View with images and charts An over View of Provati Insurance Company Limited (PICL)
1.01: Background of PICL Insurance is nothing but a system of accepting risk of the insured by the insurer having consideration in the form of premium to safeguard his interest from any accident. In case of big risk the insurer needs to transfer the risk to re-insurer. Re-insurance means spreading of risk of one onto the shoulder of many. In brief, Re-insurance means insurance of insurance. Whilst it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, Insurance is a method or process which distributes the burden of loss on a number of persons within the group framed for this particular purpose. The concept of grouping together or risk sharing was in existence in very ancient times but gradually developed in its present state through a process of evolution to meet the growing needs of the people in the field of General business and Industries. With a view to catering to the growing demands of this type of service Provati Insurance Company was incorporated in Bangladesh as Public Limited Company by Shares on the 31st January, 1996 under the Companies Act, 1994 and its commencement of business was started from the 25th March, 1996 and the registration from the Controller of Insurance on 31st day of March, 1996 to start general insurance business. The company carries out general insurance business under the Insurance Act 1938 and other applicable rules. The company has its headquarters at Dhaka and in 2001, it had 52 branches. Its management team is led by a managing director, who is also the member secretary of its 14-member board of directors. It has already occupied a strong position amongst its competitors and has made significant contribution in the field of Insurance Industry in the economy .The Chairman and Members of the Board of Directors are well-reputed business personalities and leading industrialists of the Country. 1.02: Nature of Business Undertaken By PICL Classification of Insurance business done by the Provati Insurance Company Limited can be made into two parts viz. Marine & Non- Marine.
i)
Marine Insurance: The policies primarily aim at providing protection in respect of loss, damage or destruction to the subject matter of insurance i.e. hull, cargo and freight caused by perils of the seas or maritime perils like fire, theft, jettison, collision, contact, heavy weather, stranding/ foundering, sinking, war perils and other perils. a) Hull: This refers to the ship, that is to say, hull and machinery of the vessel. The ship is always at the risk of the perils of the seas and, therefore, the ship owner can insure it against probable loss as such. b) Cargo: This refers to goods or merchandises that are being carried from one place to another or are being imported or exported. Such goods or merchandise may be lost, damaged or destroyed by perils of the seas whilst in course of transit and therefore, the owner of goods can always insure against the probable losses. c) Freight: This consideration payable to the ship owner in respect of carriage of goods by owner’s ship. Sometimes the freight is prepaid when it is at the risk of the cargo owner and sometimes the freight is after-paid when it is at the risk owner. Therefore, depending on circumstances either the cargo owner or the ship owner will stand to lose the freight if the goods cannot reach destination safe and sound because of the operation of maritime perils. Insurance can be taken by having insurable interest i.e. by the party at whose risk it would be at the material time.
ii)
Non- Marine: Non Marine Insurance can be classified into three parts viz., a) Fire Insurance: All policies issued under the heading of fire insurance primarily aim at providing protection against financial losses arising out of the operation fir or certain other specified perils. The subject matters of insurance are usually: • • • • •
Building, Furniture, Fixture and Fittings, Plant and Machinery, Goods and Merchandise, Stocks of all kinds.
The policy provides cover in respect of material loss or damage. However, policies are issued in the fire department in respect of consequential losses or loss of profits arising out of material loss. These policies are known as consequential loss insurance or loss of profit insurance. Thus the scope of fire insurance may be considered under two broad headings viz., 1. Material loss insurance and 2. Consequential loss insurance.
b) Motor Insurance: Different types or policies may be issued for different types of motor vehicles. Motor vehicles are usually classified in the following manner: Private Cars, Commercial Vehicles, Agricultural Vehicles, Motor Traders’ Vehicles. Policies issued are usually of the following types irrespective of the class of vehicles: 1. Comprehensive Policy: This policy provides protection in respect of: • Own damage or loss of the vehicle. • Liability of the insured in respect of death or bodily injury to the third party arising out of the use of motor vehicle on the road. • Act liability only policy i.e. legal liability of the insured in respect of death and bodily injury to third party arising out of the motor vehicles use on a public road. 3. Third Party only Policy: This policy provides cover only in respect of the legal liability of the insured arising out of the death and bodily injury to third party and damage to the property of third part in connection with the use of motor vehicle. 1.03: Capital Structure It was established with an authorized capital of Tk 200 million divided into 2 million ordinary shares of Tk 100 each, and a paid up capital of Tk 60 million. Total assets of the company stood at Tk.485.00 million in 2008 compared to Tk.443.00 million in 2007. This includes the book value of the 12 storied building of the company at Tk.89.00 million, the present market value of which is much higher. Seven floors measuring 15,750 sft of the building have been leased out to different parties including 2 Life Insurance Companies who started their functioning recently. The financial position of the company has been reflected in the yearly Annual Report of the Company the copy of which is enclosed herewith.
1.04: Gross Premium Income of the year 2008
Misc. 8%
Motor 13% Marine 18%
Fire 61%
1.05: Company’s Progress at a Glance in Last 5 Years
1.6 1.4 1.2 1 Investment Income Net Profit/ Loss
0.8 0.6 0.4 0.2 0
2004
2005
2006
2007
2008
1.06: Re- Insurance Arrangement The portfolio of Provati Insurance Company limited is fully protected under the reinsurance arrangement made with the Sadharan Bima Corporation a state-owned organization. It has extensive re-insurance arrangement up to any amount with Sadharan Bima Corporation through Surplus treaty, XL, CAT-Xl and Facultative Re-Insurance to meet the need of our valued clients. 1.07: Re-Insurance
This means insurance of insurance. The original insurer gets the risk assumed from the original insured (primary insured), covered (Re-insured) with another insurer (Known as Re-Insurer) for the same reasons as the primary insured does. The primary insurer, here infect becomes the insured (Known as Re-Insured) and the person or body or Company giving him the Re-insurance protection becomes the insure (Known as Re-Insurer). 1.08: Types of Re-insurance Broadly there are two main ways through which Re-insuranc3e may be affected. These are: • Facultative Re-insurance This is the original form of Re-insurance, one of several types of Re-insurance contracts. Participation by Re-insurer in a risk is not pre-arranged through a standing treaty contract. A Re-insurer retains the right of rejection any business ceded to it but this rejection must be notified to the ceding company promptly. Re-insurers are not bound to accept a risk when approached. • Treaty Re-insurance It is a pre-arrangement whereby the direct insurer cedes and the Re-insurer accepts cession within a pre-determined limit. The important feature here is that if sessions are made as per-terms of the treaty, the Re-insurer cannot refuse to accept. The Re-insurer is bound to accept a risk when approached within treaty limit. The Re-insurance arrangement is inevitable for private sector insurance business. The Re-insurance arrangement is made with the Sadharan Bima Corporation. The financial foundation of a company depends upon the Re-insurance arrangement. We may call the Re-insurance arrangement as risk transfer too. Every insurance company has got a limit of Retention ceiling. No. private sector insurance company is supposed to go beyond this Retention ceiling. The amount of own retention is fixed depending upon paid up capital, reserve fund and premium income which is generally 5% of Paid up Capital. As the private sector insurance companies transfer the risk through Re-insurance arrangement with Sadharan Bima Corporation also transfers the additional risk through retro-cession arrangement with some international insurance companies outside the country like Lloyds, Swiss Re-insurance, Singapore Re-insurance, German Re-insurance, Munich Re-insurance. In this way one company transfers its additional risk to another and makes the financial base of its own sound. Therefore, Re-insurance arrangement is the principal and inevitable organ of insurance business. This Re-insurance arrangement is made in two-ways; Facultative Re-insurance and Treaty Re-insurance which are also subdivide into various parts. Generally, in our country different insurance companies adopt different types of arrangement as per their requirement. In recent years various kinds of natural calamities are taking place in the world which causes loss to innumerable lives, endless destruction of wealth and financial catastrophes. Generally storms, flood, earth-quake, land-slide etc. are the main causes of this type of great losses. To meet the great losses of this type a term named “Catastrophiloss or cat-cover” has been introduced. Sometimes it is observed that a company has tom face the losses the value of which is several thousand times higher than that of its own Retention limit. In this circumstance the company will not have to pay any more amounts over and above the retention limit under the system of cat-cover.
Thus the Re-insurance arrangement is the important key of a company. The company which has got a strong Re-insurance arrangement is financially sound and strong in the market. Provati insurance Company limited is a company which fulfils the requirement in this respect . 1.09: Business Condition Different types of natural disasters, flood, cyclone and Sidr have taken economic condition of our country in an adverse direction. The price hike of fuel and daily necessaries has made economic condition worse. This affected the insurance industry adversely. Insurance companies have to work in adverse situation and unequal competition. Unrealistic premium undercut, difficult formalities for registration in bank and for other reasons the whole insurance industry is facing great problem. Instead of this, Provati Insurance Company Limited has earned its premium income Tk. 20.17 crore in 2008 which was Tk. 18.13 in 2007. Company’s profit before tax is Tk. 1.37 crore in 2008 which was Tk. 1.25 crore in 2007. Company has provided VAT of Tk. 1.61 crore in 2008. Company has bought Stamp of Tk. 1.52 crore in 2008 which was Tk. 0.99 crore in 2007. Company has new FDR of Tk. 1.15 crore. The summary is that the business of Provati Insurance Company Limited is in a favorable condition. 1.10: Claim Settlement Provati Insurance Company limited has created a good reputation in respect of expeditious settlement of claims during the past years for any risk covered. Claim is a financial demand against the losses of insured amount cause by accident, incident, natural calamities etc. When an accident occurs, the insured approaches the insurance company black & white for the compensation of the losses caused as per terms & conditions of insurance policy. The company appoints a surveyor to assess the loss of the case and place before the authority for approval of the amount as per assignment. It the management is not satisfied with the assessment of first surveyor, then the company may appoint second surveyor for re-assessment. In case of dissatisfaction of the insured with the first assessment he may also approach the controller of insurance for 2 nd surveyor for re-assessment. After getting all the formalities completed the claim department places the proposal for settlement to the proper authority. When the assessment of surveyor along with the relevant papers is approved the claim department issues a loss voucher to the insured concerned for acceptance. If the insured accepts the loss voucher and confirms, an account payee cheque for the said amount is issued by the company which is collected through the Bank Account of the insured. Thus the claim settlement plays a vital role in insurance business. As such the business reputation of an insurance company depends upon the way of settling the claim. Provati Insurance Company Limited has met up claims of Tk. 5.27 crore in 2008. For increasing company’s goodwill and its welfare the payment of claims was done in a very short time. The company which is expeditious and spontaneous in settling the claim will earn goodwill in the market in comparison to others. Provati insurance Company limited believes in prompt and expeditious settlement of claim which is the best way to rendering services to the insured.
Today Provati insurance Company limited through dedicated services to its client is one of the country’s leading and successful companies with country-wide network. 2.01: Rate Fixation of Fire Insurance by PICL The rate fixation in fire insurance is not as scientific as in life insurance. While calculating the premium, various relevant factors of physical and moral hazards are properly estimated and evaluated in Provati Insurance Company Ltd.The premium must be adequate enough to provide for full payment of claims including catastrophic losses, expenses of management and a margin of profit. 2.02: System of Rate Fixation The actual process of rating consists of three steps: 1. Classification 2. Discrimination 3. Schedule Rating 1. Classification Premium is fixed in relation to the class of risk, the properties are classified accordingly. Properties are generally divided into three main classes: • Common or Ordinary. • Hazardous and • Doubly hazardous Different premium rates are fixed for each class. Again in Provati Insurance Company Ltd. the risk are classified into various classes according to factors affecting fire risk. I. Construction or structure: The construction of the building has always been of great importances in rating. The height of the building, the area, the number of unprotected floor openings, construction of walls, floors, roof etc is considered in calculating the fire hazard. II. Occupancy: The risk considerably varies according to the nature of occupancy. The building may have different risks because of the different substances and processes which they contain. It is essential for companies to change their rates to meet changing business conditions. III. Nature of Flooring: The nature of flooring influences the risk to a greater extent. Existence of wooden floors in the building introduces an additional physical hazard. It may collapse easily causing damage to property. IV. Height: The height adds difficulty in fighting a fire on the upper floors. There may be risk of water damage to property on the lower floors when water is used to extinguish a fire on the upper floors. V. Floor and wall openings: Openings in the floor for lifts and belts constitute higher physical hazard. It may cause greater chances of ignition of fire. VI. Exposure: The chances of risk may differ from property to property according to the degree of exposure. A building or property may be situated in a congested conflagration locality involving greater danger to the property. VII. Lighting ,Heating and Power :The fire may occur due to short circuit .Combustion can also arise from faulty installation and dampness .The lighting system e.g. by gas or oil, leakage of fuel and naked flames cause more hazard to property.
VIII.
Place or Situation: The location of the property , nature of adjoining premises, and the distance from a fire brigade station also cause hazard to the property. Protection: The protection facilities may be public or private. When protection facilities are available the fire may be extinguished in its incipiency. Smaller premium is charged where modern devices for preventing and extinguishing fires are present. Time: The time of loss must be kept into consideration .The annual loss ratio is by no means uniform every year .So, rate fixation must account for good or bad years to determine approximately the real loss.
IX.
X.
2. Discrimination The differentiation of the rates for individual risks in a particular class is known as discrimination .Each additional feature of risk is charged extra premium in Provati Insurance Company Ltd .The better types of risks are encouraged and attracted by the insurer. Lesser premium is charged where fire extinguishing appliances or fire resisting construction are present. The tariff system is based on the law of average and graded schedule is formulated where different rates are ascertained for the different types of risks. Thus, the different risks are put in a specified class, and are differentiated from each other according to the merits and demerits of the individual risk. It aims at a more equitable basis of rating.
3. Schedule Rating It is a plan of Provati Insurance Company Ltd by which hazards with respect to any particular risk are measured. It is defined as “….an empirical standard for the measurement of relative quantity of fire hazard. Schedule rating takes into consideration the various items influencing the peril of fire. It is based on the theory that the aggregate fire hazard of any risk is capable of ultimate analysis into its component factors to each of which could be assigned an appropriate charge. A standard or average premium is determined as a base for calculating the premium. A large number of items, as far as possible, are taken so that the law of average may apply. Larger the number, the more representative will be the rate of premium. Advantages •
The advantages of the schedule rating system are that it provides more equitable treatment of all insured. Due to the systematic treatment of the risk, the premium rates tend approximately the same. • The second advantage is that it reduces friction between the company and the insured because the insured is able to understand how his rate is made in every case. • The third advantage is that it tends to reduce the Fire waste because it encourages proper construction of buildings by intelligently charging for deficiencies from standards and recognizing exceptionally good construction by deductions. • The fourth advantage is that it secures more thorough inspection and rating. :: Items to Be Insured Under Fire Policy Building (above plinth) Machinery (with schedule)
Electric Motor Electric/ Electronic Equipments Transformer/ Sub-station/ Generator Boiler/ pressure Vessel Furniture, Fixture& Fitting, Stock 2.04: List of Hazardous Goods under Fire Policy 2.05 :: Inspection Service by PICL On receiving the notice, the company appoints a surveyor to act make necessary arrangement on behalf of the company. He goes to the site of fire and examines the damaged property and collects all available information. The following steps are taken to check that; • • • •
The policy is in force on the date of occurrence of the loss or damage; The loss or damage is by a peril insured by the policy; The property affected by the loss is the same as insured under the policy Notice of loss is received without undue delay.
After the initial check up, a claim form is issued to the policyholder. The claim form requires the following information. • • • • •
Full description of circumstances of the loss such as date of loss time, the place of fire. Cause of fire. Particulars of the property affected by the loss such as description, value at the time of fire, value of salvage and the claim amount. Statement of other insurances on the property, name of the insurer, the policy number and the sum insured. Sound value of all the property.
The company expert’s survey report contains following information; •
• • • • •
Whether the fire was caused by an excepted peril or was caused by the negligence of a third party or there was any evidence of fraud. So, the cause of fire is clearly obtained. Often the exact cause and origin of fire cannot be accurately established. In such cases the available evidence will have to be carefully examined to support a plausible cause. The amount recommended for payment which is determined on the basis of current market value and under-insurance. Detail and value of salvage. The method to dispose it off. Details of expenses involved in extinguishing fire and salvage corps charges. The position in respect of compliance with the warranties. Apportionment of the loss and expenses among the insurers where there are more than one insurer.
• •
The expert can judge whether the fire has been started at more than one place and whether it is a case of arson. He will inquire whether there is a breach of warranty or negligence of the part of the insured. The exact amount of loss payable by the insurer. The presence of the average clause in the policy will determine the amount of loss payable.
On receipt of the claim form duly completed and the survey report, the claim is processed and, if it is in order, a discharge voucher is to be signed by the insured. The amount of loss payable by the insurer is usually settled by agreement between the insurer and the insured otherwise the matter has to be referred to arbitration. Market value of the damaged property is usually taken into account while calculating the amount of loss. Sometimes, the cost of replacement is considered for the purpose. But, it is prevalent only in advanced countries because the insurers have well-equipped staff of replacement. 3.01: Introduction Energy plus CNG Filling Station, a filling station situated in Anadapur, Savar, Dhaka is a filling station which has almost all kinds of technical facilities that a modern CNG filling station requires. It is running its business since 2004. It is located 30 kilometers away from Dhaka by the highway near Aminbazar. It has 5000 square meters of space in total. It has its own CNG reserve plant which can reserve 5 lac cubic feet of compressed natural gas (CNG) and it is needed to mention that its size is unusually huge. As CNG is extremely flammable object, it is a must for Energy Plus CNG Filling Station to take insurance policy against various risks regarding fire and other risks. Besides, IFIC Bank, Dilkusha branch, Dhaka which is the loan provider for the Energy Plus CNG Filling Station made it mandatory to take insurance policy when they gave the loan to Energy Plus CNG Filling Station. 3.02: Properties of Energy Plus CNG Filling Station Energy plus CNG Filling Station has a combination four major properties worth Tk. 2, 32, 65,000 which includes building, premises and decoration, CNG reserve plant and MIW dispensing machine. Separately their values are: Assets or Subject matter of insurance
Taka
Building
80,00,000
Premises and decoration
12,65,000
CNG reserve plant MIW dispensing machine
1,00,00,000 (2 units)
40,00,000 Total
2,32,65,000
3.03: Risks faced by Energy Plus CNG Filling Station Since Energy Plus CNG Filling Station deals with CNG, which is extremely flammable by nature, its major peril is fire. Besides, it has some other perils like earthquake, flood and malicious damages caused by political strike and other chaos. They needed to insure
these risks so they searched such a company that will insure their risk. Then they found Provati Insurance Company Limited. 3.04: Policy for Energy Plus CNG Filling Station Energy Plus CNG Filling Station approached to Provati Insurance Company Limited for an insurance policy that will cover the risks that they face. The underwriters of Provati Insurance Company Limited found that insuring Energy Plus CNG Filling Station will be profitable for them. So they showed interest about Energy Plus CNG Filling Station. And then they made up a blanket policy for that company which insures fire, malicious damage, earthquake and flood. The duration of the policy will be valid for 1 year, from 31st July, 2007 to 31st July, 2008.
3.05 :: Premium Rate Determination for Energy Plus CNG Filling Station The underwriters of Provati Insurance Company Limited started working on Energy Plus CNG Filling Station to determine the premium rate that the company should charge for the policy from Energy Plus CNG Filling Station. Premium for Fire Risk: First the underwriters evaluated the fire risk of Energy Plus CNG Filling Station. The underwriters found that Energy Plus CNG Filling Station is at high fire risk. As the company’s product is CNG, which is extremely flammable. So they decided to charge a high premium for fire risk. But there were some precautions that Energy Plus CNG Filling Station had taken for safety of them. These precautions are: • The CNG plant is inspected every week to check if there is any problem. • They had adequate number of fire extinguisher in their premises. • Smoking was totally prohibited near the filling station. • Wiring system of the station was safe. • The staffs of the station were trained about fire accident. Considering these precautions, Provati Insurance Company Limited determined premium for fire risk at 0.79%. Premium for Malicious Damage, Earthquake and Flood: Energy plus CNG Filling Station is at high risk of malicious damage as because political strikes and other chaos are happening every now and then. So the premium of malicious damage was determined at 20% of the fire premium. In addition, there is existence of risk of earthquake and flood. So the premium for earthquake was 0.4% and 0.3% for flood. Here one point to be noted that government of Bangladesh has set 0.1% discount on Earthquake and flood premium, so ultimately the premium for earthquake is 0.3% and for flood is 0.2%. In brief the premium rate was: Risk Fire Malicious Damage Earthquake
Percentage of Premium 0.79% 20% of the fire premium 0.3%
Flood
3.06: Premium Calculation The underwriters of Provati Limited decided to calculate aggregately for all assets i.e. worth Tk. 2,32,65,000 rather separately for Building, CNG reserve plant, MIW the premiums calculation
Premium Rate Premium for fire @ 0.79% Premium for malicious damage @ 20% fire premium Earthquake @ 0.3% Flood @ 0.2% Gross Premium Add: VAT @ 15% Total Premium for 1 year (31/07/2007-31/07/2008)
0.2%
Insurance Company the premium of the policy subject matter of insurance than calculating it Premises and decoration, dispensing machine. So, was as follows:
Premium in Taka 183,794 36,759 69,795 46,530 3,36,878 50,531 3,87,409
Energy Plus CNG Filling Station paid the whole amount of premium, Tk. 3,87,409 on 31st July, 2007 to Provati Insurance Company Limited for 1 year insurance policy. 3.07: Damage of Insured Subject Matter On 17th April 2008 at 4 pm one unit of the MIW fuel dispensing machines was severely damaged due to an explosion of CNG cylinder of a truck which was refueling from that particular machine. That machine was worth Tk. 20,00,000. 3.08: Claiming Compensation for Damage by Energy Plus CNG Filling Station Immediately after the occurrence of the damage, Energy Plus CNG Filling Station informed Provati Insurance Company Limited about the explosion through telephone. Provati Insurance Company Limited then asked them to place an application at the next day. On 18th April, 2008 Energy Plus CNG Filling Station formally placed an application on the application form provided by Provati Insurance Company Limited. The application contained following information: 1. Name of insured: Energy Plus CNG Filling Station 2. Insurance contract number: PI/458/FR564 3. Duration of the insurance: From 31/07/2007 to 31/07/2008 4. Time of damage: 17th April, 2008 at 4pm 5. Types of risks covered: Fire, Malicious damage, Earthquake, Flood 6. Name of damaged asset: MIW dispensing machine 7. Location of the damaged asset(s): Energy Plus CNG Filling Station premises 8. Was the damaged asset was covered: Yes 9. Was there any additional risk to the asset: No
10. Were all the conditions of insurance contract obeyed: Yes According to the claim application of Energy Plus CNG Filling Station, the description was: Description Value of the insured asset
Taka 2,32,65,000
Value of the damaged asset
20,00,000
Value of rescued asset
10,00,000
Repair expense
10,00,000
After placing all these information, the manager of the filling station attested all the information and claimed Tk. 10,00,000 for the compensation of the damage. 3.0:Assigning Surveyor by PICL When Provati Insurance Company Limited received formal application from insured about the claim, he assigned a government certified surveyor named Modhumoti Surveyors. And sent a letter to Energy Plus CNG Filling Station informing them about the assigning of surveyor and requested them to coordinate with the surveyor. On that same letter Provati Insurance Company Limited also asked Energy Plus CNG Filling Station for some required documents. These are: 1. Copy of F.I.R duly authenticated by the concerned Police Station. 2. Police investigation report in original or a copy duly certified by the concerned Police Station. 3. Fire Brigade Report in original. 4. Copy of contract papers. 5. Manager’s statement about the occurrence of damage. 6. List of damage. 7. Quotation of repair cost of the damaged asset(s) from the repairers. 8. Paper of import, if applicable. 9. Policy papers of insurance contract with other insurance company. The insurance company also asked the insured to provide the same document to the surveyors if they require them. 3.10: Survey Report from Modhumoti Surveyors Modhumoti Surveyors surveyed the spot of damage by their expert surveyor team. It took three days to survey the damage. The surveyors found the following information from their survey: Description Value of the insured asset Value of the damaged asset
Taka 2,32,65,000 20,00,000
Value of rescued asset Repair expense
14,00,000 6,00,000
Here point to be noted that, according to the information given by Energy Plus CNG Filling Station in their claim application the value of rescued asset was Tk. 10,00,000 only and Repair expense was Tk. 10,00,000. But surveyors report says that the value of rescued asset was Tk. 14,00,000 and Repair expense was Tk. 6,00,000. Modhumoti Surveyors reported another important thing i.e. the particular assets were also insured by another insurance company named People’s Insurance Company Limited. 3.11: Compensation by PICL Finally Provati Insurance Company Limited took the decision to compensate Energy Plus CNG Filling Station for their loss. Their repair expense was Tk. 6, 00,000 according to survey report. But as the surveyors reported that those properties were also insured by another insurance company named People’s Insurance Company Limited, Provati Insurance Company Limited decided to compensate the repair expense proportionately with the second insurer. So Energy Plus CNG Filling Station was compensated for Tk. 3, 00,000 by Provati Insurance Company Limited. In summary: Description Claimed repair expense
Taka 10,00,000
Actual repair expense
6,00,000
Proportionate compensation by PICL
3,00,000
3.12: Conclusion The purpose of this study was to show the implication of insurance company’s procedures in real life. So we have selected Provati Insurance Company Limited for this task. As the study is done as a student, not a professional; it is very likely that there are a various faults in every stage of this study, in analysis & interpretation of data, which needs to be detected. So the findings of the study should not be relied upon to take major managerial decision unless further test is conducted. With the development of business and industries in the country necessity of insurance is being felt immensely. In the face of stiff competition in the industry Provati Insurance Company has been rendering better quality and specialized services to its clientele through a big network of branches spread all over the country and with the help of a team of highly qualified and experienced professionals headed by a Managing Director having vast expertise and experience in the field of Insurance, Re-Insurance and Financial Management to his credit. They maintain stringently ethical standard in business operation. Their attention is always focused on the individual client and his special needs. It has set its motto to serve the clients with utmost trust. They ensure benefit to the policyholders, shareholders and society at large. They have taken necessary steps to face the challenges considering the competition in business market. They have settled their strategies.
Over the years, it has positioned itself as a one of the leading insurance company. It is expected that if Provati Insurance Company Limited maintain properly all the rules and regulation imposed by the government they can create a congenial atmosphere in insurance business.