sandhani life insurance by regan ahmed

View with images and charts Sandhani Life Insurance Company ltd. Insurance and risk management Prospects of insurances Life insuranceLife insurance business is analyzed under new business individual insurance , rural new business, development of new products, nee business projects under group insurance, new business projects under group superannuation schemes, business in force, individual and group schemes, lapsation of policies, valuation, working results, investment operations, number of active agents and their business and social responsibilities. General insurances General insurance business in Bangladesh came into hands of private sector. *fire insurance – the amount of gross direct premium income in fire insurance has increased from tk 683 cr in 1990-91to tk1997cr in 1997-98 and is expected to go up to tk 3500cr in 2005. The business of fire insurance is comparatively better than marine insurance but better than miscellaneous insurance. *marine insurance- the gross direct premium income of marine insurance has increased from tk524cr in 1990-91 to tk 1055cr in 1997-98 and is expected to increase up to tk. 1550cr in 2004-2005. it is very slow progress of marine insurance. *miscellaneous insurance- the gross direct premium income of miscellaneous insurance has increased from tk 1706cr in 1990-91 to tk 5034cr in 1997-98 and is expected to rise up to tk 9000cr in 2004-05. The insurance of motor vehicle and other accident insurance have become compulsory. Problems of insurance in Bangladesh: • • • • •

Bangladesh is not much suitable place for this business because of political situation and corruption. People are not educated much and our insurance companies can’t make greater advertisement about their policies. Ours have a religious binding that does not make this policy spread over. Our people are not confident over these policies. This has a process conflict in taking policy.

Profile Sandhani Life Insurance Company Limited incorporated as a public limited company on 23 January 1990 under the Companies Act 1913 to conduct life insurance

business the Insurance Act 1938. On 28 March of the same year, the company obtained certificate for commencement of business. It was registered with the Controller of Insurance on 25 April 1990, following which it immediately commenced life insurance business. The authorized capital of the company is Tk 200 million divided into 2 million ordinary shares of Tk 100 each. Its paid up capital is Tk 30 million. The sponsor shareholders subscribed 50% of its paid up capital and the remaining 50% was paid by the public shareholders, of which 20.63% by institutions and 29.37% by individuals. The company went public in January 1996 and was enlisted with the Dhaka Stock Exchange on 6 April 1996. Up to December 1999, the company sold 20,932 individual life insurance policies. The premium incomes of the company in 1999 were Tk 160.50, which comprised Individual Life Insurance Tk 159.44 million (first year premium Tk 76.99 and renewal premium Tk 82.45 million), group insurance premium Tk 0.12 million and vehicle loan premium Tk 0.95 million. That year it paid re-insurance premium of Tk 0.44 million to the JIBAN BIMA CORPORATION. The value of life insurance claims settled by the company was Tk 43.10 million. The company received significant amount of income in the form of interest on National Investment Bond, fixed deposits, short-term deposit accounts, interest on policy loans and motorcycle loans to staff, and dividend income. Total income on these counts was Tk 8.50 million in 1999. The management of the company is vested in a 32-member board of directors with the managing director as the chief executive, who is assisted by 5 executives. [S M Mahfuzur Rahman] Highlights • • • • • • • • • • • • • • • •

Date of incorporation-January 23, 1990 Obtained certificate for commencement of business-march 28, 1990 Registered with the controller of insurance- April 25, 1990 Prospectus issued for floatation of public shares- January 01, 1996 Subscription opened-January 08, 1996 Subscription closed – January 14, 1996 Listed with Dhaka stock exchange (DSE) - April 06, 1996 Amount of public subscription-Tk.19836000 Amount of total subscription- Tk. 39672000 First trading of shares on DSE floor- April 06, 1996 First A.G.M of public share holder- august 25, 1996 First election of Directors from public subscriber- November 20, 1997 Settlement of SLIC shares in Demote mode in the CDS April 27, 2004 No. of directors- 30 Life fund at the end of the year 2005-110.25 corer Bonus share for the year 2005- @20 share for every 100 shares (20: 100)

Board of directors: Chairman- A-haj Md. Mckbul hossain

Vice-chairman- Ahasanul islam titu Manageing director-M.A. karim Additional managing directior- ahasanul islam Deputi managing director- Masudur rahman Grehasanchaya project- amiya kanti das gupta, Sr. general manager Islami takful & I.D.P.S project- abu musa siddiqui, executive director Grameen I.D.P.S project- Md. Shahjahan azadi, DED D.P.s project- piplu biswas , ded Divisional executive director- haji. Md. idris miah talukdar, amal kanti das, md. Abdul ajij munshi, & goutom kumar chowdhury SR. executive vice presidents- haradhan kumar barua, morshed alam , siddiqui & khokon kumar shil. Deputy General managers-nemai kumar saha, abul kalam azad, din mohammad. Financial glimpses of SLIC

taka in corer

FY 2001

FY 2002

FY 2003

FY 2004 FY 2005

Authorized capital

20.00

Paid-up capital

3.00

3.42

3.97

Premium

26.26

34.53

51.23

70.62

112.12

Claims

7.35

10.12

11.36

14.85

15.90

Assets

38.13

48.05

66.83

96.68

139.04

Life fund

22.96

30.66

46.44

70.14

110.25

Dividend/bonus share

12℅

14℅

16℅

20℅

Goal of Sandhani life insurance co. ltd.Though Life insurance is treated as a business for security it is very safe, better & profitable to invest in it. Eyeing on these goals Sandhani life insurance dedicated them to this business. They start this business for the large number of people with e the objective of serving better insurance policy. Collecting little amount of savings from peoples, they made a bigger contribution to the country’s welfare programs and made a profitable investment in various project. They have made many good employment programs for the large number of unemployed people for their earning.

At last their most desired goal is to make the Bangladesh happier and economically strong. Deposit pension scheme policy of Sandhani life insurance company ltd. • • • • •

DPS Grameen DPS Sandhani DPS Islami DPS Grameen Islami DPS

DPS & Grameen DPS This is a policy applied by Sandhani life insurance company ltd. as an exceptional one for better societal development. This policy is alike deposit pension scheme of bank with risk taking quality. By this policy the people can get a certain amount of money after a certain period or may take this money as a pension system. As well as it consider economical certainty after the death of the policy holder. Characteristics: *amount required for insurance: lowest – tk 12000 Highest- tk 192000  Term of insurance & age of policy holder: for this policy 12 years of term may be taken. It is must for this policy that age for the policy holder must be in between 18 to 50 years.  Installment: the installment has to pay up to the date which the policy holder takes. It has to pay as a monthly system. Other hand if the policy holder wishes to pay in advance, that person will not get chance to pay one year of installment in advance.  Amount for installment: for this insurance policy the installment amount is required –as 100tk, 200tk, 300tk,500tk highest limit of tk 1600 per month  Return in life: Sandhani life insurance company ltd. returns the full amount of money after the completion of the term if the policy holder remains alive. After 6 months if the policy holders don’t take the survivals benefit he/she may take this money as pension. For this situation the term for pension will be 6 years or 12 years.  Return after death: if the policy holder died in between the policy term the companies will confirm return of the amount with profit to the recognized person. Sandhani DPS This is a policy applied by Sandhani life insurance Co. Ltd. as an exceptional one for better societal development. This policy is alike deposit pension scheme of bank with risk taking quality. By this policy the people can get a certain amount of money after a certain period or may take this money as a pension system. As well as it consider economical certainty after the death of the policy holder. Characteristics: *amount required for insurance: lowest – tk 12000-Highest- tk 180000

• Term of insurance & age of policy holder: for this policy 10 years of term may be taken. It is must for this policy that age for the policy holder must be in less of 45 years. • Installment: The installments have to pay up to the date which the policy holder takes. It has to pay as a monthly system. Other hand if the policy holder wishes to pay in advance, that person will not get chance to pay one year of installment in advance. • Amount for installment: for this insurance policy the installment amount is required –as 100tk, 200tk, 300tk highest limit of tk1500 per month • Return in life: Sandhani life insurance company ltd. returns the full amount of money after the completion of the term if the policy holder remains alive. After 6 months if the policy holder doesn’t take the survivals benefit he/she may take this money as pension. For this situation the term for pension will be 5 years or 10 years. • Return after death: if the policy holder died in between the policy term the company will confirm return of the amount with profit to the recognized person. Islami DPS In whole Bangladesh it is now renowned that a kind of small insurance policy is running. Reminding many pious people of Bangladesh Sandhani life insurance co. ltd. applies an insurance policy for these people. The company collects a little contribution from little income people for a certain term. By this policy collecting this income they return a good amount of money to the policy holder. The policy holder may take this money as pension system. Characteristics: *amount required for insurance:

lowest – tk 12000-Highest- tk 200000

• Term of insurance & age of policy holder: for this policy 10 years of term may be taken. It is must for this policy that age for the policy holder must be in less of 45 years. • Installment for contribution: The installments have to pay up to the date which the policy holder takes. It has to pay as a monthly system. Other hand if the policy holder wishes to pay in advance, that person will not get chance to pay one year of installment in advance. • Amount for installment: for this insurance policy the installment amount is required –as 100tk, 200tk, 300tk, 400tk, 500tk highest limit of tk 1600 per month. • Return in life: Sandhani life insurance company ltd. returns the full amount of money after the completion of the term if the policy holder remains alive. After 6 months if the policy holder doesn’t take the survivals benefit he/she may take this money as pension. For this situation the term for pension will be 5 years or 10 years • Return after death: if the policy holder died in between the policy term the company will confirm return of the amount with profit to the recognized person Grameen Islami DPS: As the policy of Islami DPS has made great reputation in insurance policy the company launched a new policy named Grameen Islami DPS it is the policy for the company that makes the company return the money by two installments. This policy as like the banks DPS system and it runs through Islamic religion way. Its objective is to make the village peoples mentality towards saving for their much better life.

Characteristics: *amount required for insurance:

lowest – tk. 12000-Highest- tk 200000

• Term of insurance & age of policy holder: for this policy 12 years of term may be taken. It is must for this policy that age for the policy holder must be in less of 50 years. • Installment for contribution: The installments have to pay up to the date which the policy holder takes. It has to pay as a monthly system. Other hand if the policy holder wishes to pay in advance, that person will not get chant to pay one year of installment in advance. • Amount for installment: for this insurance policy the installment amount is required –as 100tk, 200tk, 300tk, 400tk, 500tk highest limit of tk 1600 per month. • Return in life: Sandhani life insurance company ltd. returns the full amount of money after the completion of the term if the policy holder remains alive. After 6 months if the policy holder doesn’t take the survival benefit he/she may take this money as pension. For this situation the term for pension will be 5 years or 10 years • Return after death: if the policy holder died in between the policy term the company will confirm return of the amount with profit to the recognized person Various insurance policies: • • • • • • • • • • •

term insurance (with profit) mutual term insurance(with profit) predictable term insurance or 3 time installment(with profit) predictable term insurance or 4 time installment (with profit) education & marriage insurance (without profit) pension insurance (without profit) simultaneously saving insurance (with attractive profit) education related insurance child security insurance (with profit) group insurance co-operative insurance

Term insurance The objectives of term insurance are to support the policy holder’s family in case of his death, in old age or in retired life.  After the completion of the term the company returns the deposited amount with profit to the policy holders recognized person.  In case of death of the policy holder before the completion of the term, the company will pay full amount with the profit on up to that time.  with this insurance policy the policy holder can take the co-operative insurance paying a little amount of premium  In case of accident, if the policy holder die within 90 days from the accident date, the company will pay two times greater of the policy holders’ amount.  This policy can be taken in age between 20 to 55 by certifying from a doctor.

Premium system: • • • •

Without annual premium in case of 6 months term the policy holder have to pay 2℅ for three months term installments the policy holder have to pay 3℅ of the amount monthly premium is not applicable Insurance amount is income tax free

Mutual term insurance (with profit) This term is alike the term insurance .this insurance may good for those person who has importance on each other. In certain term if any of the died, the other person will get the money with profit. After completion of the term he person will get the full amount. This policy is useful for joint contributed business person or over husband and wife. For this the wife has to be educated. For taking this the persons have to fill two form and both of them have to be certified by a doctor. The lowest limit of amount required for this insurance policy is tk.30000 Propose able age for this policy is up to 50 years. Predictable term insurance or 3 time installment(with profit) Sandhani life insurance company ltd. gives much better service from this three time installment policy. The insurance amount is paid up by three terms that’s why it is known as three time installment policy. This policy may be for 12, 15, 18, 21 or 24 years. Bonus is earned in a natural way. But which part of the insurance amount is paid as an installment, no bonus will be earned on that portion. Premium system: *without annual premium in case of 6 months term the policy holder have to pay 2℅ *for three months term installments the policy holder have to pay 3℅ of the amount *monthly premium is not applicable] Predictable term insurance or 4 time installment (with profit) Sandhani life insurance company ltd. gives much better service from this three time installment policy. The insurance amount is paid up by 4 terms that’s why it is known as three time installment policy. Policy holder gets two help from this,  The insured amount has to pay by four installments in this policy, that’s why it can serve financial requirements so many time in future

 In spite of paying 1st, 2nd, 3rd installment if the policy holder died in between the certain time then the company will pay the whole amount to the policy holders recognized person. This is an attractive sight for this policy. Premium system: *without annual premium in case of 6 months term the policy holder have to pay 2℅ *for three months term installment the policy holder have to pay 3℅ of the amount *monthly premium is not applicable. Group insurance: Support • • • •

Group insurance serves the financial certainty to the employee of a firm. For progress of the organization this insurance policy helps the employer to keep their employee in the organization. The aged employee of an organization may go to planed retirement and these attract the young peoples. In retirement the employees don’t rely on firm’s fund.

In case of compensation: • • •

*in case of accident , if the policy holder die within 90 days from the accident date , the company will pay two times greater of the policy holders amount. *from any accident if the policy holder lose his ability to work the company will pay full amount. *for partly confirm inability the company will pay the half.

Accident: Intentional or unnatural accident is not applicable for insurance. Natural death is granted for accident. Suicide, mental illness, war, riot, any kind of poision, gas or something which is harmful for life is not applicable for insurance. Sandhani Life Insurance Company considers two types of insurance for accident, DIAB and PDAB. • Death insurance for accident (DIAB) - In case of accident, if the policy holder dies within 90 days from the accident date, the company will pay full policy holders amount. • Death or paralysis from accident (PDAB)

Condition of accident Death Damage – one leg/ one eye/ one hand

Damage- both leg & hand/ both eye/ one hand & one leg

Full or confirm paralysis

Company’s annual Report ‘05 Sandhani life insurance co. ltd. Balance sheet As at 31 December 2005 particulars

Payment Insured amount with equal amount extra Half of the insured amount will be paid immediately and main amount of money will be paid after the completion of the term Equal of the insured amount will be given immediately. Premiums will be considered in future. After completion of the term the full amount will be given. Next ten years the company will give 10℅ of the amount annually. Premiums will be considered in future. After completion of the term the full amount will be given.

Taka 31-dec-2005

31-dec-2004

Capital & liabilities Shareholders’ capital Authorized 200000 ordinary share of tk.100 each Issued, subscribed & paid-up 396,720 ordinary share of tk. 100 each Balance of funds and accounts Life insurance fund Liabilities and provisions Amount due to other persons and bodies Carring on insurance business Estimated liabilities in respect of outstanding claims whether due or intimated Sundry creditors…………………………………… Premium deposits Provision for share value fluctuation account Proposed dividend Provision for doubtful debt Total Property and assets loan On insurance policies within their surrender value vehicle loan scheme Investment (at cost) Statutory deposit with Bangladesh bank Jatiya biniog bond Shares Debentures Agents balance Outstanding premium Interest , dividends & rents accruing but not due Sundry debtors Cash bank and other balances On fixed deposit On current and STD account with banks collection in hand cash in hand forms, stamps and stationary in hand Other assets Fixed assert ( at cost less depreciation ) total Sandhani life insurance co. ltd. Cash flow statement For the year ended 31 December 2005

200000000

39672000

34200000

1102476744 248237210 757764 110423401

701445049 231184384 326246 104030451

102423876 19058833 7000000 7934400 638936 1390385954 4018448 2918771 1099677 391285278 2000000 314000000 73285178 2000000 48293 8602133 78898301 14956859 757600000 391600000 112928638 243492584 3839056 5907306

101027165 15056591 5000000 5472000 271531 966829433 1526073 648620 877453 246933561 2000000 178500000 64433561 2000000 198294 11843413 40007326 14034973 554005800 253500000 81451451 214179455 2117997 1756897

134809058 1390385954

98279993 966829433

taka Particulars 31-dec-05

31-dec-04

Cash flow from operating activities 1128491288 Collection from premium Other income received

709523612 349971

261458

(152655149 )

(119524557)

Payment for re â&#x20AC;&#x201C; insurance, management expenses & (596238931 other )

(359768795)

Income tax paid / deducted

(4239634)

(2006215)

Net cash from operating activities

375707545

228485503

Investment made in share

(9829431)

(16764642)

Proceeds from sales and investment

3145217

49128360

Purchase of jatiya biniog bond

(135500000 )

(178500000)

Acquisition of fixed assets

(48052647)

(11529533)

Loan against policies paid

(2706455)

(435910)

Loan against policies released

214080

217200

Interest , dividends & rent received

20725185

21707691

Net cash used in investment activities

(172004051 )

(136176834)

Payment for claims

Cash flow from investment activities

Cash flow from financing activities

Dividend not claimed Net cash used in financing activities

58290

255361

58290

255361

203761784

92564030

554005800

461441770

757767584

554005800

Net increase in cash & cash equivalents Cash & cash equivalent at the beginning of the year

Cash & cash equivalents at the end of the year Sandhani life insurance co. ltd. Statement for life insurance fund For the year ended 31 December 2005 particulars

Taka

assets

31-dec-05 1390385954

31-dec-04 966829433

Loans

4018448

1526073

Investments

391285278

246933561

Outstanding premium

8602133

11843413

Agents balance

48293

198294

Interest, dividends & rents ( accruing but not due)

78898301

40007326

Cash and bank balances

751860278

551248903

Stock( forms, stamps & stationary)

5907306

2756897

Sundry debtors

14956859

14034973

Fixed assets( at cost less depreciation)

134809058

98279993

Less: liabilities

248237210

231184384

Amount due to other persons or bodies

Carrying on insurance business

757764

326246

Claims whether due or intimated

110423401

104030851

Sundry creditors

102423876

101027165

Premium deposits

19058833

15056591

Provision for share value fluctuation account

7000000

5000000

Proposed dividend

7934400

5472000

Provision for doubtful debt

638936

271531

Total gross fund

1142148744

735645049

Less share holder equity (paid –up capital) Life insurance fund

39672000 1102476744

34200000 701445049

Estimated liabilities in respects of outstanding

Sandhani life insurance co. ltd. Form “AA” Classified summary of the assets in Bangladesh As at 31 December 2005

Name of assets

Book value

Market value

remarks

Bangladesh govt. securities (NIB)

314000000

At cost

Bangladesh Municipal, port improvement trust security including Debenture

Debenture railways

Guaranteed & preference shares of Bangladesh railway

Annuities of Bangladesh railway

Ordinary shares of railways in Bangladesh

Other debentures of concern in 2000000

2000000

At cost

Sl.

Bangladesh

Bangladesh 08

Other guaranteed & preference shares of concern in Bangladesh

Other ordinary shares of concern 73285278 in Bangladesh

60609597

Market value

Loans on the companyâ&#x20AC;&#x2122;s policies effected in Bangladesh within 4018448 their surrender value

4018448

Realizabl e value

Loans on mortgage of property of Bangladesh

Loans on personal security to person domiciled & resident in Bangladesh

Other loans Bangladesh

Statutory deposit with Bangladesh 2000000 bank ( NIB)

2000000

At cost

Cash on fixed deposit in banks

391600000

Realizabl e value

Cash & collection in hand & 360260278 current , STD accounts in banks

360260278

Realizabl e value

Interest , dividend & rents either outstanding or accrued but not 78898301 due

78898301

Realizabl e value

Other assets

granted

*agents balance

48293

Realizabl e value

*outstanding premium

8602133

Realizabl e value

*Sundry debtors

14956859

Realizabl e value

*forms stamps and stationary

5907306

At cost

*fixed assets

134809058

total

1390385954

1377710273

Written down value