ijmss vol.04 issue-07, (july, 2016) issn: 2321-1784...

IJMSS Vol.04 Issue-07, (July, 2016) ISSN: 2321-1784 International Journal in Management and Social Science (Impact Factor- 5.276)

A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories

International Journal in Management and Social Science http://www.ijmr.net.in email id- [email protected] Page 440

OPERATING EFFICIENCY OF PRIVATE SECTOR NON-LIFE INSURANCE COMPANIES OF INDIA

DR. RAJKUMAR1, KESHAV KUMAR2

1 PROFESSOR, INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH, MDU, ROHTAK

2 RESEARCH SCHOLAR, MDU, ROHTAK

ABSTRACT

Indian insurance industry was liberalized in January, 2000, with the passage of the IRDA Act. The liberalization was brought about with the objectives to increase coverage of population, better Choice of products with informed decisions, promote competition, encourage the entrance and joint partnership of foreign players with the Indian insurers, so as to boost innovation, advance economy of operations, enhance customer centricity and service excellence, improve the efficiency of the public sector companies and above all to create economic activity for the purpose of benchmark growth rate.

Keywords: Insurance, General Insurance, Operating Efficiency, Claims Analysis

INTRODUCTION

Insurance provides financial protection against a loss arising out of happening of an uncertain event. A person can avail this protection by paying premium to an insurance company. Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period in case of life insurance or to indemnify the other party on happening of an uncertain event in case of general insurance. The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose risk is covered is known as the 'insured' or 'assured'.

Insurance in India has its history dating back to 1818, when the Oriental Life Insurance company was started by Europeans in Kolkata to cater to the needs of the European community. 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 viz.

(i) The National Insurance Company Ltd.,

(ii) The New India Assurance Company Ltd.,

(iii) The Oriental Insurance Company Ltd. and

(iv) The United India Insurance Company Ltd. GIC incorporated as a company.

At present, the Insurance Regulatory and Development Authority (IRDA), is the statutory body entrusted with the responsibility for regulation of the operations of the insurance companies as well ensuring the orderly development and growth of the insurance business in India. The main concern of the IRDA is the protection of the policyholder‘s interest.




List of General Insurance Companies Public Sector

New India Assurance Company Limited National Insurance Company Limited The Oriental Insurance Co. Ltd. United India Insurance Co. Ltd. Agriculture Insurance Company of India Ltd.

Private Sector

Bajaj Allianz General Insurance Co. Ltd. ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Ltd. Royal Sundaram Alliance Insurance Co. Ltd TATA AIG General Insurance Co. Ltd. Cholamandalam General Insurance Co. Ltd.

REVIEW OF LITERATURE

Arora (1988), in her doctoral work, studied quantitative analysis of the investment policy of GIC and examined critically the role played by the GIC in providing finance to industry. The study revealed that the Investment Policy of GIC evolved within the ambit of the provisions of the Insurance Act 1938, and the guidelines issued by the government from time to time, with a view to maximizing investment income, ensuring safety, liquidity of funds and be consistent with national objectives and priorities under the guidelines.

Manjit Singh &Rohit Kumar (2009) found in their study ‘Emerging Trends in Financial performance of General Insurance Industry in India’ that by creating a competitive atmosphere in the market the entry of private sector Insurance Companies had strengthening of general insurance business.

Shreedevi D and Manimegalai D (2013), compared public and private sector general insurance companies in India. The study found that insurers are operating under conditions of shrinking premiums, growing customer expectations, tightening regulations, tougher competition, rising operational costs, etc. In India, general insurance companies were in a budding stage and performance of The New India Assurance Company was satisfactory as compared to others general insurance companies studied,.

Rabindra Ghimire (2013), used the CARAMEL model to depict the financial efficiency and health of general insurance industry in Nepal and concluded that, the financial efficiency of insurance sector insufficient there. Insurance Regulatory Authority of Nepal should have to pay more attention to maintain the financial efficiency of the insurance industry and the management of insurers need to be more efficient and effective.

CHAITRA K.S (2014) The CAGR of the main source of income i.e., Premium has been increased by 8.56%. The CAGR of the major components of expenses are as follows Claims -12.04%, Commission – 4.88%, operating expenses – 20.06%. It has been noted that the CAGR of income is much lower than the CAGR of the major component of expenses. There has been a drastic increase in operating expenses. Due to the above reasons it is noted that the overall increase in the profits is just 7.89%.

http://www.newindia.co.in/

http://www.nationalinsuranceindia.com/

http://www.orientalinsurance.nic.in/

http://www.uiic.co.in/

http://www.aicofindia.com/

http://www.bajajallianz.com/Corp/index.jsp

http://www.icicilombard.com/

http://www.iffcotokio.co.in/

http://www.reliancegeneral.co.in/

http://www.royalsundaram.in/

http://www.tataaiginsurance.in/

http://www.cholainsurance.com/




OBJECTIVES OF THE STUDY

To measure the operational efficiency of non-life insurance company. METHODOLOGY OF THE STUDY

The study is based on secondary sources of data. The main sources of data are journals, articles, newspapers, online data base of Indian economy, IRDA, various economic surveys etc. To analyse the data, different statistical tools i.e. Anova have been applied with the help of tables, diagrams etc.

Period of Study

The period of study is of 5 years; from 2010-11 to 2014-15.

Tools & Techniques

For the present study, Ratio- Analysis in percentage as an Accounting tools and F-Test ONE WAY ANOVA is used as tools of Statistics.

ANALYSIS AND INTERPRETATION

1. RETURN ON NET WORTH

The return on net worth indicates the profitability of the owner’s investments. Every business is established with a view to getting returns in the form of profit on the amount invested, so there should be a minimum of return on investment. It is also known as return on shareholder’s funds.

1.1 Return on Net Worth of Selected Private Sector Non-Life Insurance Companies of India (Period from 2010-11 to 2014-15) (In Percentage)

Year/

Company

Bajaj Allianz General Insurance Co. Ltd.

TATA AIG General Insurance Co. Ltd.

ICICI Lombard General Insurance Co. Ltd.

2010-11 5.2 (1.14) (1.68)

2011-12 12.90 (6.36) (2.11)

2012-13 23.5 17 15.81

2013-14 24.6 22 21.46

2014-15 25.3 18 19

Source: Annual Report of Accounts of respective companies from IRDA

H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal Return on Net Worth ratio with respect to Profit After Tax and net worth.



International Journal in Management and Social Science http://www.ijmr.net.in email id- [email protected] 43

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have not equal Return on Net Worth ratio with respect to Profit After Tax and net worth.

ANOVA

Sum of Squares df Mean Square Fc Ft

Return on

Net worth

Between Groups 115.812 2 57.906 .709 .512

Within Groups 980.521 12 81.710

Total 1096.333 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = .709 while tabular value of Ft = .512 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Return on Net Worth ratio with respect to Profit After Tax and Shareholder’s fund norms is not equal for selected private sector non-life insurance companies.

2. LIQUIDITY ANALYSIS

Every business must have sufficient working capital for day to day running of the business. This ratio indicates the financial soundness of the business firm in terms of the premium and other revenue generated. For working capital management, Liquidity analysis is of vital importance. Mismanagement or inadequacy of the working capital would result in failure of the business.

2.1 Ratio Of Liquid Assets To Liability Of Selected Private Sector Non-Life Insurance Companies Of India

Year/

Company




2010-11 26.01 21.8 19.77

2011-12 40 17.7 15

2012-13 27 19.2 36.3

2013-14 35.67 18.19 34.4

2014-15 23.47 21.01 28.24


H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal Liquid assets to Liability ratio.




H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have unequal Liquid assets to Liability ratio.

ANOVA


Liquidity

Analysis

Between Groups 304.363 2 152.182 3.320 .071

Within Groups 550.097 12 45.841

Total 854.461 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 3.320 while tabular value of Ft = 0.071 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft .Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Liquid assets to Liability ratio is not equal for selected private sector non-life insurance companies.

3. SOLVENCY TEST

Solvency ratio is one of the various ratios used to measure the ability of a company to meet its long term obligations. Moreover, the solvency ratio quantifies the size of a company’s after tax income, not counting non-cash depreciation expenses, as contrasted to the total debt obligations of the firm.

3.1 Solvency Ratio of Selected Private Sector Non-Life Insurance Companies of India

Year/

Company




2010-11 1.73 1.68 1.56

2011-12 1.56 1.40 1.36

2012-13 1.79 1.61 1.55

2013-14 1.96 1.59 1.72

2014-15 1.82 1.55 1.95


H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal solvency ratio.

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have an unequal solvency ratio.




ANOVA


Solvency ratio

Between Groups .112 2 .056 2.077 .168

Within Groups .323 12 .027

Total .434 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 2.077 while tabular value of Ft = 0.168 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft .Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that solvency ratio is not equal for selected private sector non-life insurance companies.

4. OPERATING ANALYSIS

Analysis of profitability and earning is an important indicator of financial performance and one parameter to measure the profitability is an operational activity of any organization which can properly calculate by applying operating analysis of the respective business. Non-Life insurance is purely a service base industry and operating expense of service industry is like production and labor costs of manufacturing unit that is only because service industry has no concern with material and labor cost it has concern with providing services to their client which has its cost.

4.1 Operating Profit Ratio of Selected Private Sector Non-Life Insurance Companies of India

Year/

Company




2010-11 0.8 27 23

2011-12 4.4 40 21

2012-13 11.0 27 15

2013-14 13.2 39 20

2014-15 24 47 15


H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal Operating Profit Ratio.

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have an unequal Operating Profit Ratio..




ANOVA

Sum of Squares df Mean Square F Sig.

Operating

analysis

Between Groups 1671.461 2 835.731 14.711 .001

Within Groups 681.728 12 56.811

Total 2353.189 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 14.711 while the tabular value of Ft = .001 which show that calculated value Fc is greater than the tabular value Ft. Fc > Ft Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that All the selected Private Sector Non-Life Insurance Companies of India have an unequal Operating Profit Ratio.

Multiple Comparisons

Dependent Variable: OPERATINGAnalysis

(I) Insurance Mean

Difference (I-J)

Std. Error

Sig.

95% Confidence Interval

Lower Bound

Upper Bound

Tukey HSD

Bajaj Allianz General

Insurance Co. Ltd.

TATA AIG General Insurance Co Ltd..

-25.3200* 4.7670 .001 -38.038 -12.602

ICICI Lombard General

Insurance Co. Ltd. -8.1200 4.7670 .244 -20.838 4.598

TATA AIG General

Insurance Co Ltd..


Insurance Co. Ltd. 25.3200* 4.7670 .001 12.602 38.038


Insurance Co. Ltd. 17.2000* 4.7670 .009 4.482 29.918


Insurance Co. Ltd.


Insurance Co. Ltd. 8.1200 4.7670 .244 -4.598 20.838


-17.2000* 4.7670 .009 -29.918 -4.482




Dunnett T3


Insurance Co. Ltd.


-25.3200* 5.6077 .006 -41.909 -8.731


Insurance Co. Ltd. -8.1200 4.3228 .277 -22.520 6.280

TATA AIG General

Insurance Co Ltd..


Insurance Co. Ltd. 25.3200* 5.6077 .006 8.731 41.909


Insurance Co. Ltd. 17.2000* 4.2474 .023 3.099 31.301


Insurance Co. Ltd.


Insurance Co. Ltd. 8.1200 4.3228 .277 -6.280 22.520


-17.2000* 4.2474 .023 -31.301 -3.099

*. The mean difference is significant at the 0.05 level.

5. ASSETS QUALITY ANALYSIS

In this analysis an attempt is made to explore the structure of assets and focus on the existence of potentially impaired assets as well as on the degree of credit control, an insurance company exercises.

5.1 Ratio of Equity share Capital and Total Assets of Selected Private Sector Non-Life Insurance Companies of India

Year/

Company




2010-11 21.03 11.65 11.5

2011-12 20.16 12.82 9.8

2012-13 21.47 9.24 10.91

2013-14 23.88 71.62 10.6

2014-15 28.31 88.15 13.34





H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal Asset Quality norm with respect to Equity Share Capital and Total Assets.

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have unequal Asset Quality norm with respect to Equity Share Capital and Total Assets.

ANOVA

Sum of Squares df Mean Square F Sig.

Assets

quality

Between Groups 1899.193 2 949.597 1.948 0.185

Within Groups 5848.720 12 487.393

Total 7747.913 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 1.948 while tabular value of Ft = 0.185 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Asset Quality norms as per Equity Share Capital to total assets is different for selected private sector non-life insurance companies.

6. MANAGEMENT SOUNDNESS ANALYSIS

A particularly interesting form of financial performance analysis of insurance companies is the analysis of management efficiency. The efficient management shall reflect in operating expenses, and gross premium, affecting overall operating efficiency of the insurance concerns, reflecting management soundness. Sound management is crucial for the financial stability of insurers.

6.1 Ratio of Operating Expenses and Gross Premium of Selected Private Sector Non-Life Insurance Companies of India

Year/

Company




2010-11 20.7 23 15.2

2011-12 18.3 21.9 15.9

2012-13 18.7 21.1 16.1

2013-14 18.2 20.7 16.6

2014-15 17.8 20.4 17.1




H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal Management efficiency with respect to Operating Expenses and Gross Premium

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have unequal Management efficiency with respect to Operating Expenses and Gross Premium

ANOVA

Sum of Squares

df Mean Square F Sig.

Management Soundness

Analysis

Between Groups 68.656 2 34.328 35.305 .000

Within Groups 11.668 12 .972

Total 80.324 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 35.305 while tabular value of Ft = 0.0 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Management efficiency norms as per Operating Expenses to Gross Premium is different for selected private sector non-life insurance companies.





Dependent Variable: ManagementSoundnessAnalysis

(I) Insurance Mean

Difference (I-J)

Std. Error

Sig.


Lower Bound

Upper Bound

Tukey HSD


Insurance Co. Ltd.


-2.6800* .6236 .003 -4.344 -1.016

ICICI Lombard General Insurance

Co. Ltd. 2.5600

* .6236 .004 .896 4.224

TATA AIG General

Insurance Co Ltd..


2.6800* .6236 .003 1.016 4.344


Co. Ltd. 5.2400

* .6236 .000 3.576 6.904


Insurance Co. Ltd.


-2.5600* .6236 .004 -4.224 -.896


-5.2400* .6236 .000 -6.904 -3.576

Dunnett T3


Insurance Co. Ltd.


-2.6800* .6928 .014 -4.733 -.627


Co. Ltd. 2.5600

* .6033 .012 .698 4.422

TATA AIG General

Insurance Co Ltd..


2.6800* .6928 .014 .627 4.733


Co. Ltd. 5.2400

* .5682 .000 3.509 6.971


Insurance Co. Ltd.


-2.5600* .6033 .012 -4.422 -.698


-5.2400* .5682 .000 -6.971 -3.509





7. REINSURANCE AND ACTUARIAL ISSUES:

Reinsurance ratio is also known as risk retention ratio, this ratio indicates the risk bearing capacity of the country’s insurance sector. Reinsurance and Actuarial issue ratios reflect the overall underwriting strategy of the insurer and depict the proportion of risk retained and passed on to the reinsurers and indicates the risk bearing capacity of the country’s insurance sector. IMF prescribes in this standard viz. ratio of Net Premium to Gross Premium.

7.1 Ratio of Net Premium and Gross Premium of Selected Private Sector Non-Life Insurance Companies of India

Year/

Company




2010-11 68.7 68.3 64.7

2011-12 67.3 69.3 64.8

2012-13 71.2 68.8 63.7

2013-14 76.2 71.4 59.8

2014-15 72.3 70.4 52.6


H0 (Null Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have equal Risk Retention norm with respect to Net Premium and Gross Premium.

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have unequal Risk Retention norm with respect to Net Premium and Gross Premium

ANOVA

Sum of Squares


Reinsurance And

Actuarial Issues

Between Groups 292.068 2 146.034 10.865 .002

Within Groups 161.292 12 13.441

Total 453.360 14




From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 10.865 while tabular value of Ft = 0.002 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft .Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Risk Retention norms as per Net Premium to Gross Premium is different for selected private sector non-life insurance companies.


Dependent Variable: ReinsuranceAndActuarialIssues

(I) Insurance Mean

Difference (I-J)

Std. Error Sig.


Lower Bound

Upper Bound

Tukey HSD



1.50000 2.31871 .798 -4.6860 7.6860


10.02000* 2.31871 .003 3.8340 16.2060



-1.50000 2.31871 .798 -7.6860 4.6860


8.52000* 2.31871 .008 2.3340 14.7060



-10.02000* 2.31871 .003 -16.2060 -3.8340


-8.52000* 2.31871 .008 -14.7060 -2.3340

Dunnett T3



1.50000 1.64232 .749 -4.0665 7.0665


10.02000* 2.78388 .024 1.5033 18.5367



-1.50000 1.64232 .749 -7.0665 4.0665


8.52000* 2.38369 .049 .0379 17.0021



-10.02000* 2.78388 .024 -18.5367 -1.5033


-8.52000* 2.38369 .049 -17.0021 -.0379





8. CLAIMS ANALYSIS

The standard is an important indicator of whether their pricing policy is correct or not. It reflects the quantum of claims in the premiums earned. The ratio prescribed for this analysis is Net Claims Incurred to Net Premium. Further Classification can be made on the base of Business Segment of each company.

H0 (Null Hypothesis) :All the Selected Private Sector Non-Life Insurance Companies of India have equal Claim ratio with respect to Net Claim and Net Premium .

H1 (Alternative Hypothesis) : All the Selected Private Sector Non-Life Insurance Companies of India have unequal Claim ratio with respect to Net Claim and Net Premium .

8.1 Ratio of Net Claim and Net Premium of Selected Private Sector Non-Life Insurance Companies of India

Year/

Company




2010-11 79.1 57.29 95.6

2011-12 77.1 36.76 101.4

2012-13 72.4 55.76 84.31

2013-14 72.3 71 83.14

2014-15 71.9 68 81


ANOVA

Sum of Squares


Claims Analysis

Between Groups 2457.895 2 1228.948 13.568 .001

Within Groups 1086.903 12 90.575

Total 3544.799 14





Dependent Variable: ClaimsAnalysis

(I) Insurance Mean

Difference (I-J)

Std. Error

Sig.


Lower Bound

Upper Bound

Tukey HSD


Insurance Co. Ltd.


16.79800* 6.01915 .040 .7397 32.8563


-14.53000 6.01915 .078 -

30.5883 1.5283

TATA AIG General

Insurance Co Ltd..


-16.79800*

6.01915 .040 -

32.8563 -.7397


-31.32800*

6.01915 .001 -

47.3863 -

15.2697


Insurance Co. Ltd.


14.53000 6.01915 .078 -1.5283 30.5883


31.32800* 6.01915 .001 15.2697 47.3863

Dunnett T3


Insurance Co. Ltd.


16.79800 6.20197 .118 -5.2386 38.8346


-14.53000*

4.25163 .048 -

28.8904 -.1696

TATA AIG General

Insurance Co Ltd..


-16.79800 6.20197 .118 -

38.8346 5.2386


-31.32800*

7.22147 .010 -

53.4434 -9.2126


Insurance Co. Ltd.


14.53000* 4.25163 .048 .1696 28.8904


31.32800* 7.22147 .010 9.2126 53.4434


From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 13.568 while tabular value of Ft = 0.01 which show that calculated value Fc is greater than tabular value Ft. Fc > Ft. Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Claim




management for all business norms as per Net Claim to Net Premium is unequal for selected private sector non-life insurance companies.

9. NET COMMISSION ANALYSIS

Commission whether paid or received is an important element for non-life insurer. all the business of non-life insurer with reference to premium generation or risk acceptance is based on the business generated by an agent and agency policy of the organization. Therefore, it is essential to make the analysis of Net Commission with reference to Net Premium. Here Net Commission means commission received is deducted from commission paid after adjusting reinsurance commission.

9.1 Ratio of Net Commission and Net Premium of Selected Private Sector Non-Life Insurance Companies of India

Year/Company Bajaj Allianz General Insurance Co. Ltd.



2010-11 1.7 7 5

2011-12 2.8 6 4

2012-13 3.1 1 4

2013-14 3.6 2 5

2014-15 1.2 2 8


H0 (Null Hypothesis) :All the selected Private Sector Non-Life Insurance Companies of India have equal Net Commission ratio with respect to Net Commission and Net Premium .

H1 (Alternative Hypothesis) : All the selected Private Sector Non-Life Insurance Companies of India have unequal Net Commission ratio with respect to Net Commission and Net Premium

ANOVA

Sum of Squares df Mean Square

Fc Ft

Net Commission

Analysis

Between Groups 18.688 2 9.344 2.549 .120

Within Groups 43.988 12 3.666

Total 62.676 14

From the “F” test one way ANOVA Table as calculated above it shows that Calculated value of Fc = 2.549 while tabular value of Ft = 0.120 which show that calculated value Fc is greater than tabular value




Ft. Fc > Ft. Hence Null Hypothesis is rejected and Alternative Hypothesis is accepted that Net Commission for business as per Net Commission to Net Premium norms is not equal for selected private sector non-life insurance companies.

FINDINGS AND CONCLUSIONS

1. Return on Net Worth ratio with respect to Profit After Tax and Shareholder’s fund norms is not equal for selected private sector non-life insurance companies.

2. Liquid assets to Liability ratio is not equal for selected private sector non-life insurance companies.

3. Solvency ratio is not equal for selected private sector non-life insurance companies. 4. All the selected Private Sector Non-Life Insurance Companies of India have an unequal Liquid

assets to Liabilities Ratio. 5. Asset Quality norms as per Equity Share Capital to total assets is different for selected private

sector non-life insurance companies. 6. Management efficiency norms as per Operating Expenses to Gross Premium is different for

selected public sector and private sector non-life insurance companies. 7. Risk Retention norms as per Net Premium to Gross Premium is different for selected private

sector non-life insurance companies. 8. Claim management for all business norms as per Net Claim to Net Premium is unequal for

selected private sector non-life insurance companies. 9. Net Commission for business as per Net Commission to Net Premium norms is not equal for

selected private sector non-life insurance companies.

Sr. No.

NAME OF THE HYPOTHESIS

Fc

Ft

Fc > Ft

OR

Fc < Ft

Ho

H1

1 Return On Net Worth .709 .512 Fc > Ft Rejected Accepted

2 Liquidity Analysis 3.320 .071 Fc > Ft Rejected Accepted

3 Solvency Test 2.077 .168 Fc > Ft Rejected Accepted

4 Operating Analysis 14.711 .001 Fc > Ft Rejected Accepted

5 Assets Quality Analysis 1.948 .185 Fc > Ft Rejected Accepted

6 Management Soundness Analysis 35.305 .000 Fc > Ft Rejected Accepted

7 Reinsurance And Actuarial Issues 10.865 .002 Fc > Ft Rejected Accepted

8 Claims Analysis 13.568 .001 Fc > Ft Rejected Accepted

9 Net Commission Analysis 2.549 .120 Fc > Ft Rejected Accepted




REFERENCES

B. S. Bodla, M.C.Grg Kinds of Agency System / Intermediaries (2007) “Insurance Management Principles & Practice” Deep & Deep Publications.

C. R. Kothari (2004), “Research Methodology”

Annual Reports of IRDA 2010-11 to 2014-15

Arora, M.N. (1987), "The Life Insurance Corporation of India (Financial & Organizational Aspects: 1956 to 1986)," Ph.D. Thesis, Submitted to Faculty of Commerce, Banaras Hindu University, Varanasi.

Manjit Singh & Rohit Kumar (2000), “Emerging Trends in Financial Performance of General Insurance Industry in India”, Indian Management studies, Journal 13, pp (31-44)

Shreedevi D and Manimegalai D (2013) “A Comparative Study of Public and Private Non-Life Insurance Companies in India, International Journal of Financial Management, Vol.2,Issue 1,Feb. 2013, pp13-20

Rabindra Ghimire (2013)“Financial Efficiency of Non Life Insurance Industries in Nepal” The Lumbini Journal of Business and Economics, Vol-III, No.- 2, July -2013,ISSN 2091-1467

www.irda.org

www.google.com

www.generalinsuranceco.com

www.instituteofinsurance.com

ijmss vol.04 issue-07, (july, 2016) issn: 2321-1784...

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