a property. It is interesting to note that the project began
in February 2004 and was completed in seven months (September 2004) flat. The Web part
of the project took about ten months (began in November 2004 and ended in September
2005). All together it cost Rs 35 lakh.

OBJECTIVES ACCOMPLISHED

In managing insurance policies, getting the correct details is of prime importance. Gulati
believes that if the system for analyzing the information related to policy and customer
concentration service is available, decisions are much more accurate, efficient and quick.

 Another reason for deploying such systems was to incorporate regulatory requirements of
Nat-Cat (Natural Catastrophic) limits in reinsurance treaties, provide real-time information
of potential damages in case of a natural calamity and provide business intelligence
requirement at the geographical level to ensure elimination of bad risk.

 Since the implementation of the new systems, the claims processing takes a shorter
turnaround time. Says Gulati, GIS helps claims processors use the customer or claim
location address on a map relative to other claims and to boundaries such as flood and storm
limits. In case of reinsurance, it helps in better premium count by identifying good and bad
risks. Damages are assessed and modeled to help the rein surer predict the results of future
events, thus providing more accurate underwriting.

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 A big advantage has been the increase in the number of customers. The GIS software
combined with Government of India census demographic data packages allows insurers to
profile potential and existing customers and perform predictive modeling to find new
opportunities.

 The RMS helps to zoom into spatial level risk data representing real-world entities
including both geo-referenced and quantitative attributes attached to it at a national scale.
This application helps to manage risks in a better way, and operate more efficiently by
geographically assessing and analyzing information about underwriting, risk management,
and customer service. Map Info, a Geographical Information System (GIS) based desktop
application is used for deploying the RMS and help assess and analyze information related
to policy and customer concentrations. It includes risk information and analysis of different
nature, such as estimated impact of frequency and severity of earthquakes or other natural
calamities, which ultimately leads to efficient management of risk and correct pricing of
policies.

 Though it is too early for the company to talk on ROI, it has predicted that over a period of
three years, it would be able to increase the revenues by Rs. 47.85 crore.

 The systems have already benefited nearly 50 employees in reinsurance and underwriting.
According to Gulati, once the Web-based module is rolled out, it will benefit 800 more
employees and around 35,000 customers.
ICICI Lombard Insurance Services implements Talisman v6 CRM
Talisman TM, a provider of multi-channel CRM solutions, announced that its solution has
been deployed by ICICI Lombard, a leading provider of customized insurance solutions.
Talisman v6 will provide ICICI Lombard's customers with enhanced customer service
through quicker and more accurate claims processing.

 ICICI Lombard customer service representatives now have a single-screen view that
provides a 360-degree perspective and complete audit trail of each customer enquiry.

11
 This enquiry includes contact information, customer profiles, appointments, and service
queries, regardless of communication method (chat, email, or phone). The improved
speed and accuracy of claims powered by Talisman v6, has led to increased customer
retention rates for ICICI Lombard.

 Implementation of Talisman v6 has allowed ICICI Lombard to map its internal claims
process, eliminating the need for call center agents to process and forward each
document individually to the company's claims managers. Once information has been
added into the system and verified, Talisman v6 records each detail of each claim and
assigns the claim to the organizations operations team for payment. This new integration
permits agents to manage claim requests quickly and accurately saving time by
matching information from a range of back office systems.

 "Our CRM strategy spans the entire organization from front-office to back-office. It is
a commitment that we have made to put customers at the heart of our company. We are
focused on using multi-channel and self-service capabilities to help in our business
growth. With the success of Talisman v6, we plan to expand the footprint to include our
partners through Talisman’s Web client, giving them access to relevant functions over
the internet," said Sudhir Salian, head IT and retail , ICICI Lombard.

 From a marketing perspective, Talisman's v6 enables ICICI Lombard to proactively

build customer relationships through outbound-targeted campaigns. Contact databases
can now be integrated into the CRM solution, providing staff with campaign
management tools. This ensures that each contact receives the correct outbound
communication, thereby dramatically increasing customer acquisition levels.

 "Improving customer retention and acquisition is vital in today's competitive global

insurance market. We have helped ICICI Lombard reduce the complexity and time spent
on each claim by eliminating the need to process information from a variety of different

12
 back-end systems. Our partnership with ICICI Lombard underlines the value Talisman
brings to the insurance services marketplace."

 ICICI Lombard Gen Insurance expands southern operations

Even as the city-based private insurers are finding it tough to crack the market, ICICI
Lombard General Insurance Company is going great guns in the southern market. After
storming the fire insurance market, the company is now looking at marine hull
insurance.

 The company has got sizeable share of coinsurance from Sanmar Shipping and West
Asia Maritime hull insurance policies. "Our share in the Sanmar policy is 25 per cent
while it is 35 per cent in the West Asia policy. According to him the southern region
will close the first quarter with a premium income of Rs 30 crore as against Rs 40 crore
earned last fiscal. The company has got good entry in the Sanmar group, India Cements,
Madras Cements, KCP and other leading industrial groups in south.

More than the basic fire insurance policy, we are focusing on selling the Consequential Loss
of Profits insurance policy that fetches good premium income.

 ICICI Lombard is also into liability insurance in a major way. The company has sold
unique clinical trial insurance policies to couple of pharma companies based in
Hyderabad. The policy covers the drug companies against any claims from persons who
are volunteers for human clinical trials.

 "Sufficient reinsurance cover has been taken by us while selling the clinical trial and
marine hull insurance policies," Bharathan says.

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 Meanwhile, ICICI Lombard is expanding its reach in the four southern states by
leveraging ICICI Bank's branch network. By paying rent and other charges to its parent,
ICICI Bank, the insurance company will operate from the bank premises.
 According to Bharathan each branch should fetch a premium income of at least Rs 1
crore per annum to be economically viable. With brokers being its major source of
corporate business, ICICI Lombard conducts regular training courses to broking
officials so that they are well aware of the products, and terms and conditions.

14
 CHAPTER.3
OBJECTIVE OF PROJECT

1. To study the trends, status and potential of general Insurance Industry in India.

2. To analyze the consumer behavior towards ICICI Lombard products.

3. To critically appraise the marketing strategies of ICICI Lombard.

4. To determine that what factors should the company focus on to attract greater Market
share.

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 CHAPTER 4

PROFILE OF THE ORGANIZATION

4.1 Origin of the Organization:

The ICICI Ltd. was established in 1955 by the World Bank, the Government of India and the
Indian Industry, to promote industrial development of India by providing project and corporate
finance to Indian industry. Since inception, ICICI has grown from a development bank to a
financial conglomerate and has become one of the largest public financial institutions in India.
ICICI has thus far financed all the major sectors 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 of the Lombard group's commercial, personal, and
specialized insurance companies. Canadian owned and operated, Lombard Canada Ltd. has
its head office in Toronto and has annual sales in excess of $500 million and is a wholly owned
subsidiary of Fairfax Financial Holdings Limited (FFH on the TSF Lombard Canada Ltd.
has achieved a reputation for providing solid underwriting performance, diversified books of
business and strong capital positions.

The Joint Venture ICICI Lombard General Insurance Co will be headed by Mr. Sanjiv Kerkar.
ICICI would hold about 74 percent stake, while Canadian insurer Lombard would hold the
maximum permissible 26 percent and commence business with a start-up capital of Rs.100
crore. ICICI Lombard has plans to sell covers to the corporate clients of ICICI. At the same
time it will sell property insurance for ICICI home loan seekers and auto insurance for those
availing of car finance.

4.2 Growth and Development of the Organization

ICICI Lombard is the largest private sector general insurance company in India with a Gross
Written Premium (GWP) of Rs. 34,198.4 million for the year ended March 31, 2009.
16
The company presently has around 4,777 employees in 357 branches. In the financial year
ended March 31, 2009, the company issued over 4 million policies and serviced over 33 lakh
claims. The company has a claim disposal ratio of 97% (percentage of claims) settled against
claims reported as on March 31, 2009.

ICICI Lombard has been assigned a domestic rating of iAAA by ICRA (an associate of
Moodys Investors Service) for highest claim paying ability and a fundamentally strong
position. ICICI Lombard allows instant policy issuance and renewal through its website
www.icicilombard.com for all retail insurance products including Car Insurance, Health
Insurance, Travel Insurance, Two Wheeler Insurance and Home Insurance. There are multiple
payment options available including Internet banking, credit card, debit card and cash card.

ICICI Lombard Auto Insurance has been rated highest in customer satisfaction by J.D. Power
Asia Pacific in India among 11 auto insurance providers. The company has been conferred the
Golden Peacock- Eco Innovation Award of 2009 for weather insurance and the Customer and
Brand Loyalty award in the Insurance Sector - Non-Life at the 2nd Loyalty awards, 2009. It
was awarded the General Insurance Company of the Year at the 11th Asia Insurance Industry
Awards. The company also won the NDTV Profit Business Leadership Award 2007 and was
adjudged as the most Customer Responsive Company in the Insurance category at the
Economic

Times Avaya Global Connect Customer Responsiveness Award 2006. It has the Gold Shield
for Excellence in Financial Reporting by the ICAI (Institute of Chartered Accountants of
India) for the year ended March 31, 2006. It is the largest private sector general insurance
company in India with a gross written premium (GWP) of Rs885.1 crore in 2004-2005.

2007 - ICICI Lombard General Insurance Corporation has grabbed the second spot in
insurance premiums growth displacing three public sector companies earned the second largest
premium of Rs448.65 crore for April but was at top place in terms of premium growth of 35
per cent over the corresponding period of the last financial year.

17
4.3 Present status of the organization

ICICI Lombard Auto Insurance has been rated highest in customer satisfaction by J.D. Power
Asia Pacific in India among 11 auto insurance providers. The company has been conferred the
Golden Peacock- Eco Innovation Award of 2009 for weather insurance and the Customer and
Brand Loyalty award in the Insurance Sector - Non-Life at the 2nd Loyalty awards, 2009. It
was awarded the General Insurance Company of the Year at the 11th Asia Insurance Industry
Awards. The company also won the NDTV Profit Business Leadership Award 2007 and was
adjudged as the most Customer Responsive Company in the Insurance category at the
Economic Times Avaya Global Connect Customer Responsiveness Award 2006. It has the
Gold Shield for “ Excellence in Financial Reporting by the ICAI (Institute of Chartered
Accountants of India) for the year ended March 31, 2006.

AWARDAS AND RECOGNITION

JD Power Asia Pacific Award

ICICI Lombard Ranks Highest in Customer Satisfaction among Auto Insurance

Providers in India: J D Power Asia Pacific.

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Golden Peacock- Eco Innovation Award of 2009 for weather insurance

ICICI Lombard has been conferred the Golden Peacock- Eco Innovation Award of 2009 for
weather insurance.

Customer and Brand Loyalty Award 2009

ICICI Lombard wins the Customer and Brand Loyalty Award in the "Insurance Sector- Non-
Life" at the 2nd Loyalty Awards on January 29, 2009.

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General Insurance Company of the Year

11th Asia Insurance Industry Awards 2007, Singapore

ICICI Lombard becomes the first Indian insurance company to win this prestigious award.

Brand Leadership Award 16th Asia Brand Congress, Taj Lands End, Mumbai

Awarded the Brand Leadership Award at the 16th Asia Brand Congress held at Taj Lands End,
Mumbai from 26-27th September, 2007.

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iAAA rating by ICRA

Assigned the iAAA rating by ICRA indicating highest claims paying ability and a
fundamentally strong position.

4.4 Functional Departments of the Organization

Claim Settlement:

Lightning-fast claim settlement is one of the key areas of focus for ICICI Lombard. Our
dedicated Relationship Managers, wide spread network across India and presence of 247 call
centers assure our customers that we are always on call, day or night. Our tie-up with
Cunningham Lindsey, the world is second largest loss adjustors with its network in 80
locations across India, ensures a surveyor on site in less than 24 hours.

Rural Initiative:

ICICI Lombard believes in striking the right balance between the commercial and socio-
economic aspects of the insurance business. In its Endeavour to offer tailor-made products to
meet the requirement of the rural population, explore business opportunities in the related
segments and build a competitive edge through strong distribution network and product
innovation, ICICI Lombard uses Intermediaries like ICICI Banks kiosks, direct selling

21
Agents, state-level tie-ups, ITCs e-Chou pals, NGOs and other micro finance Institutions
(MFIs). The rural segment offers immense business opportunities for insurers since it
constitutes 50% of the GDP. Growing per capita and disposable income and rising financial
awareness among rural masses has opened up new avenues for insurers in this segment.

Corporate Business:

ICICI Lombard via its CSG segment aims to tap large corporate with high premium potential.
The company has emerged as a major player in the corporate segment with a well-balanced
portfolio. It has made forays into specialized products that require complex product
development and strong underwriting skills. In addition, a strong distribution has enabled it to
reach out to over 3,000 corporate. It also offers single point contact through dedicated
relationship managers for both sales and customer service.

Bank assurance

The Company has set up a dedicated SBU to cater to banc assurance business managed by
dedicated teams for each bank partner across all locations to ensure highest levels of service
to the channel and their customers and to provide complete support and value addition to the
bank partners. Our banc assurance philosophy emphasizes on complete respect for the partners
brand & business model with a clear understanding that the partner owns the customer. The
company has tied up with few partners like ABN Amro Bank, ICICI Bank, UTI Bank etc.
to ensure complete support and continuous value addition to the partner. The business
philosophy behind the banc assurance initiative is to leverage distribution synergies with
partners. The channel offers unmatched product suite customized for bank channels and
customers.

Retail
ICICI Lombard aims to tap retail segment through multi-product and multi- channel approach
to marketing. The company believes that retail segment has immense potential and will drive
22
the company growth in future. It has presence in all retail categories -- travel, health, home
and motor. It has launched a number of innovative products and features in each category like
Pay-per-day in Overseas Travel Insurance and floater cover for individual Health Insurance.
The key to success in this area is effective market segmentation and targeted product offerings
that meet customer needs.

E-channel

ICICI Lombards e-channel initiative has embraced technology with open arms. The effective
use of technology platforms has enabled customers to view all their insurance transactions
through the web on a real time basis. ICICI Lombards e-channel mainly focuses on targeting
customers through Internet, intranet (of large corporate and manufacturing companies) and
other national level distribution networks. The focus is on targeting customers through the
online medium. The model is to develop an integrated and customized product platform with
key partners -- ICICI Direct, ICICI Bank, preferred partners moneycontrol.com and
indiatimes.com and other websites.

Board Members
Chanda Kochhar, Chairperson
R. Athappan, Director
Sandeep Bakhshi, Director
B.V. Bhargava, Director
Dileep Choksi, Director
N.S. Kannan, Director
S. Mukherji, Director
Chandran Ratnaswami, Director
M.K. Sharma, Director
H.N. Sinor, Director
Bhargav Dasgupta, Managing Director & CEO

23
COMMITTEES
Audit Committee
Mr. S Mukherji; Chairman, Mr. Deelip Choksi; Director, Mr. James F Dowd, Director

Investment Committee
Mr. Chandran Ratnaswami, Chairman
Ms. Kalpana Morparia, Director
Mr. Sandeep Bakhshi,, Managing Director & CEO
Mr. S Gopalakrishnan, Head ñ Investments
Mr. Rakesh Jain, Head-Finance & Accounts
Mr. Liyaquat Khan, Appointed Actuary

Board Governance Committee

Ms Kalpana Morparia, Chairperson
Mr. Chandran Ratnaswami, Director
Mr. H N Sinor, Director

4.5 PRODUCT AND SERVICE PROFILE OF ORGANIZATION COMPETITORS

1. STANDRARD FIRE AND SPECIAL PERILS

FIRE:
Excluding destruction or damage caused to the property insured
a. Its own fermentation, natural heating or spontaneous combustion.
b. Its undergoing any heating or drying process.
c. Burning of property insured by order of non-public authority.

Lighting
Explosion and Implosion
Excluding loss, destruction of or damage.
24
  To boilers (other than domestic boilers), Economizers or other vessel, machinery or
apparatus (in which steam is generated) or other contents resulting from their own
explosion- implosion.
 Caused by centrifugal forces.

Aircraft damage
Loss, destruction or damage caused by aircraft, other aerial or space devices and articles
dropped there from excluding those caused by pressure waves.

Riot, strike and malicious damage

Loss or visible physical damage or destruction by external violent means directly Caused to
the property insured.

Storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation

Loss, destruction or damage directly caused by Storm, cyclone, typhoon, tempest, hurricane
tornado, flood and inundation excluding those resulting from earth quake, volcanic eruption
or other convulsions of nature.

Impact Damage
Loss of or visible physical damage or destruction cause to the property insured due to impact
by any rail road vehicle or animal by direct contact not belonging to or Owned by
 The insured or any occupier of the premises or
 There employees while acting in the course of there employment.

Subsidence and land slide including rockslide

Loss, destruction or damage directly caused by subsidence of part of the site On which the
property stands or land slide / rockslide excluding:

 The normal cracking, settlement or bedding down of new structures.

25
  The settlement or movement of made up ground.
 Coastal or river erosion.
 Defective design or workmanship or use of defective materials.
 Demolition, construction, structural alterations or repair of any property or ground works
or excavations.

Bursting and/or overflowing of water tanks apparatus & pipes.

Missile testing operations.

Leakage from automatic sprinkler installations.

Excluding loss, destruction or damage caused by

 Repairs or alterations to the buildings or premises.
 Repairs, removal or extension of the sprinkler installation.
 Defects in construction known to the insured.

1. BUSH FIRE
Excluding loss destruction or damage caused by forest fires.

2. BURGLARY:
The company shall compensate the insured for any loss or damage, caused by burglary, to the
contents of insureds premises.

3. CASH IN SAFE:
The company will compensate the insured in respect of loss of, or damage to, money and/or
valuables caused by burglary and/or attempted burglary when such money and/or valuables
are contained in a domestic safe or vault which is protected by appropriate and adequate
security measures with lock in key.

26
4. CASH IN TRANSIT
The company shall compensate the insured for loss of money in coins and/or notes caused by
burglary, robbery or theft occurring while such money is in the insureds possession and is
being conveyed by the insured to the insureds premises from the insureds bank /ATM from
where such money had been withdrawn immediately prior to the occurrence.

5. NEON SIGN /GLOW SIGN:

The company will compensate the insured in respect of loss or damage to neon sign/glow sign
belonging to the insured caused by: Accidental external means Fire, lightning or external
explosion or theft Riot, strike or malicious act Flood, inundation, storm, tempest, typhoon
hurricane, tornado, cyclone.

6. GLASS BREAKAGE:
The company shall compensate the insured for loss or damage to any fixed glass other than
that which are specifically excluded hereunder, caused by any accidental, external and visible
means.

7. CHEQUE FORGERY:
The company shall compensate the insured for any loss to the insured caused by forgery or
material alteration of cheques, drafts or other negotiable instruments issued by, or in favor of,
the insured.

8. EMPLOYERS LIABILITY:
The company shall indemnify the insured against the legal liability of the insured in respect of
any bodily injury sustained by, or the loss of life of, the insureds employees arising out of and
in the course of their employment.

9. ACCIDENTAL, MEDICAL/HOSPITAL EXPENSES TO INSURED:

The company shall compensate the insured for actual and reasonable medical expenses
27
incurred for hospital treatment by the insured in respect of any bodily injury sustained by the
insured arising out of operation at an insured peril as provided for in standard fire and special
perils- buildings and standard fire and special perils- contents and / or burglary, coverages in
this policy and subject to a deductible excess of an amount as may be specified in part 1 of the
schedule.

10. PUBLIC LIABILITY:

The company shall indemnify the insured for those sums that insured becomes legally liable
to pay, including litigation expenses and any amount in compensation, by virtue of the
following items as specified occurring in and about the insureds premises.
 Accidental death or bodily injury to any person other than insured or the insured
employees / staff. This coverage shall be limited to the sum insured for any accident or
series of accidents arising from any one event or cause, and for all accidents during the
period of insurance, and,

 Accidental damage to property of any person other than the insured or insured employees
/ staff. This coverage shall be limited to the sum insured for any one accident or series
of accidents arising from any one event or cause, and for all accidents during the period
of insurance.

11. FIDELITY:
The company will compensate the insured for any direct pecuniary loss sustained by the
insured through act of fraud or dishonesty committed by any salaried employee of the insured
in the insured premises, provided that :

 The loss shall have occurred in connection with the employees occupation and duties
during the uninterrupted continuance of his employment and he discovered within six
months after its happening first of six months after the death, dismissal or retirement of
such person and
28
  The liability of the company in respect of any one person or all persons so employed and
in respect of losses in any one period of insurance shall not exceed the sum insured.

COMPRTITORS
The National Insurance Co. Ltd
The New India Assurance Co. Ltd
The Oriental Insurance Co. Ltd
The United India Insurance Co. Ltd
Bajaj Allianz GIC Ltd.

COMPARISON FROM COMPETITORS

ICICI Lombard GIC Competitors
 Low Premium Better Service High Premium Average Service

 Competitive Discount is High Very less Discount

 Product range is vast Limited products

 Better Customer Retention Retention is very low

 No hidden Charges Many hidden charges

 Policy wordings are documented No documentation

 Main focus is Revenue Main focus is only Profit

 Immediate claim settlement Very long process

29
4.6 MARKET PROFILE OF THE ORGANIZATION

The company is the largest private sector general insurance company in India with a Gross
Written Premium (GWP) of Rs 30,034 million for the 12 months ended March 31, 2007 with
a market share of nearly 12.4% and compounded annual growth rate of over 84% in the last
two years.

The company has over 4,770 personnel in 220 offices spread across 166 locations. From April
March 2007, the company issued over 3.1 million policies across India and settled over 5.9
lakh claims. The company has a claim disposal ratio of 96% (percentage of claims settled
against claims reported) as on March 31, 2007.

ICICI Lombard is the largest private sector general insurance company in India with a Gross
Written Premium (GWP) of Rs. 34,198.4 million for the year ended March 31, 2009. The
company presently has around 4,777 employees in 357 branches. In the financial year ended
March 31, 2009, the company issued over 4 million policies and serviced over 33 lakh claims.
The company has a claim disposal ratio of 97% (percentage of claims) settled against claims
reported as on March 31, 2009

Core Value System

ICICI Lombard's value system is the DNA, which molds and determines the growth and
success of the company and its employees. Strongly embedded and staunchly followed, these
values form the very core of our company's spirit.

Transparency
ICICI Lombard encourages total transparency in all channels of communication (internally
and externally) and complete accountability in customer deliverables. In November 2005,
ICICI Lombard became the first private sector general insurance company to cross the Rs. 10
billion Gross Working Profit (GWP) mark. This record target achieved manifests the trust
garnered by our employees nationwide from its customers.
30
Empowerment
ICICI Lombard provides you the platform to evolve from an employee to a partner in
progressive growth. Since our origin in 2001, our employees have always been empowered to
make decisions that chart their career path. We do not create jobs but build futures.

Passion
The passion to excel with customer focus in mind is what initiates ICICI Lombard to attain
greater milestones. This inherent principle drives our employees to set higher benchmarks of
excellence and performance.

Integrity
Integrity is about honesty, sincerity, sound moral principles, keeping promises and fulfilling
expectations. At ICICI Lombard, integrity is not limited to the organization's capacity to meet
the needs of the stakeholder but also encompasses the vision and values of everyone involved.

Humility
True leadership in the service industry like ours requires humility to keep one's ego sublime
and to serve others. One of the key values we look for and inculcate in our employees is
humility which allows us to keep the interests of our customer and the organization before our
own and work efficiently as a team.

31
 CHAPTER 5

VARIOUS PLAN OFFERED BY ICICI LOMBARD GENERAL

INSURANCE COMPANY LTD

Health Plan:

Family Floater Health Insurance

Family Floater Health Insurance from ICICI Lombard offers you the best of both worlds by
taking care of your family health while helping you save on your taxable income. Secure
your family against financial emergencies during sudden illness, surgery and accidents as
well as against terrorist activities.

Family Floater Health Insurance plan lets you share the entire sum insured among the family
members covered under the policy, without any individual upper limits.

Example:
The Prakash Family is covered under a traditional health insurance plan with individual
policies, of which Mr. Prakash is separately covered for 2 Lakhs, his wife for 1 Lakh, their
son and daughter for 50,000 each. They have paid premium for all these four policies
separately. In an unforeseen situation, wherein surgery and post hospitalization bill of their
son amounts to 1.30 Lakhs, the existing policy will cover only 50,000, while Mr. Prakash
will have to bear the balance 80,000 from his pocket. However, with Family Floater Health
Insurance plan, each member of the Prakash family can utilize the entire sum insured of 4
Lakhs. Thus in the above situation, Family Floater would have covered the entire amount of
1.30 Lakhs of medical expenses of his son.

32
Policy Details:

Key Benefits

 Comprehensive coverage for your family with floater benefit.

 Cashless claims facility at over 4,000+ network hospitals across India.
 Continue to enjoy quality service even during claim settlements with - ICICI Lombard
Health Care - our own in-house health claim processing and wellness team.
 No sub-limits on room rent, doctor fees, and hospital charges or for any disease.
 No co-payments for any disease or any hospitalization expenses.
 Now get a Free health check-up coupon for any one insured family member, valid for
the policy period.
 No health check-up up to the age of 45 years (age as on last birthday).
 Avail tax benefits under Section 80D of the Indian Income Tax Act 1961.
 Buy Online and pay in EMIs without any extra charges.
 Options for one or two year covers (auto renewal) available.
 Get additional Sum Insured for every claim free year.
 Keep your family secured even against expenses for hospitalization due to terrorist
activities.

What is covered

 Medical expenses incurred as an inpatient during hospitalization for more than

24 hours, including room charges, doctor/ surgeon's fee, medicines bills, etc.
 Medical expenses incurred 30 days prior and 60 days post hospitalization.
 Day Care expenses incurred on named advanced technological surgeries and
procedures requiring less than 24 hours of hospitalization. (Including Dialysis,
Radiotherapy and Chemotherapy).
 Pre-existing diseases can be covered after four continuous years of coverage with
the Company.

33
  This policy also covers you for hospitalization in case of Swine Flu / H1N1
influenza.

What is not covered

Exclusions valid for the first 30 Days

 Any illness contracted within 30 days of the inception date of the Policy, except those
that are incurred as a result of an accident. This clause is not applicable on the
subsequent renewals.

Exclusions valid for the first 2 Years

 Treatment of the following diseases/illness/ailment.

 Cataract.
 Benign Prostatic Hypertrophy.
 Myomectomy, Hysterectomy unless because of malignancy.
 Hernia, Hydrocele.
 Fistula in Anus, Piles.
 Arthritis, Gout, Rheumatism.
 Joint replacement, unless due to accident.
 Sinusitis and related disorders.
 Stone in the urinary and biliary systems.
 Dilatation & Curettage.
 Skin and all internal tumors / cysts / nodules / polyps of any kind, including breast
lumps, unless malignant / adenoids and hemorrhoids.
 Dialysis required for chronic renal failure.
 Surgery on tonsils, adenoids and sinuses.
 Gastric and duodenal ulcers.

If the Policy is renewed with us for two consecutive years, the above diseases / illness /
ailments will be covered from the third year. If these are pre-existing diseases at the

34
time of inception of the policy, the same will be covered after the fourth year onwards, subject
to continuous renewal of the policy with us.

Permanent exclusions

 Any illness/ disease/ injury/ pre-existing disease before the inception of the policy.
However, this exclusion ceases to apply if the policy is renewed with the Company for
4 consecutive years.
 Non-allopathic treatment, pregnancy and childbirth related complications, cosmetic,
aesthetic and obesity related treatment.
 Expenses arising from HIV or AIDS and related diseases, use or misuse of liquor,
intoxicating substances or drugs as well as intentional self injury.
 War, riots, strike, nuclear weapon, induced treatment.

Eligibility

 The customer can buy the policy for any family member(s) children and / or
parents.
 The senior most person to be insured should be between 5 to 60 years of age.
 The Proposer needs to be aged above 18 years.
 To cover children aged between 91 days to 5 years, the policy must also cover at
least 1 adult under the same policy.
 Children under less than 91 days old cannot be covered.
 Individual(s) proposed for Insurance whose age is 46 years & above have to
undergo medical tests at ICICI Lombard designated diagnostic centers.
 The policy cover is renewable till the age of 70 year.
 Income Tax benefits u/s 80D can only be availed for policies bought for Self, Spouse,
Children or Parents.
 Floater benefit under the policy is available up to the age of 60 years. All floater policies
thereafter will be renewed under individual plan up to the age of 70 years.

35
Travel insurance plan:

Individual Overseas Travel Insurance

A comprehensive Travel Insurance policy that covers unexpected medical and non-medical
expenses when you are travelling abroad. Avail of benefits like Checked-in Baggage loss/
delay and unique facilities such as Cashless hospitalization worldwide.

Our Travel Insurance plans are the most preferred among others because we cover Pre-
Existing diseases in life-threatening emergency situations.

Policy details :

Key Benefits

 Cashless hospitalization facility available worldwide.

 Avail of quality health care through our tie up with UnitedHealth International (UHI is
a leading US based health care provider).
 No medical check-up required.
 The insurance also covers medical evacuation costs back to India.
 Pre-existing diseases are covered under life-threatening situations.
 Coverage available up to 360 days (Original policy for 180 days and extension for
additional 180 days).
 Pay Per day: Slab rate for first 7 days only, then pay on a per day basis.
 Extend the policy online in case you extend the trip, pay only for number of days
extended.
 This policy also covers you for hospitalization in case of Swine Flu / H1N1 influenza.

36
Travel Insurance - A must have companion for every trip, Choose Wisely
Travel insurance is something you should never forget whenever planning an overseas trip. It
is essential because it covers you against medical and other financial emergencies that may
incur during your travel. While a low cost policy does cover the basics, it usually does not
cover all matters of emergencies. Travel insurance is one area where it is not advisable to buy
the cheapest policy. Always do a little research to determine the levels of cover offered with
the policy.

What you should expect

Typical services offered by travel insurance providers are, emergency repatriation and/or
evacuation, medical expenses incurred while travelling, personal accident cover, travel
cancellation and delay, theft, checked-in baggage loss and delay, loss of passport, missed
connection and personal liability coverage.

Always play safe

Remember that this could happen to anyone, no matter what your age or current health. A
simple accident or a terrible stomach upset due to foreign food can result in the need for this
kind of emergency care. Travel medical insurance coverage will either pay for your treatment
at the nearest medical facility, or allow you to choose the medical hospital or clinic where you
want to avail of the required treatment.

Travel Worry-free
If you think travel insurance is not necessary because you plan to spend all your time just
vacationing and sight seeing, think again. If necessary, pay a little more for adequate
insurance and buy yourself not just peace of mind, but a whole lot more cover where you
may need it most. Travel Insurance is designed to protect your health, belongings, and your
financial investment in your trip, for you and your family.

37
Motor insurance:

Car Insurance:

It took Mr. Manas Pandit only two minutes to know how much money he could save on his
car insurance premium. Get a free quote to know how much Money you could also Save on
your Car Insurance Premium. Car Insurance Premium is calculated based on the car's Model,
Age and the Registration City. Due to this Pricing Model, in some cases, the premium for
similar cars could be higher as well.

Policy Details

Key Benefits

 A digitally signed policy is issued immediately through our online facility.

 Access to over 2700+ network garages for cashless claims servicing across India.
 Optional Personal Accident cover of up to . 2 Lakhs for co-passengers.
 Doorstep surveyor facility to cover your car with a gap in insurance.
 Avail NCB on renewals if no claim is made during the previous policy period.
Know more
 Towing charges up to 1,500 in case of accidental damage (as per the policy
terms and conditions).
 Transfer all No Claim Bonus (NCB) benefits when shifting your motor insurance
policy to ICICI Lombard.
 5% discount for recognized Automobile Associations Members.
 2.5% discount for ARAI approved anti theft device in your vehicle.
 Avail add-on covers for items such as fog lights, music system and seat covers.
 Buy Online and pay in installments without any extra charges.

38
What is covered

Loss or Damage to your vehicle against Natural Calamities.

Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm,

tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.

Loss or Damage to your vehicle against Man-made Calamities.

Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any
damage in transit by road, rail, inland waterway, lift, elevator or air. Personal Accident Cover.

Coverage of 2 Lakhs for the individual driver of the vehicle while travelling, mounting or
dismounting from the car. Optional personal accident covers for co-passengers available.

Third Party Legal Liability.

Protection against legal liability due to accidental damages resulting in the permanent injury
or death of a person, and damage caused to the surrounding property.

What is not covered

 Normal wear and tear and general ageing of the vehicle.

 Depreciation or any consequential loss.
 Mechanical/ electrical breakdown.
 Wear and tear of consumables like tyers and tubes unless the vehicle is damaged
at the same time, in which case the liability of the company shall be limited to 50% of
the cost of replacement.
 Vehicles including cars being used otherwise than in accordance with limitations
as to use.
 Damage to/ by a person driving any vehicles or cars without a valid license.
 Damage to/ by a person driving the vehicle under the influence of drugs or liquor.
 Loss/ damage due to war, mutiny or nuclear risk.

39
Sum Insured

 All vehicles are insured at a fixed value called the Insureds Declared Value (IDV).
 IDV is calculated on the basis of the manufacturers listed selling price of the vehicle
(plus the listed price of any accessories) after deducting the depreciation for every
year as per the schedule provided by the Indian Motor Tariff. If the price of any electrical
and / or electronic item installed in the vehicle is not
included in the manufacturers listed selling price, then the actual value (after
depreciation) of this item can be added to the sum insured over and above the IDV.
 In case of vehicles fitted with bi-fuel system such as Petrol/ Diesel and CNG/ LPG,
permitted by the concerned RTO, the CNG/LPG kit fitted to the vehicle is to be insured
separately at an additional premium of 4% on the value of such kit. You need to
specifically declare this in the proposal form.

40
 CHAPTER 6

RESEARCH FINDINGS

ICICI Lombard Facilitates Anywhere, Anytime Business with Citrix Technology

ICICI Lombard is a joint venture between ICICI Bank the second largest bank in India and
Lombard General Insurance Canadas oldest insurance provider. With over 50 products and
sales of 3,000 policies per day, the company offers a host of insurance solutions to corporate,
small and medium enterprises (SME) and retail customers. ICICI Lombard employs 1,000
workers in 75 locations all over India.

The Challenge: Enable Business Mobility for End-users

The insurance business is information-driven and competitive. In an emerging market where

both private and government players vie for a huge customer pie, ICICI Lombard understands
the value of fast, efficient and centralized information access.

 Not only are ICICI Lombard offices dispersed geographically throughout India, but its
employees are also mobile within their respective locations, bringing sales and services
to the homes and businesses of their clients. The company needed an efficient
technology solution that would enable its employees and agents to administer and
present insurance services and products from anywhere and at any time. Moreover, in
addition to providing information access, the company needed to be able to support
these mobile users cost-effectively, to easily deploy applications to them, and to
minimize the cost of bandwidth required for remote connectivity.

 Said Mr. Sanjay Motwani, national manager, Technology at ICICI Lombard General
Insurance Company Limited, With the diversity of locations at ICICI Lombard and a
high volume of products and sales, we had an acute need to centralize applications for
faster rollouts. This is where Citrix stepped in and streamlined our processes.

41
Implementing a Citrix Solution for Workforce Mobility

 ICICI Lombard partnered with system integrator WIPRO to implement a solution using
Citrix Presentation Server running on HP ProLiant 380 and Dell 1750 Servers.
Currently, more than 400 users connect to the centralized system to access relevant
modules like Premia (an ERP application), Final 7 (insurance accounting system) and
an Investment System via Windows®-based thin clients and laptops. Unlike in the past,
ICICI Lombard insurance employees and agents are now able to structure all types of
the companies available insurance products, independent of time and location.

 Averred Mr. Motwani, Citrix technology has helped to maintain and consolidate our
competitiveness in the marketplace. Our employees enter our system through a WAN,
broadband internet, and dial-up and access the advanced end-to-end policy issuance
framework, including customer profiling, quotation processing, policy issuance and
payment process. The system is designed to generate a policy in less than 10 minutes.

Improved System Administration Generates Cost Savings

 Thanks to the Citrix solution, ICICI Lombard has seen a significant reduction in process
and administrative costs. These savings come largely from the centralized
administration inherent to using Presentation Server, which enables IT staff to deploy,
manage and update users systems without needing to be at the location of the end-user.
Said Mr. Motwani, Our high travel costs were eating into the bottom line, but now our
total reduction in the travel component is 70 percent, which means an annual saving of
about Rs. 10 lakhs.

 Centralized management also allows ICICI Lombard to rapidly scale its system
according to changing business needs. Adding or removing applications or users is
simple and can be accomplished from the main location without travel. This makes the
entire process hassle-free and fast, saving on manpower and costs. In nutshell, with the

42
 effective use of Citrix technology, we have made our operations cost-effective, said Mr.
Motwani.

Better Customer Service for Competitive Advantage

 Another major benefit of the Citrix solution is improved business efficiency, which
translates to faster close-of-sale and higher customer retention. Since employees are
able to access the most up-to-date information and applications on-demand from one
of the companies multiple offices or on the road they can provide clients with needed
information instantly, on the spot. The new infrastructure means customers can be
serviced faster, and all policies related issues can be monitored and tracked at any point
at any time. For instance, a discrepancy can be tracked and corrected immediately,
thereby saving considerable time, and more customers can be efficiently serviced with
existing resources. The higher manageability characteristics of Citrix Presentation
Server also mean negligible downtimes a key element to maintain business mobility
and customer satisfaction.

43
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2006

 ICICI Lombard General Insurance Company Limited (the Company) was incorporated
on October 30, 2000. The Company obtained regulatory approval to undertake General
Insurance business on August 3, 2001 from the Insurance. Regulatory and Development
Authority (IRDA) and has also obtained its certificate of renewal of registration.

Basis of preparation of financial statements

 The financial statements have been prepared and presented under the historical cost
convention, on the accrual basis of accounting, and comply with the applicable
accounting standards issued by the Institute of Chartered Accountants of India (ICAI),
and in accordance with the provisions of the Insurance Act, 1938, Insurance Regulatory
and Development Authority Act, 1999, the Insurance Regulatory and Development
Authority (Preparation of Financial Statements and Auditors Report of Insurance
Companies Regulations), 2002 (the Regulations) and orders / directions prescribed by
44
 the IRDA in this behalf , the Companies Act, 1956 to the extent applicable in the manner
so required and current practices prevailing within the insurance industry in India.

 The preparation of the financial statements in conformity with generally accepted

accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities as of the balance sheet date, reported
amounts of revenues and expenses for the year and disclosure of contingent liabilities
as of the balance sheet date. The estimates and assumptions used in these financial
statements are based upon managements evaluation of the relevant facts and
circumstances as of the date of the financial statements. Actual results may differ from
those estimates. Any revision to accounting estimates is recognized prospectively in
current and future periods.

Significant accounting policies

 Revenue recognition.
 Premium income.
 Premium is recorded for the policy period at the commencement of risk and for
installment cases, it is recorded on installment due dates.
 Premium earned is recognized as income over the period of risk or the contract period
based on 1/365 method, whichever is appropriate on a gross basis net of service tax.
Any subsequent revision to premium is recognized over the remaining period of risk or
contract period.
 Adjustments to premium income arising on cancellation of policies are recognized in
the year in which it is cancelled. Income from reinsurance business.
 Commission on reinsurance business is recognized as income in the year of ceding the
risk.
 Profit commission under reinsurance treaties, wherever applicable, is recognized as
income in the year of final determination of profits and combined with commission on
reinsurance ceded.
45
  Income earned on investments.
 Interest income on investments is recognized on an accrual basis.
 Accretion of discount and amortization of premium relating to debt.
 Securities is recognized over the holding/maturity period on a straight line basis.
 Dividend income is recognized when the right to receive dividend is established.
Realized gain/loss on securities, which is the difference between the sale consideration
and the carrying value in the books of the Company is recognized on the trade date.
 In determining the realized gain/loss, cost of securities is arrived at on Weighted average
cost basis. However, in case of listed equity shares and mutual fund units the profit or
loss on sale also includes the accumulated changes in the fair value previously
recognized in the fair value change account in respect of the particular security, which
is transferred to the profit and loss account on the trade date.
 Sale consideration for the purpose of realized gain/loss is net of brokerage and taxes, if
any, and excludes interest received on sale. Commences subsequent to the balance sheet
date.
 Reinsurance premium.
 Insurance premium on ceding of the risk is recognized in the year in which the risk
commences. Any subsequent revision to premium ceded is recognized in the year of
such revision. Adjustment to reinsurance premium arising on cancellation of policies is
recognized in the year in which it is cancelled.

Reserve for unexpired risk

Reserve for unexpired risk is recognized net of reinsurance ceded and represents premium
written that is attributable and to be allocated to succeeding accounting periods for risks to be
borne by the Company under contractual obligations on a contract period basis or risk period
basis, whichever is appropriate. It is calculated on a daily pro-rata basis subject to a minimum
of 50% of the premium, written on policies during the twelve months preceding the balance
sheet date for fire, marine Cargo and miscellaneous business and 100% for marine hull

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business, on all unexpired policies at year end, in accordance with section 64 V(1)(ii)(b) of the
Insurance Act, 1938.

Claims

Claims incurred comprise claims paid, estimated liability for outstanding claims made
following a loss occurrence reported and estimated liability for claims Incurred But Not
Reported (IBNR) and claims Incurred But Not Enough Reported (IBNER). Further, claims
incurred also include specific claim settlement costs such as survey/legal fees and other
directly attributable costs.

 Claims (net of amounts receivable from reinsures/coinsurers) are recognized on the date of
intimation based on estimates from surveyors/ insured in the respective revenue accounts.
 Estimated liability for outstanding claims at balance sheet date is recorded in the respective
revenue accounts, net of claims recoverable from/ payable to co-insurers/reinsures and
salvage to the extent there is certainty of realization.
 Estimated liability for outstanding claims is determined by management on the basis of
ultimate amounts likely to be paid on each claim based on past experience. These estimates
are progressively revalidated on availability of further information.
 IBNR represents that amount of claims that may have been incurred during the accounting
period but have not been reported or claimed.
 The IBNR provision also includes provision, if any, required for claims.
 IBNER. IBNR/ER liabilities are based on an actuarial estimate duly certified by the
Appointed Actuary of the Company. The assumption used by the Appointed Actuary are
disclosed in note 5.2.4.

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Acquisition costs

 Acquisition costs are those costs that vary with, and are primarily costs related to the
acquisition of new and renewal of insurance contracts viz. commission, policy issue
expenses, etc. These costs are expensed in the year in which they are incurred.

Premium Deficiency
 Premium deficiency is recognized when the sum of expected claim costs and related
expenses exceed the reserve for unexpired risks and is computed at a business segment
level.

Investments

 Investments are recorded at cost on trade date and include brokerage, transfer charges,
stamps etc. if any, and excludes interest accrued up to the date of purchase.

Classification

 Investments maturing within twelve months from balance sheet date and investments
made with the specific intention to dispose off within twelve months are classified as
short term investments.
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  Investments other than short term investments are classified as long term investments.

Forming part of the financial statements

Continued amortization of premium or accretion of discount on a straight line basis over the
holding/maturity period.

Equity shares

Listed equity shares as at the balance sheet date are stated at fair value, being the lowest of last
quoted closing price on the National Stock Exchange or The Stock Exchange, Mumbai.

Mutual fund units

Mutual fund investments are stated at fair value, being the closing net asset value as at balance
sheet date. In accordance with the Regulations, unrealized gain / loss arising due to changes
in fair value of listed equity shares and mutual fund investments are taken to the fair value
change account. This balance in the fair value change account is not available for distribution,
pending realization.

Employee Stock Option Scheme (ESOS)

The Company follows the intrinsic method for computing the compensation cost, for options
granted under the scheme(s). The difference if any, between the intrinsic value and the grant
price, being the compensation cost is amortized over the vesting period of the options.

1. Fixed assets and Intangibles

2. Fixed assets and depreciation.

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3. Fixed assets are stated at cost less accumulated depreciation. Cost includes the purchase
price and any cost directly attributable to bringing the asset to its working condition for its
intended use.
4. Depreciation on assets purchased/disposed off during the year is provided on pro rata basis
with reference to the month of additions / deductions.
5. Depreciation is provided on a straight-line basis, pro-rata for the period of use at the rates
prescribed in Schedule XIV to the Companies Act, 1956 except in the case set out below
where depreciation is provided at a rate higher than those prescribed under Schedule XIV
to the Companies Act, 1956.
6. Depreciation on information technology equipment is provided @ 25 percent.

Intangibles

Intangible assets comprising computer software are stated at cost less amortization. Computer
software including improvements are amortized over a period of 5 years, being the
managements estimate of the useful life of such intangibles.

 All assets including intangibles individually costing less than Rs 5,000 are fully
depreciated/amortized in the year in which acquired.

Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that any asset
may be impaired. If any such indication exists, the carrying value of such assets is reduced to
its recoverable amount and the impairment loss is recognized in the profit and loss account. If
at the balance sheet date there is any indication that a previously assessed impairment loss no
longer exists, then such loss is reversed and the asset is restated to that effect.

 Retirement benefits
 Provident fund
 This is a defined contribution scheme and contributions payable to the

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 Regional Provident Fund Authority is provided on the basis of specified percentage of
salary and is charged to profit and loss account and revenue account(s).

Gratuity

 Gratuity, which is a defined benefit scheme is provided on the basis of actuarial valuation
at year end and is recognized in the profit and loss account and revenue account(s).

Basis of allocation

 Retirement benefit expenses are allocated to profit and loss account and revenue account(s)
on the basis as explained in paragraph 5.1.10.

Foreign currency transactions

 Transactions denominated in foreign currencies are recorded at the rates prevailing on the
date of the transaction. Foreign exchange denominated current assets and liabilities,are
translated at the rates prevalent at the date of the balance sheet. The resultant gains/ losses
are recognized in the profit and loss account and revenue account(s).
 Taxation
 Current tax

 The Company provides for income tax on the basis of estimated taxable income for the
current accounting period in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax

 Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to timing differences between the accounting income as per the Company
financial statements and the taxable income for the year.

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 Deferred tax charge or credit and the corresponding deferred tax liabilities or assets are
recognized using the tax rates that have been enacted or substantively enacted by the
balance sheet date.
 Deferred tax assets are recognized only to the extent there is reasonable certainty that the
assets can be realized in future, however, where there is unabsorbed depreciation or carried
forward loss under taxation laws, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets.
 Deferred tax assets are reviewed as at each balance sheet date and appropriately adjusted
to reflect the amount that is reasonably/virtually certain to be realized.

Fringe benefit tax

 Provision for fringe benefit tax is made on the basis of expenses incurred on
employees/other expenses as prescribed under the Income Tax Act, 1961.
 Share issue expenses.

 Share issue expenses are adjusted against share premium account.

Contingencies

 Contingent losses arising from claims other than insurance claims, litigation, assessment,
fines, penalties, etc. are recorded when it is probable that a liability has been incurred and
the amount can be reasonably estimated.
 A disclosure for a contingent liability other than those under policies is made when there
is a possible obligation or a present obligation that may, but probably will not require an
outflow of resources.

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 CONCLUSION

The challenges in the insurance industry and the accelerating pace of developments have
provided the much-needed impetus to ICICI Lombard to enhance its performance. The
company has witnessed a profit after tax of Rs 317.8 million for the year ended March 31,
2004 as against Rs 32.98 million in the corresponding period last year. The company is
growing at a steady pace and has carved a niche for itself in the general insurance segment.

ICICI Lombard General Insurance has obtained ISO 9001:2000 certification from DET
Norske Veritas (DNV) for establishing a quality management system with regard to settlement
of motor claims, according to a release.

ICICI Lombard has an aggressive future road map. it plans to add various BI related features,
such as time-series analysis and trend analysis, which will be available to the sales force. The
system would also allow rural data mapping, weather insurance, analysing historical weather
information depicting natural catastrophes and allow for corporate database mapping.

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 BIBLIOGRAPHY

BOOKS AND MAGAZINES

Essentials of Marketing; Reddy and Appaniah

Marketing Management; Phillip Kotler

India Today

Business World and Money Regulator.

News Papers

The Times of India

The Economic Times

The Business Standards

INTERNET

www.google.com

www.icicilombard.com

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