Life Insurance Companies - Comparison

The premium figures for September 2017:

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Individual Single Premium - Single premium policies like Annuity, LIC’s Jeevan Utkarsh, etc. One time premium. Covers a single life.
Individual Non-Single Premium - Regular ULIPs, term plans, etc. Covers a single life.
Group Policies - Issued to a group of lives. Example: HDFC has issued group cover to JetPrivilege members, ICICI Pru Life has covered all our organization employees through term cover, a bank having tie up with insurance company for group term cover, etc.

For more and detailed understanding you may go through the DRHP’s of the insurance companies.

This demonstrates good brand value. Also the surrenders are low and the persistency higher comparatively. Group covers are mostly high margin policies like term plans. Further if we see HDFC has more Group Single cover so it is a steady income for them.

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@drgrudge,

Thanks for the clarification. But one things remains unclear. Group “Single” Premium is highest for HDFC Life. So although these are “group” policies, these are “single” premium policies. ie. one time premium as per my understanding.

If so, then there is no question on recurring income or persistency. Also my guess is group policies would be highly negotiated policies (lower margins for insurers) as compared to individual policies due to large size. Am I missing something here?

Under Group Single only one life is insured. Group here means an institution with a potential number of lives that may be insured. Note that not all of the members in the group will opt for a policy. For example, of all the JetPrivilege members, not all would opt for a HDFC Life policy.

Even though it might look that there is a “guaranteed” premium without renewal issues, there still maybe renewal required (from the persons who wants their life insured again). If I go for a term cover this year, next year I might choose not to insure again. Further it might not be as sticky as you might think. Our organisation had tie up with LIC for group term cover for us two years back. Last year, we went with PNB Metlife. This year it is ICICI Pru Life. :smiley: Thus our lives were insured every year but not with the same insurer!

I’m not sure about the “highly negotiated policies” or what monetary benefit is there for the group. In our case the premium had only gone up on renewal this year. HDFC Life pays some commission for every policy sold through JetPrivilege.

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HDFC LIFE IPO on the way…

Thanks @drgrudge for starting this thread and everyone else for some very useful information to understand life insurance sector. I have been trying to read about insurance sector in general and it is obvious that there are plenty of new terms/ratios when one is trying to understand/value insurance business. Following are some notes/observations ->

REGULATIONS

Investment of Float
IRDAI mandates that

  • Minimum 30% of the assets need to be invested in state and central government securities
  • Minimum 15% of assets to be invested in housing & infrastructure/social segments
  • Other approved investments can be at maximum 70% (things like Fixed Deposits, Commercial Papers, Equity etc.)
  • Maximum of 15% into other (non-approved) investments

Because of first two things, overall yield on investments tend to be restricted for insurance companies (9-10% is what I have seen). These can really be a hindrance to some managements that are very good at equity markets etc. On the other hand, these tend to limit excessive risk taking, over-exuberance to some extent.

Expenses
IRDAI Expense Management Regulation (applicable to life and non-life insurers) states that management expenses can not be more than -

  • Amount of commission paid to insurance agents
  • Commission & expenses reimbursed on reinsurance award
  • Operating expenses

e.g. Max Bupa has management expenses beyond this limit and they have to do adjustments to accounts

Commission
IRDAI puts limit on amount of commission that can be paid to agents/intermediaries in both life and non-life segments e.g. commission on life term plans is capped at 7.5%.

Following link has fairly decent summary -
https://www.basunivesh.com/2017/01/10/life-health-and-vehicle-insurance-agents-commission-in-india/

Bancassurance
A corporate agent (like ICICI bank or SBI) can have arrangement with maximum three life insurers. This regulation almost pushes for insurers with non-bank promoters and banks with no insurance business to come together.

TERMS/ACRONYMS
Premium
GDPI - Gross Direct Premium Income
GWP - Gross Written Premium = Renewal Premium + New Premium

Claims
IBNR - Incurred But Not Reported
IBNER - Incurred But Not Enough Reported

Generally you have to provide for IBNR + IBNER in the revenue statements.

Participating/Non-participating
Participating - Policyholders participate in profits created through investments e.g. ULIP based insurance products
Non-Participating - Policyholders do not participate in investment profits e.g. Term protection plans

RATIOS

  • Combined ratio measures overall underwriting skills and operational efficiency of the insurer. Combined ratio below 100% means there is underwriting profit and vice versa.

    Combined Ratio = (Net Claims + Commission + Operating Expenses)/Net Premium

  • Loss ratio measures the underwriting efficiency of the insurer. A lower loss ratio means either the quality of underwriting is very good or the insurer is rejecting too many claims.

    Loss Ratio = Net Claims/Net Premium

  • Another important ratio is persistency ratio and it is quite intuitive to understand. Higher the persistency ratio, higher the renewal premium at lower operations costs/commission and lower the total expenses. The new premium acquisition cost (operational + commission) tend to be very high in first few years and tend to taper off over the years.

INDIAN EMBEDDED VALUE (IEV)
Valuing insurance company remains one of the most challenging tasks and more explanation, details on this front is most welcome. EV or IEV seems like most commonly accepted metric to value insurance company. SBI Life DRHP provides a full chapter on these concepts and it is a very good read.
Link - http://www.investmentbank.kotak.com/downloads/sbi-life-insurance-DRHP.pdf

Following is just a top summary to get the feel of what IEV is ->

IEV = ANW + VIF
where
ANW - Adjusted Net Worth
VIF - Volue of In-force Business

Futher,
ANW = FS + RC
Where
FS - Free Surplus -> value of any excess assets over (liabilities + RC) than can be immediately distributed to shareholders
RC - Required Capital

Moreover,
VIF = PVFP - FCoC - TVFOG - CRNHR
where
PVFP - Present value of future profits
For non-participating products, PVFP = Net Cash Flows from VIF + Investment Income - Taxes
For participating products, PVFP = Transfer to shareholders accounts - Taxes

FCoC - Frictional Cost of Capital = Taxes on Investment Income + Investement Expenses for Assets backing RC + Shareholder’s Fund Expenses

TVFOG - Time Value of Financial Options & Gurantees - Did not understand what this entails

CRNHR - Cost of Residual Non-Hedgeable Risks
This covers things like mortality & longevity, pandemic & catastrophe, persistency, mass lapse, expenses & inflation, operational risks - basically things not covered by anything above.

VALUE OF NEW BUSINESS (VONB/VNB) and MARGIN (VNB MARGIN)
VONB is computed along similar lines as VIF.

VNB Margin = VONB/APE
where
APE - Annualized Premium Equivalent = NBP + 10% of single premiums
NBP - New Business Premium

VONB and VNB margin captures the quality, impact of new business on value.

OTHER INTERESTING THINGS
Reinsurance
Most of the insurers get part of their policy liabilities re-insured to manage the risks and it remains one of the most important risk management tool. For acquisition of these assets, re-insurers pay commission and other administrative expenses to insurers. e.g. SBI life has 25% of the assets re-insured. For ICICI Lombard (non-life), net commission outgo is negative because commission received from re-insurers much greater than commission paid to self agents.

Seasonality
Insurance business is seasonal with Q4 being the biggest quarter because a lot of people buy insurance products to avail tax benefits that come with it. Similarly Q1 is usually slow quarter.

Interest Rate & Equities
Due to various reasons, a large part of investment float of insurance companies tend to be in debt instruments. For products which guarantee benefits, falling interest rates can create asset liability mismatch.

For linked products, usually the risk of interest rate changes and equity markets is borne by policyholders and insurers make money by the way of commission etc. For linked products, no float gets generated and liabilities are balanced with corresponding asset side entry. The selling/renewal of these products is linked with equity markets performance and these tend to cause wide variations in Balance sheet.

Bancassurance
Bancassurance channel has lower operational cost compared to individual agents and may lead to underwriting profit. PSU banks generally tend to be better bancassurance partners because they usually do not ask for anything above regulatory maximum commission. Private banks may ask for rewards in other ways.

Understanding of insurance business is WIP. Look forward to more learning!

Best Regards,
Rupesh

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Seems like a skewed incentive for the management to keep commissions as high a legally possible to benefit themselves.

I would suggest watching the PPFAS FOF Insurance as a Business video on Youtube. They provide an in-depth analysis of insurance cos. BS and how macro factors affect each individual items. Was surprised to see that ICICI were more conservative in estimating future interest rates than HDFC before their IPO and merger respectively.

This would mean they are underwriting risks at lower commissions and transferring the risk at higher commissions. But commissions would only be part of the picture, could ICICI be paying more premiums than received to reinsure such risks? Would have to study their Reinsurance operations and the Reinsurance industry as a whole to understand this better.

Thanks for sharing your note.

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@rupeshtatiya, Thanks for compilation and your notes.

Valuation of Insurance Companies talk by PPFAS’s Rajeev Thakkar is a must watch for people wanting to understand the business:
https://www.youtube.com/watch?v=1KEPCz2dlq0

Insurers have to pay premium to re insurers for the risks they pass on. For example if SBI Life has passed 25% of risks to reinsurers then, about 25% of premium (approximately for simplicity sake as it depends on what kind of agreement they have agreed like Quota Share, Excess of Loss, etc.) is to be paid/ceded. Likewise when there is a claim, then only 75% of that will be from SBI Life’s books.

Reinsurance of general insurance business accounted for approximately 95% of the total premium
ceded in Fiscal 2017. [Source: GIC Re’s RHP.] There is something called retention ratio which is the net premium retained by insurers rather than passing to the reinsurers. Always general insurance companies pass more risks to reinsurance (mandatory 5% to be ceded to Indian reinsurer) than life insurance companies. Have a look here: http://stats.oecd.org/Index.aspx?QueryId=25441 the retention ratio for life and non life companies in various countries. Only the risk portion of life insurance can be reinsured and most life insurance policies sold in India are protection-cum-investment products.

The total premium ceded by insurers to GIC Re:

The life insurance cession is on the rise maybe due to increase in certain policies like term insurance or annuity over the years.

I looked in HDFC Life’s DRHP to read more about the Group Cover and found this which may be of relevance:

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The key to understanding insurance business is to make sure we understand the underwriting (conservative vs aggressive) and the risks/long term reward emerging thereof. Clearly linked portion of ULIPS does not have any risk/ additional reward associated with them. So managing linked portion of ULIPS is like an AMC.

On the non linked side and which forms the heart of insurance (protection) we should focus on key assumptions which influence all long term and short term parameter/ratios like EV/RoEV/VNB/VNB and then look into these ratios with contextually and relatively. The key assumptions here are

Blockquote
a) Discount rate assumption
b) Yield expected on investment
c) Mortality assumptions
d) Inflation assumptions for changes in operating expense

Every insurance company need to declare all the above in their public disclosures in L-42 Valuation Basis. Almost all insurance companies have different assumptions regarding the above. I have done a compilation of these assumptions for NON PAR LIFE IN FORCE

Just to get an idea of how these assumptions can change EV/VNB and finally Shareholder returns I tried to find out the current value of a Non Par policy with sum assured of 1 lac:

Now purely from a discount rate perspective SBI Life is creating a VNB/EV higher by 16% for the same policy and HDFC Life by 10.6%. Assuming 10% operating cost a 3% variance in inflation assumption will not change the above numbers by more than 100 bps. Also since yield expectations are similar across so it does not make sense to include them in comparison.

My limited conclusion is
a) ICICI Pru seems more conservative due to a lower discount rate assumption.
b) ICICI Pru is Less risky due to ULIP domination
c) A peer to peer comparison should be done for like products. There is no use comparing AUMs of ULIPs vs Non Linked products.
d) ULIPs AUM should be looked as an AMC business with a 1% (need a better estimate) AUM charge in the long run.
e) Since EV/VNB is an outcome of assumptions on Discount rate/Yield/Inflation/Mortality unless these are standardized there is not much to compare. However we can get an idea as to which insurer is more conservative in its estimates and prudent in its underwiting.
f) Similar to e) VNB Margin independently does not make sense. Also a higher ULIP portfolio necessarily imply a lower VNB margin.

This is as per my limited understanding. I have been working with @rupeshtatiya on this and thanks to him and his , his work and his prodding I have been able to dig into further. Hopefully we can discover more if we question more along this direction.

Dicl: Invested in ICICI Pru and views are biased

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Sharing an article on comparison of Life and Non-Life Insurers and why the Non-Life Insurers are gering up for an IPO

PSU non-life insurers gear up for listing

Can you share the copy paste the content if it is not too big? The anti-virus software (McAfee) is not allowing to open this link

Can we add the “GIC-Re” story here or should we start a new topic ? Would love to here about GIC-Re from the other members.

The article as requested. The Tables and Charts might not be as readable as they are at the original URL.

Not sure why the antivirus is blocking it. Maybe you can add the URL as an exception. Have put the other details in the hidden section so that it doesn’t take too much space.

The equity market will see a spate of initial public offerings (IPOs) of general insurance companies, predominantly of government-owned companies. The Finance Minister in his Budget speech had announced the listing of four state-owned non-life insurers and also the only reinsurance company to make them financially strong and enable them to expand business.

The four state-owned general insurance companies are – New India Assurance, Oriental Insurance, National Insurance, United India Insurance and the only one national reinsurance company General Insurance Company. The listing of insurers will help in improving the quality of disclosures and make companies answerable to investors. It will also help customers to make informed decision regarding their policies, claims and other products-related features.

The listing will help analysts understand the business of non-life insurance companies better. Overall, listing of companies will help focus on profitable growth and consequently enhance their ability to raise capital in the future. The money raised through listing of PSU non-life companies will also help reduce the Central government’s fiscal deficit. The government has set an ambitious target to raise Rs 72,500 crore in 2017-18 from disinvestment, of which it expects to get 15% from the listing of state-owned general insurance companies.
General insurance: industry matrix

The general insurance industry reported highest ever year-on-year growth of 32% in premium collection in FY17 because of crop insurance. There is a steady increase in private sector market share over the last five years to 44% in Fy17. And in July this year, for the first time ever, private sector non-life insurance companies moved ahead of the four state-owned companies in premium collection.

Summary

Table 1: Premium Collection (All Figs. in INR Crores)
Year Premium Collection
PSU Insurers PVT. Insurers
FY07 17283 8647
FY08 17814 10992
FY09 19107 12321
FY10 21839 13977
FY11 26417 17425
FY12 32263 22315
FY13 37072 27951
FY14 40980 32010
FY15 45017 35090
FY16 47691 39703
FY17 59358 53663

Non-life-Insurance-IPO-PSU-1

In FY17, private sector general insurers reported smart growth of 35% driven by crop insurance as they had 73% share in crop insurance business. The government’s focus to improve acreage under insurance will continue to drive volume. State-owned companies reported lower growth of 24.5%. Motor insurance remains the largest segment with 44% market share, followed by health and personal accident cover.

The solvency level of public sector general insurance continues their downward trend amidst high underwriting losses and reluctance to churn equity book. However, despite strong demographic profile, the penetration of general insurance is still abysmally low at 0.72% of GDP. In terms of profitability, private insurance companies have lower claims ratio than state-owned companies.

So, for the state-owned general insurance companies to grow at 20% CAGR over the next five years, the capital requirements is estimated at around Rs 37,000 crore and the private sector will require around Rs 9,000 crore. As part of the government’s plans to list non-life insurers in which it holds stakes, New India Assurance Company Ltd has filed the prospectus for its initial public offering (IPO). Similarly, National Insurance Company will also go for public offering. The country’s only state-owned reinsurer GIC filed its draft documents to raise over Rs 10,000 crore through an IPO. In private sector, ICICI Lombard General Insurance will also go public.

Non-life-Insurance-IPO-PSU-2
Regulatory clearance

In 2016, the insurance regulator, Insurance Regulatory Development Authority of India allowed all non-life insurance companies including standalone health insurers with over 10 years of existence (for life insurance companies, it is 8 years) to mop up money through listing from the primary market. The regulator had also underlined that all companies meeting the stipulation on minimum years of existence for listing for listing should initiate steps to get listed by 2020.

The insurance regulator had also scrapped the usual embedded value norm for listing non-life insurance companies. Embedded value is an actuarial practice used to value an insurance company. In other words, it is the present value of the future profits expected from the business. Instead, these companies will be required to make additional disclosures on risk factors which are specific to these companies such as reserves, asset-liability mismatch, adequacy of premium and current financial position.
Filing for IPOs
General Insurance Company

To kick start the listing process, state-owned reinsurer General Insurance Company (GIC Re) filed a draft red herring prospectus with the Securities and Exchange Board of India to list its shares through an IPO to raise around Rs 10,000 crore. The government will be selling about 107.5 million shares in GIC Re’s IPO, while the insurer will sell 17.2 million new shares, comprising a total of 124.7 million, or 14.2% of the company’s post-issue share capital. The face value of each share will be Rs 5. GIC’s initial share sale is part of the Central government’s divestment plan, under which the department of investment and public asset management has appointed bankers to sell government stakes across over a dozen public sector enterprises through various routes such as IPOs, offers for sale and strategic sales. GIC intends to use the primary proceeds for augmenting its capital base to support the growth of its business and to maintain current solvency levels and for general corporate purposes, according to the DRHP.

In terms of financials of GIC Re, it posted a profit after tax of Rs 3,141 crore in FY17, up 11.2% from Rs 2,823 crore in FY16. The gross premium earned by the company rose 82% in FY17 to Rs 33,741 crore from Rs 18,534 crore in FY16. The solvency ratio, which indicates an insurance company’s financial capacity to meet its short-term and long-term liability was 2.4 in FY17. The regulator’s approved solvency ratio is 1.5.
New India Assurance

Similarly, New India Assurance, the country’s biggest non-life insurer, also filed for an IPO to sell 14.56% stake to raise around Rs 9,000 crore. The government will sell 96 million shares and the company will sell 24 million shares. The company has hired Kotak Mahindra Capital Co. Ltd, Axis Capital Ltd, IDFC Bank Ltd, Nomura Financial Advisory and Securities (India) Pvt. Ltd and YES Securities (India) Ltd to manage the public offering. The company will use the money to augment its capital base to support growth of its business and maintain solvency levels. The government, which owns nearly 100% stake in the company, will get three years from the date of listing to meet the minimum public shareholding norm of at least 25% public float.

New India Assurance was incorporated in 1919. It is the country’s largest general insurance company in terms of net worth and profitability. The company reported a consolidated net profit of Rs 839.36 crore for FY17 on total net premiums of Rs 17,674.77 crore. The net profit stood at Rs 930.35 crore in FY16 and Rs 1,377.32 crore in FY15. As of June 30, New India Assurance has issued 27.10 million policies across all its product segments. The company’s gross written premium expanded at a compounded annual growth rate of 15.18% from Rs 13,200 crore in FY13 to Rs 23,230 crore in FY17. From financial year 2011-12 to financial year 2016-17, NIA’s market share in terms of gross direct premium rose from 14.7% to 15.0%.

Table 2: Profitability of top 10 non-life insurers for F.Y. 17 (All Figs in Rs. Crores)
Gross written premium Gross incurred claims Gross Profit
New India 23021 20239 12%
United India Insurance 16422 14145 14%
National Insurance 14569 13443 8%
Oriental Insurance 11493 10512 9%
ICICI Lombard 10960 9410 14%
Bajaj Allianz 7687 5063 34%
HDFC ERGO 5935 4379 26%
IFFCO Tokio 5636 4123 27%
Tata-AIG 4297 2359 45%
Reliance 4007 3828 4%
Source: IRDAI, General Insurance Council, ICRA

The company offers general insurance as well as cover for threats from accidents such as fire, engineering, aviation, liability, marine, motor and health insurance. As of June 2017, its distribution network across India included 68,389 individual agents and 16 corporate agents, bancassurance arrangements with 25 banks in India and a large number of OEM and automotive dealer arrangements through its agent and broker network. The company has 2,452 offices in India across 29 states and seven union territories. Besides, it has international operations across 28 countries, through a number of branches, agency offices, subsidiaries and associated companies.

New India Assurance has a solvency margin of around 2.2%, better than the 1.5% minimum mandated by the insurance regulator, limiting the need for additional capital for the insurance company. The IPO proceeds will go to the company, which will help to support the fast growth by capital contribution without diluting the solvency margin.
Private sector listing

In the private sector, ICICI Lombard General Insurance, the joint venture of ICICI Bank Ltd and Fairfax Financial Holdings Ltd has also filed the draft red herring prospectus for its initial public offering (IPO). In the IPO, ICICI Bank and Fairfax sell around 86.24 million shares, which will see a dilution of around 20% stake. In May, Fairfax sold 12.18% stake in ICICI Lombard to a bunch of buyers including private equity firm Warburg Pincus Llc for around $383 million (around Rs 2,372.5 crore then). The transaction valued the firm at Rs 20,300 crore. ICICI Lombard offers a range of insurance products such as motor, health, crop/weather, fire, personal accident, marine, engineering and liability insurance, through multiple distribution channels.

To facilitate the IPO, the private sector insurer has appointed Bank of America Merrill Lynch, ICICI Securities Ltd, IIFL Holdings Ltd, CLSA among others to manage the share sale. In fiscal 2017, the insurer issued 17.7 million policies and had a gross direct premium income of Rs 10,725 crore. As of 31 March, it had Rs 15,079 crore in total investment assets. ICICI Lombard General Insurance is the second insurance company from the ICICI group to go public. In fact, in the life insurance business, last year ICICI Prudential Life Insurance Co. Ltd raised Rs 6,000 crore in an IPO, the first public offering by an Indian life insurer. Similarly, Reliance General Insurance Ltd, the non-life insurance arm of Reliance Capital, is also planning to list.
Conclusion

Listing of state-owned non-life insurance companies as well as private non-life and life insurance companies will help in improving the corporate governance structure of the companies. Post listing, the companies will attract top talents and also increased competition will lead to introduction of new products and rationalization of premium charged by them. It will also give opportunity to public at large to invest in one of the safest businesses with a large float. While doing the valuation will be a challenge for insurance companies, there will be enough disclosures to be done by the insurers which include embedded value, segment-wise lapsation of policies and contribution to profitability, which will bring in transparency. These disclosures will help individuals and investors take informed decision and will be a win-win situation for the companies, individual policy holders, investors and other stake holders in the long run. For the government, listing of PSU insurance companies will help it to unlock significant value and make the sector more vibrant and robust.

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HDFC LIFE IPO price fixed at Rs. 275 to 290 per share valuing the company at around 58000 crores (at the upper band) which is slightly higher than ICICI PRU at CMP.

Is it a fair valuation - should we apply for IPO shares - Please do share your feedback.

HDFC Life is valued at 4.4 times EV. It is very pricey. SBI Life was done at 4.2 times (now trading at 4 times). All the more I feel ICICI Pru Life is undervalued at 3.2 times with ~2% dividend yield. I’m increasing my stake in ICICI Pru Life slowly and bought even today. :smiley: ICICI Pru Life is 26% cheaper than HDFC Life with conservative actuarial assumptions.

In all probability, I’ll apply for HDFC Life. I believe the long term story is fantastic and this is a sunrise industry.

========

@Anant and @rupeshtatiya, thanks for your notes. Please post further with your findings and let us know which is the best life insurer to buy now. :wink:

HDFC LIFE’s EV at the end of March 17 was 12400 crores and by Q1 FY18, it was 13200. Q2 numbers have been good as well(from IRDA site), so safe to assume the EV by Q2 FY18 is already around 14000 crores and by Q3 (1 month before it would list), the EV is around 15000 crores. This is not highly forward-looking, just 1 month ahead :slight_smile:
So the real time EV multiple would be less than 4 and that with the parentage credibility, doesn’t look highly overvalued, would you agree? :slight_smile:

Anant,
If ICICI is using a lower discount rate ,wont the PV of future profits or the embedded value be higher than the rest of players.

A discount rate in this context, is just an assumption on the future interest rates. A leeway that insurance accounting provides to cos. These discount rates are used to value the PV of future liabilites and to provision for them accordingly. If an insurance company opts for a lower discount rate assumption they are being conservative, as the PV of their future liabilites increase and provisions increase in tandem. These provisions lower the present profits.

The discount rate that you mention is different, although it maybe for the same time period. The discount rate used in EV calculation is decided by the person valuing it, according to their individual assumptions. Every investor may arrive at a different value for discount rate and the EV.

The discount rates assumed by insurance cos. To value their liabilities has little to do with the EV that investors assign to the same co.

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Thanks Abhinav for the explanation a company like ICICI PRU, where most of the premiums come from ULIPS, what happens when the markets go down and people want to withdraw money. Would the embedded value take a hit, if the market is going to be sideways or in a downturn for the next few years whereas maybe a HDFC would continue getting its premiums from its term policies.
Regarding EV,i was under the impression that profits for future years are calculated and then discounted back.OK, got what you are saying.

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One needs to calculate the components of EV and check how much % of EV is derived from ULIPs. The AUM of ULIPs and the corresponding investment earning are reported separately from the AUM and investment earning of the company on the P&L & B/S. Thinking intuitively if ULIPs go out of fashion, the biggest hit will the management fee component for the co. As all the investment earnings go to the unit holder. One can check the magnitude of this fee on profits to gauge its impact. One can also check the historical ULIP AUMs and plot them with yearly profits to compare.

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