View with images and charts Product and Performance Evaluation of-Sandhani Life Insurance & Northern General Insurance Company Ltd. Introduction The business of insurance is gradually expanding in this country,but the corresponding knowledge to conduct and regulate the business of insurance on sound footing is not.One of the reasons could be the lack of technical knowledge which necessitates easy availability of authoritative reading materials.This is one front where we are lacking far behind. Insurance is nothing but a system of spreading the risk of one onto the shoulders of many.Whilst it becomes somewhat impossible for a man to bear by himself 100% loos to his own property or interest arising out of an unforeseen contingency,insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose. Although not in the present day from of insurance.the concept of such a philosophy of grouping together or risk sharing developed in very ancient times.We can probably go back to 4th century which witnessed the practice of BOTTOMRY BONDS and RESPONDENTIA BONDS in maritime trade.Another practice which is still in existence is known as GENERAL AVERAGE which has in itself the element of sharing the loss of one by all.It is very old custom and can be traced back to 916 B.C. during the time of Rhodians. “Sandhani Life Insurance Co.Ltd” 1. Profile ”Sandhani Life Insurance Company Ltd. Was in corporated on 1990 as a public Ltd. Company under the section on 184 of the companies Act 1994.SLIC underwrites risks in Ordinary life Insurance,Greha sanchay,Takaful, IDPS, GIDPS & ISB,DPS &GDPS and Group Insurance. Notice is hereby given that the 17 th Annual General Meeting of the Shareholders of Sandhani Life Insurance Company Ltd.was held on 19-08-2007,Sunday at 10:30 a.m at LGED Auditorium,Level-2,LGED Bhaban,Shere-Banglanagar,Agargaon,Dhaka-1207 to transact the following business: 1. To receive & adopt the Directors ‘Report & Audited Accounts for the year ended on 31 st December 2006 and the Auditors’ Report thereon. 2. To declare Dividend (Bonus Share) for the year 2006 as recommended by the Board of Directors. 3. To consider appointment of the Auditors for the year 2007 and to fix their remuneration. 4. To elect Directors.
NOTES: 1.The Register of Shareholders and the Register of Transfer of Shares of the Company will remain closed on 30-07-2007 as ‘Record Date’.On that date no share transfer will be effected. 2.A member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend the meeting and vote on his/her behalf. 3. The proxy form must be affixed with revenue stamp of tk.8.00 and should be deposited at the Registered Office of the Company not later than 48 hours before the time fixed for the meeting. 4.The Board of Directors have recommended dividend in the from of Bonus Share at the rate of 20 shares for every 100 shares held by the shareholders (20:100) on the paid up capital of tk.4,76,06,400 for the year ended December 31,2006. 5. Members are requested to notify change of address,if any,to the Company. 6. Admission to the Meeting Venue will be on production of the attendance slip with the Notice. 2. Product name with Description Type of Products: Sandhani Life Insurance Company Limited is carrying out the Following types of insurance/re-insurance business: 1. Ordinary life Insurance: What makes ordinary life insurance different from term life insurance? An ordinary life insurance policy is a combination of a term insurance policy and a “savings account.” The policy owner pays a level premium, which is usually higher in the early years, and excess amounts are used to fund the savings account (also known as the cash value). Ordinary life insurance allows the policy owner to choose one of the following options, even if the insured doesn't die. • receive some of the premium back in the form of a low-cost policy loan • surrender the policy for cash • receive a reduced life insurance benefit at death • continue the current life insurance benefit for a reduced time period Types of Ordinary Life Insurance: a) Universal life insurance. b) Variable Universal Life. c) Death Benefit at Low Cost. d) CAUTION. 2. Greha sanchay: In view of the growing share of services in the gross domestic product, the government is planning to introduce a services price index on the lines of the present wholesale and retail commodity price indices.
3. Takaful, IDPS, GIDPS & ISB: One kind of insurance in sandhani life insurance company. 4. DPS &GDPS: One kind of insurance in sandhani life insurance Company. 5. Group Insurance: Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group. Group insurance may or may not be converted to individual coverage. As group insurance gets big business for an insurance company with minimum operational expenses (under one master policy issued to an employer, union or any recognized group), it is usually less expensive than individual policies.
3. Product Performa The Product Performance is given to the below: a) Ratio Analysis: For making ratio analysis at first we need product price.but we don’t found any product price.Because we don’t know what is the price of our life & that’s why we can’t make ratio analysis. b) Pointing Financial Condition of That Company: The financial highlights and the breakups of the premium income were as follows: FINANCIAL REPORTS:
(Taka in Crore)
Premium Income
2006
2005
2004
First Year Premium: Ordinary Life
66.10 12.50
63.16 12.12
38.46 8.24
Greha sanchay Takaful, IDPS, GIDPS & ISB DPS & GDPS
8.12
8.44
24.83 20.65
25.46 17.14
Renewal Premium: Ordinary Life Greha sanchay Takaful, IDPS & ISB
68.77 22.69 11.15 20.26
DPS & GDPS Group Insurance
5.32 15.50 9.40
48.73 21.68 7.51 11.32
32.08 18.5 5.2 4.3
14.67 8.22 3.97 0.32 0.23 0.08 -------------------------------------------------= 135.19 112.12 70.62 -------------------------------------------------70.69 59.60 37.64 52.16 45.81 27.9 18.53 13.79 9.6 165.72 110.25 70.14
Total Premium Management Exp: Commissions Admin Expenses Life Fund:
c) Consider Last Five Year’s Financial Condition: Given to the below: Financial Glimpses of SLIC
Paid-up capital
FY200 2 3.00
First year premium
15.73
26.64
38.46
63.16
66.10
Renewal premium
18.77
24.56
32.08
48.73
68.77
Group Insurance premium 0.03
0.03
0.08
0.23
0.32
Gross premium
34.53
51.23
70.62
112.12
135.19
Investment income
2.04
2.81
4.15
6.03
10.93
Claims
10.12
11.36
14.85
15.90
16.24
Management Expense:
16.76
26.75
37.64
59.60
70.69
Commissions
11.65
19.75
27.95
45.81
52.16
Admin Expenses
5.11
7.00
9.69
13.79
18.53
Assets
48.05
66.83
96.68
139.04
197.95
Life Fund
30.66
46.44
70.14
110.25
165.72
Dividend/Bonus Share
12%
14%(BS) 16%(BS) 20%(BS) 20%(BS)
FY2003
FY2004
FY2005
FY2006
3.00
3.42
3.97
4.76
Report 02 (General Insurance) “Northern General Insurance Co. Ltd. 1. Profile Northern General Insurance Company Limited (NGICL) was incorporated on April 8, 1996 as a public limited company under the Companies Act,1994 and licensed under the Insurance Act,1938 in order to run all types of general insurance business other than life insurance business. It obtained certificate of commencement of business on April 8,1996 with an authorized and paid up capital of Tk.250 million and Tk.60 million respectively. It got registered with the Department of Insurance on 25th May 1996.Northern General Insurance Company has its presence in Dhaka and Chittagong division. As on 31 st December 2007, the Company has been operating its business through 22 branches along with one local office. Among the branches,17 are in Dhaka division and 5 are in Chittagong division located in different strategically important areas of the city. Important dates: Incorporation of the Company
April 8, 1996
Date of Certificate of Commencement of Business
April 8, 1996
Registration under the Department of Insurance
May 25, 1996
Northern General Insurance Company Limited is licensed under Insurance Act, 1938 in order to run all types of general insurance business other than life insurance business. Like most of the general insurance companies in the industry, NGICL underwrites risks in fire, marine, motor and miscellaneous business areas. 2. Product Name with Description Type of Products: Northern General Insurance Company Limited is carrying out the Following types of insurance/re-insurance business: 1. Fire Insurance Business: A fire at a business can devastate a business. The structure may be damaged beyond repair. Business revenues are disrupted as the business cannot remain open. In the United States in 2006 there were 1.6 million fires reported resulting in $11.3 billion in direct property loss. It is a risk that must be insured against. Most property insurance policies and business owner policies cover fire losses. Most business property insurance policies are broad form policies. These policies list a number of perils that are covered by the policy and exclude perils that are not covered. However, fire insurance can be purchased as a specific peril policy or the coverage increased by a specific endorsement. It is important for the business owner to understand what is not covered under a traditional broad form policy and ways to increase coverage. It is important to review what appropriate considerations when reducing premiums are and what not effective ways to save premiums are.
2. Marine Insurance Business: The statistical records of marine underwriting are rarely brought to the notice of the public. Unlike life and fire insurance, the business, though an important one is limited in its extent. Men engaged in every occupation insure their lives and property as a means of protection in case of death or fire; but marine policies are taken out by those only who own vessels or who export or import merchandise. 3. Motor Insurance Business: By law any vehicle used on the road or other public place must be covered by a motor insurance policy. If you, your employees or anyone else working for your business uses a vehicle for work then you should check that: • • •
all vehicles owned by your business are covered by appropriate insurance any employees' vehicles used for or in connection with business have their insurance extended to cover use for their employer's business any personal vehicle insurance that you may have covers business use
You should also make sure that the cover provided by the policy is appropriate as there are different classes of business use. For example, traveling sales people or commercial representatives are considered differently from those making only occasional business trips. If you own several vehicles you may be able to get fleet cover that might offer better terms. Your insurance broker will be able to advise you on this. You need to check the licenses of all your drivers and advise your insurers of any motoring convictions. Otherwise, you will not be insured. You will also need to tell insurers of any motor convictions that happen after insurance is in plan. 4.Miscellaneous Insurance Business: With the increase in public awareness and consequent thrust of the Insurance Industry in the areas of Health Insurance, Liability Insurance and other personal lines of insurances, the miscellaneous portfolio of Insurance is poised to be the sunrise portfolio of General Insurance business. This programme has been designed keeping in mind these developments in the market and attempts to address the need for increased awareness of the multidimensional miscellaneous portfolio. Objectives • To enhance the participants understanding of the miscellaneous portfolio • To acquaint them with various aspects of Health and Liability Insurance in context with the Current scenario • Help them explore the potential of rural insurance in line with the regulatory guidelines. • To emphasize the importance of and explore the potential of personal line of business under miscellaneous portfolio. Contents • Analysis of the miscellaneous insurance products • Health Care Management - Indian and Global Perspective • TPA’s an Effective Service Provider • Legal framework and Liability Insurance Products • Rural and Social Sector - regulations, product and marketing • Personal line products - potential and marketing, distribution channels • Scope and Coverage of New Products
• • • •
Credit Default Cover Bankers Indemnity Insurance/ Jewelers Block Covers; Stock Brokers / Insurance Brokers Indemnity Packaging & Product Development Special Contingency Covers
The Company operates its business through the Head Office at Dhaka and the branches throughout the country. As on 31st December 2007, the Company has been operating its business through 22 branches along with one local office. Among the branches, 17 are in Dhaka division and 5 are in Chittagong division.
3. Product Performance a) Ratio Analysis.Given to the below: Name 2007 of Comput Result Ratio ation Liquidity Ratios 284,362, Curren 289 1.59 t Ratio 179,150, 870 259,399, Quick 922 1.50 Ratio 172,527, 109 Times Not Applicable Interes
2006 Comput ation 274,317, 966 169,521, 198 254,059, 555 163,462, 095
Result
1.62
1.55
2005 Comput ation 252,168, 712 159,957, 443 240,163, 889 154,645, 053
Result
1.58
1.55
2004 Comput ation 261,969, 017 179,780, 107 253,443, 971 177,567, 317
Result
1.46
1.43
2003 Comput ation 254,957, 769 184,742, 743 247,762, 014 180,631, 668
Result
1.38
1.37
Name 2007 of Comput Ratio ation t Earned Ration Debt Equity Ratio Operating Ratios Accou 179,362, nts 140 Receiv able 45,234,5 Turno 91 ver Ratio Invent ory Turno ver Ratio 179,362, Asset Turno 140 ver 312,217, Ratio 282 Profitability Ratios 20,940,4 Gross 89 Margi 179,362, n Ratio 140 Operat 17,529,0 35 ing Incom 104,239, e Ratio 334 12,319,5 Net 81 Incom 104,239, e Ratio 334 Return 17,529,0 35 on Assets 305,630, Ratio 044 Return 17,529,0 35 on Equity 133,066, Ratio 412 Earnin 7,319,58 g per 1
Result
2006 Comput ation
Result
2005 Comput ation
Result
2004 Comput ation
Result
2003 Comput ation
Result
Not Applicable 189,309, 329 3.97Ti mes
51,084,5 81
183,409, 276 3.71Ti mes
33,297,7 27
165,881, 667 5.51Ti mes
24,999,6 84
134,155, 063 6.64Ti mes
28,796,9 06
4.66Ti mes
Not Applicable
0.57
11.67 % 16.82 % 11.82 %
5.74
13.17 % 12.20
189,309, 329 299,042, 806 16,706,5 19 189,309, 329 11,741,5 71 126,261, 130 9,211,76 4 126,261, 130 11741,57 1 287,313, 944 11,741,5 71 129,521, 608 5,211,76 4
0.63
8.82%
9.30%
7.30%
4.09%
9.07% 8.69
183,409, 276 275,585, 081 12,009,2 23 183,409, 276 8,288,47 4 114,601, 456 4,364,25 6 114,601, 456 8,288,47 4 280,615, 566 8,288,47 4 115,627, 638 3,164,25 6
0.67
6.55%
7.23%
3.81%
2.95%
7.17% 5.27
165,881, 667 285,646, 052 20,298,7 97 165,881, 667 15,321,3 51 101,131, 854 11,437,4 66 101,131, 854 15,321,3 51 282,068, 583 15,321,3 51 105,865, 945 10,237,4 66
0.58
12.24 % 15.15 % 11.31 %
4.43%
14.47 % 17.06
134,115, 063 278,491, 115 5,363,63 5 134,115, 063 2,725,64 6 82,907,4 94 2,725,64 6 82,907,4 94 2,725,64 6 272,220, 190 2,725,64 6 93,748,3 72 1,525,64 6
0.48
4.00%
3.29%
3.20%
1.00%
2.91% 2.54
Name of Ratio Share
2007 Comput ation 600,000
Result
2006 Comput ation 600,000
Result
2005 Comput ation 600,000
Result
2004 Comput ation 600,000
Result
2003 Comput ation 600,000
b) Pointing Financial Condition Of That Company: Given to the below: Financial structure 1. Financial Structure prior to IPO Issued, subscribed and paid up capital as on date
Tk 60,000.000 ============
2. Financial structure after IPO a) Issued, subscribed and paid up capital as on date
Tk 60,000,000
b) IPO (Initial Public Offering)
Tk 90,000,000 ---------------------Tk 150,000,000 ============
Total capital structure after IPO will be Plan of Operation and Discussion of Financial Condition Internal and external sources of cash
(As per audited accounts) 31-Dec-07 Amount in Taka Internal sources of cash Share capital 60,000,000 Reserve or contingency 31,285,771 account
31-Dec-06 Amount in Taka
31-Dec-05 Amount in Taka
60,000,000
60,000,000
18,966,190
9,754,426
Sub-total
91,285,771
78,966,190
69,754,426
External sources of cash Premium deposit Grand Total
4,969,544 96,255,315
8,448,202 87,414,392
7,181,916 76,936,342
c) Consider Last Five Year’s Financial Condition: Given to the below: i) Additional disclosure on the account for the year 2003,2004,2005,2006 and 2007: For five years: Year 2007 2006
Basic Earning 12,319,581.00 9,211,764.00
No. of Share 6,00,000 6,00,000
Rtio 20.53 15.35
Result
2005 2004 2003
4,364,256.00 11,437,466.00 2,725,646.00
6,00,000 6,00,000 6,00,000
7.27 19.06 4.54
ii)Premium Deposit Year wise break up of Deposit Premium is given below: Particulars 2007 Opening Balance 8,448,202 Add: Premium 100,760,675 Earned Total: 109,208,877
2006 7,181,916 127,527,42 6 134,709,33 2 Less: Premium 126,261,13 104,239,333 Income 0 Closing Balance 4,969,544 8,448,202
2005 47,565,558
2004 59,252,377
2003 47,107,994
74,217,814
89,445,035
95,051,878
121,783,37 2 114,601,45 6 7,181,916
148,697,41 2 101,131,85 4 47,565,558
142,159,872 82,907,495 59,252,377
iii) Disclosure on income Break-up of operating income and non-operating income as under: Particul 2007 2006 2005 2004 ars Amount % Amount % Amount % Amount Operatin 2,09,40,4 63. 1,67,06,5 61. 1,20,09,2 58. 2,02,98,7 g 89 3 19 5 23 9 97 Income Non1,21,59,3 36. 1,04,69,6 38. 83,68,83 41. 67,00,25 operatin 26 7 11 5 5 1 5 g Income Total 3,30,99,8 2,71,76,1 2,03,78,0 2,69,99,0 Income 15 30 58 52
% 75. 2
2003 Amount % 53,63,63 39. 5 2
24. 8
83,24,64 0
60. 8
1,36,88,2 75
References [1].Annual Report of Sandhani Life Insurance Company Limited, 2006. [2].Annual Report of Northern General Insurance Company Limited, 2007. [3].Azizul Haq Chaudhuri, “Risk & Insurance”, 2nd Edition, Rainbow Book Mall, Dhaka. [4].Zinnatun Nesa, “Class Lectures on Principles of Insurance”, Summer Semester 2009, Daffodil International University. [5].www.google.com [6].www.en.wikipedia.com