Asha insurance company

8/10/2019 Asha insurance company

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Insurance is not a new business in Bangladesh. Almost a century back,during British rule in India, some insurance companies started transactingbusiness, both life and general, in Bengal. Insurance business gainedmomentum in East Pakistan during 19!"19!1, when 9 insurancecompanies transacted both life and general insurance schemes.

#he go$ernment of Bangladesh nationali%ed insurance industry in 19!&by the Bangladesh Insurance '(ationali%ation) *rder 19!&. #hrough anordinance passed in 19+ amending the Insurance Act 19+ and the rulesunder the Insurance -orporations Act 19!, the initial entrants into themarket, including Pragati Insurance imited 'PI), by the way of their.professional approach were instrumental in bringing a change and ga$e theinsurance sector a decent shape and structure. /owe$er when subse0uentinsurance companies entered into the market, the insurance sector founditself saturated which caused unethical practices and relentless competition.

Asha Insurance Company

PE2I*34 5I44I*( 4#A#E5E(#It is the goal of the -ompany to pro$ide clients with the highest 0ualitytitle insurance a$ailable to people within its target market.

The previous mission statement is too

generalized.NEW MISSION STATEMENTAsha6s mission is to create shareholders $alue through customer7ssatisfaction and employee7s commitment to e8cellence.

ASA is dedicated to providing insurance products that provide!uality protection "ith value pricing.

Success "ill #e measured #y our clients choosing us #ecause o$their #elie$ in our a#ility to meet or e%ceed their e%pectations o$

price& service& and e%pertise.

'revious vision*ur $ision is to be customer7s rst choice when selecting insurance productsand ser$ices o:ered by the industry and to operated by code of conductdri$en by a $alue system that promotes performance, integrity and personalgrowth in all dealings with stakeholders and to maintain our leading edge inthe industry by stri$ing to enhance nancial strength and protability


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(ew $ision

;e are a reknown nancial ser$ices rm comprised of ateam of dynamic leaders, nancial professionals andrepresentati$es focused on client ad$ocacy and dedicatedto outstanding ser$ice to our clients.

< Integrity " In all aspects of our professionaland personal li$es

< eadership " ocally recogni%ed leader in nancialproducts, ser$ices and solutions

< -iti%enship " oyally ser$ing our community,clients, families and associates

< espect " 5aintaining open communication and$aluing the opinions of others

< E8cellence " -ommitment to the highest standards< Professionalism " E8hibiting the highest le$els of

ethics, accountability and reliability in all our endea$ors

O#(ectives). To re*esta#lish Asha Insurance Inc. as the mar+et leader

in !uality and value*priced insurance products in ,ha+a at $irstand then throughout the -angladesh.

. Esta#lish good "or+ing relationships "ith our presentinsurance mar+ets #y meeting "ith their decision ma+ers andplotting a mutual plan $or success. /et commitments $or supportand products that "e can mar+et in our trading area starting

0anuary 1)2.3. Investigating ne" mar+ets that meet our mar+etingcriteria #y a4 committing to small rural #ro+erage5 #4 providingproducts suita#le to our economic and social climate5 and c4 plans$or the upload and do"nload o$ insurance policies.

6. 'rovide sales incentives to sta$$ to meet sales goals o$)17.


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-ompany 4ummaryAsha Insurance primarily mar+ets and services 'ersonal 8inesInsurance. Its customers are mostly rural& lo"er income $amiliesor long time resident senior citizens "ho demand value pricedinsurance premiums in +eeping "ith their lo"er and $i%edincomes. It is a SIN/8E -9SINESS 9NIT o$ the sole proprietor Mr.Asi$ Mahmud.

Previously it had only Fire insurance, Motor Insurance and

Health insurance. But now there will be addition of sub

group and additional life insurances.Products = 4er$icesAsha Insurance imited pro$ides a wide array of general insurance ser$icessuch as the followings>?ire Insurance

< ?ire = Allied Perils Insurance5otor Insurance

< -omprehensi$e Insurance< Act iability Insurance

/ealth = Accident Insurance

< *$erseas 5ediclaim Insurance< Personal Accident Insurance< Peoples Personal Accident Insurance< /ealth -are = /ospitali%ation Insurance

5arine Insurance< 5arine -argo Insurance< 5arine /ull Insurance

All isk Insurance< Insurance All isk Insurance< Erection All isk Insurance< /otel All isk Insurance

< 5achinery Breakdown Insurance< Electronic E0uipment Insurance< Boiler = Pressure 2essels Insurance< Power Plant Insurance< @eterioration of 4tock Insurance< -ontractor7s All isk Insurance

A$iation Insurance< eneral A$iation Insurance


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< Airline Insurance< Air #ra$el Insurance

5iscellaneous Insurance< ?idelity uarantee Insurance< Public iability Insurance

< Products iability Insurance< Burglary = /ousebreaking Insurance< -ash"in"-ounter Insurance< -ash"in"4afe Insurance< -ash"in"#ransit Insurance< -ash"in A#5 Insurance< -ash"in BP5 Insurance< 4afe @eposit Bo8 'Bank ockers) Insurance< -redit 4hield Insurance< 45E Insurance< #ournament Insurance

< eplacement of ost -ard?raud Insurance< -onse0uential oss Insurance< Business Interruption Insurance< ;orkmen7s -ompensation Insurance< 5icro Insurance< /ealth Insurance< 5arriage Insurance

Prospects of Insurance Business in BangladeshAs well as the problems mentioned abo$e, there are many goodsigns for the insurance business in Bangladesh. #he factors that

can facilitate the insurance business in our country are discussedbelow. #hese facts can be measured as the prospecti$e elds forinsurance business in Bangladesh.Increased population>

#here is a big opportunity lies ahead for the insurance companiesas the population of our country are increasing day by day.Although most of people of our country li$e under e8tremepo$erty le$el and want to a$oid insurance policy number ofpotential policy holders in Bangladesh is growing with growth ofthe population. #here is somewhat relationship between growingpopulations with the number of public $ehicle. As we know allpublic $ehicle must ha$e an insurance policy. 4o growingpopulation also increase the motor insurance too. #hat is growthin population opens greater scope for e$ery kind of insurancebusiness that results in growing prospect for insurancecompanies.


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/igher @P>#he @P of our country is increasing than the pre$ious yearswhich results in increase of per capita income. 4o this growing@P and income holds bright prospects for insurance companies.

#he maCor problem is the incapability of our people to pay thepremium charged by the insurance companies. . ;ith the growthin the income more and more people are now willing to take aninsurance policy for safeguarding themsel$es from any danger.(ew business7s indi$idual insurance>

#here are so many new businesses starting e$ery day andmanufacturing sector is booming with global demand. E$erybusiness is insured under an insurance company to protect itscompany from any kind of accident. #herefore growing industry,mill, factories are creating better scope for the insurance

companies to Dourish their business.@e$eloping mass awareness about insurance>People are now much more conscious about their safety. 4o theyare encouraged to take an insurance policy for making their lifefree from any une8pected occurrence. Increase in literacy rate ishelping predominantly to create awareness among the peopleregarding taking insurance policy. Besides these insurancecompanies are also trying to eradicate the negati$e attitude ofpeople towards the insurance company by organi%ing $arious

programs such as seminars, programs including socialresponsibilities etc.5icro insurance>5icro insurance can be a great prospecti$e area for the insurancebusiness in our country. 5ost of the people of our country areunable to ha$e costly and long term insurance policies. 5icroinsurance can be pro$ided to indi$idual personnel or to smallbusiness owners against little insurance premiums and with easyterms and conditions. ;hen they will a:ord to minimi%e their risksat a lower price, they will take that opportunity and they willbecome to get used to it. #his can co$er a huge portion of thesociety who can be a prospecti$e target market for this business./ealth Insurance>

#he insurance companies of Bangladesh can be de$eloped healthinsurance policy as large scale like other de$eloped andde$eloping countries. #hat increases the scope of insurance


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business in Bangladesh. #hough there are some insurancecompanies created this at small range but that not enough tomeet the crying need of health insurance in nearby decades.5arriage Insurance>

Bangladesh is 5uslim country. 4o marriage plays a $ital role in oursocial life. (ow a day7s it become costly. uardians of daughtersas well as sons face this problem that is why they want too$ercome this problem. #his situation creates a $ast opportunityfor insurance business in Bangladesh.4cope in non"traditional sector>(owadays, along with traditional insurance ser$ices, they cano:er $arious non"traditional insurance ser$ices to their customer.

#arget market of insurance company may e8pand and they cano:er di:erent types of non"traditional insurance ser$ices such as,

personal accident insurance, tra$el insurance, burglary insuranceand pension scheme.4cope of in$estment>Insurance companies can usually make more prot fromin$estment acti$ities than from their regular insurance business.

#he pri$ate insurance companies are reali%ing this fact andplaying role in the nancial market. Insurance companies aremaking large in$estment in go$ernment bonds, I-B proCects andin pri$ate sector business. #here are opportunities to enhance

prot through e:ecti$e and ecient money management byemploying capable and e8perienced personnel. 4cope ofin$estment e8pansion persists in the areas leasing, housing,health and money market.4er$ice di$ersication>Insurance is not Cust a tool of risk co$erage. It is also an attracti$einstrument of sa$ings. #he mi8ture of risk co$erage with sa$ingsgi$es the opportunity for inno$ati$e product designing whichmeans ser$ice di$ersication. In a dynamic insurance market onecan e8pect to see new products being promoted at regularinter$als. 4o far $ery little e:orts ha$e been taken to inno$ati$eand introduce need oriented insurance ser$ices in response toe8isting threats. #he prospect of the insurance business in $arioussectors that a:ect our economy can be di:erentiated in thefollowing way.Agriculture sector>


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#he economy of Bangladesh is predominantly an agrarian one,with most people engage in farming and shing. #he uncertaintyof agriculture due to crop failure caused by climate $ariation,drought, cyclone, Dood and pests a:ects farmer income as well as

go$ernment re$enue. ?urthermore, in the last few yearscommerciali%ation has occurred in some sections of theagricultural sector. Increase in in$estment in the agriculturalsector is creating a new opportunity for insurance industry.2arious agricultural insurance ser$ices are becoming commonthese days. @emand for insurance protection against crop loans,li$estock loans, sheries loans and e0uipment loans are alsoincreasing day by day.Business sector>(owadays in Bangladesh the 45E plays an important role in the

economic de$elopment. But they are depri$ed from taking loansfrom bank for large amount. If insurance business focuses thissection in Bangladesh they are able to contribute more in theeconomy .#hus insurance business has a bright prospect inbusiness sector in a de$eloping country like BangladeshEducation sector>Insurance companies can pro$ide di:erent types of scheme toe8pand education plan insurance. In Bangladesh the highereducational facilities is not as rich as de$eloped countries. It is

$ery costly e8cept public sectors educational institutions. 4o,education sector should create $ast facilities for insurancebusiness in future.@e$elopment of new policy>4B- has long been the sole reinsures in Bangladesh and pri$ateinsurance companies were statutorily compelled to place 1FFG oftheir reinsurance business with 4B-.In199F the go$ernmentamended the rele$ant pro$isions of the insurance ActallowingHFG of all reinsurance of general insurance business tobe placed compulsorily with 4B- and the rest to pri$atereinsurance companies. About !FG of premium income fromgeneral insurance business in Bangladesh is retained locally andthe rest FGgoes to reinsures abroad. Permissions to pri$ateinsurance companies to act as reinsures will open up newopportunities to them. #his will initiate open competition betweenthe 4B- and the pri$ate reinsures within the country and will


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reduce the reinsurance cost and increase eciency. #hisamendment of the e8isting rules can be another importantpolicymaking that will facilitate the insurance business inBangladesh. #he pri$ate insurance companies can argue in fa$ors

of their capability to act as reinsures on the basis of the fact thatthe total capital belonging to the go$ernment owned generalinsurance company7s is #k. HHF million while the pri$ate sectorinsurance companies own#k.&HFF million.

#he policy holders are $ery much worried about the settlement ofclaims. *rdinary people also consider it main constraint.

#herefore, instance companies should settle the claims as 0uicklyas possible to create a healthy public image. ?or this purpose theclaim settlement procedure can be simplied and the insurers canpro$ide proper written guidelines of claim settlement to the

policyholders. ?inally, if the abo$e steps can be taken, more andmore people in Bangladesh will be interested in buying insurance.

Competitive ComparisonOur company:s strength lies in the !uality and depth o$ ourproducts and sta$$. Our o$$ices& unli+e our competition& are opensi% days a "ee+. -ecause o$ our larger sta$$& "e are a#le to

service our clients even "hen a client:s #ro+er is #usy or out o$the o$$ice on inspections.Our sta$$ has specialists in commercial insurance that canproperly service and under"rite local #usiness. We also havesome !uality commercial mar+ets unavaila#le to our competition.

5arket Analysis 4ummary;ecent demographic studies in our area reveal a total year*roundpopulation o$ appro%imately )3&111& "hich rises in the summer to

appro%imately 2&111. We have a relatively high num#er o$seniors and many younger& ne"ly*$ormed $amilies dependent ongovernment assistance living mostly in a rural& unserviced& thinlypopulated area. This ma+es it costly to service our clients. 8ongdistance phone #ills represent our second largest e%pense


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consuming due to the large area "e service.We are targeting seniors "hich have proven to #e a pro$ita#le&sta#le mar+et $or our #ro+erage in spite o$ our present di$$iculteconomy.

We are $ortunate that "e have not yet had the intrusion to a largedegree o$ mass merchandising programs li+e =Silver 'o"er.=Smaller #ro+ers have made inroads into our traditional rural#usiness& "ith lo" cost $arm mar+ets that sell home and autoinsurance. We understand that some o$ these mar+ets are in apoor $inancial position and may cease to #e a $actor in the $uture.

Mar+et SegmentationOur mar+et consists o$ senior citizens& lo"er*income young

$amilies ocus on target mar+ets. We must $ocus on personal and


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#usiness customers that "e identi$y and select to insure& insteado$ allo"ing potential customers to choose us& "hich could resultin our #ro+erage attracting pro#lem clients $rom other #ro+ers.

Mar+eting Strategy). Emphasize service and support.. -uild a partnership #usiness #ased on account selling.3. >ocus on senior& claims*$ree personal lines #usiness and

the pro$ita#le& "ell*run& small $amily #usiness.6. Target small& non*$ranchise #usiness that does not have

access to group insurance plans.To develop good #usiness strategies& per$orm a SWOT analysis o$

your #usiness.

'ositioning StatementOur target mar+et is ,ha+a. The ideal client is claims*$ree aged#et"een 62 * ?2 "ho o"ns his o"n home and car and is de#t$ree. as e%hi#ited sta#le $amily patterns and is +no"n andrespected in the community.

A similar pro$ile should #e used $or commercial prospects "ithemphasis placed on the "ell*run& pro$ita#le #usiness that hase%hi#ited good claims e%perience.

Sales StrategyWe "ant to emphasize the #ene$it o$ dealing "ith pro$essionals"ho live and "or+ in our client:s area. We +no" their needs andtheir pro#lems and "e have a local reputation to protect& unli+e

an out*o$*to"n mar+et. I$ the out*o$*to"n #ro+er $ails to provideproper cover or advice& they lose one client. We could stand tolose many i$ the pu#lic perceives a pro$essional $ailure on ourpart.Competitive prices $or our identi$ied target mar+ets. ,iscounts o$up to 27 $or claims*$ree seniors "ho rene" their home


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insurance "ith us.Care$ul inspection and the (udicious use o$ deducti#les and"arranties $or insureds using "ood stoves should help alleviatecompany concerns a#out solid $uel heating devices. Competitive

pricing is not an important $actor to attract #usiness #ecausecompetition is very limited $or primary "ood heat houses in ourarea. This may provide a chance to pic+ up all o$ the insured:s#usiness #ecause& in many instances& they contact us a$ter #eingtold #y their previous #ro+er that& in spite o$ their claims*$reestatus& the #ro+er doesn:t "ant their house insurance.-usiness partners provide us the opportunity to sell lo"er*pricedasic insurance coverage to our client. Many clients havee%pressed interest in retaining part or all o$ the insurance ris+&

especially $or #urglary. They $eel that i$ they have installed centralalarms and #ars& they can ta+e the chance o$ sel$ insurance.

SITUATIONAL ANALYSIS

Present position of insurance business in BangladeshIn Bangladesh, the Insurance business, after an early stage ofdislocation, ad$enture and e8perimentation through half a

century has now being established as a nascent industrydistributed between the public and pri$ate sectors. Insurancebusiness e$ol$ed in the Indian subcontinent late in nineteenthcentury when se$eral business companies started their businessand a few -hristian missionaries began to operate mutual fundsto ser$e their own community members. ?rom Bangladesh


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perspecti$e insurance business was not a promising sector in itsearly age but it is getting its pace day by day with the growth ofo$erall economic condition of the country. #he pri$ati%ation policyadopted in the 19+Fs pa$ed the way for a number of insurers to

emerge in the pri$ate sector. #his resulted in a substantial growthof premium incomes, competition, impro$ement in ser$ices, andintroduction of newer types of business in wider elds hithertountapped. 3p to &FFF, the go$ernment has gi$en permission to19 general insurance companies and 1F life insurance companiesin the pri$ate sector. Insurers of the country now conduct almostall types of general and life insurance, e8cept crop insurance ande8port credit guarantee insurance, which are a$ailable only withthe 4hadharan Bima -orporation. (umerous institutions,associations and professional groups work to promote the

de$elopment of insurance business in Bangladesh. Prominentamong them is the Bangladesh Insurance Association 'formed on&H 5ay 19++) ha$ing Fmembers. It aims at promoting,supporting and protecting the interests and welfare of themember companies. Another e8ample is Bangladesh insuranceacademy. 4ur$eyors and insurance agents occupy a prominentposition in the insurance market of Bangladesh. #he system ofprofessional brokers has not yet de$eloped in Bangladesh. A totalof F insurance companies are operating in Bangladesh till date.

*f these companies, H! are pri$ate, two state"owned and one isforeign. Insurance @irectorate, under the 5inistry of -ommerce, isthe regulatory"body of the country6s insurance sector. At presentthere are general insurance companies running in Bangladesh.5any other pri$ate companies are about to commence business.

PESTEL ANALYSIS

PESTEL is an important and useful tool to analyze thestrategic situation for the organization, this tool help

organization to anticipate and understand the growth

potential by exploring the potential drivers and barriers that


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are external in nature and can have negative or positive

impact on the organizations operations (Kotler 1998).

Hence using PESTEL support organization to set an

strategic direction. This tool has particular importance for

the organizations that are operational in more than one

country since each country has different political,

economical, social, technological, environmental and legal

influences and implications. Additionally, having an in

depth understanding of PESTEL is critical for an

organization to set its fundamental 4Pof marketing and

perhaps their extension if the organization is falling in

service industry.

By doing PESTEL analysis for Asha shall help

organization to review its marketing Ps to customize its

communications in various market from various segments

point of view since the operation of Asha is based on

several products or segments however having the nature

of business same.

?or the de$elopment of economic infrastructure of a de$elopingcountry like Bangladesh, there is a great role of insurance. But theinsurance business in our country is not satisfactory. #houghinsurance industry has $ery prospect in the economy but for somereasons it7s totally failed to achie$e its goal. If we want to knowthe reasons behind this then we should look forward the following


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which are social, economic, political, legal and other reasons.5ainly these reasons are>

4ocial Problemsess Public awareness>

A $ast maCority of people especially in rural areas are left outsidethe insurance co$erage. #his mainly results from the unawarenessamong the people. E$en a large portion of people don7t ha$e theminimum idea of insurance. People are not aware of the benetsfrom the insurance policy and a great number of people belie$ethat insurance business is nothing but cheating and assume thatinsurance policy is 0uite unnecessary. #his negati$e attitude fromthe people is lessening the importance of absorbing insurancepolicy in a large e8tent.-entrali%ation>

5ost of the insurance companies in our country are located inurban areas and there are few branches in rural areas. #hey thinkthat they might ha$e better scope for performing their businessas the economic condition of the urban is better than the ruralareas. #hey don7t think that the large number of our populationreside in rural areas and if branches are e8panded in rural areasthen the business can thri$e if proper moti$ation policy is taken toaware the mass people of the rural areas. #hus this centrali%ationpolicy acts as an obstruction for the growth of insurance business

in our country.

Economic Problems;eak Economy>

#he de$elopment of insurance business depends to thede$elopment of economy of deferent sectors. But in Bangladeshthere are many lacking to the de$elopment of economy. *ure8port income in limited and !+Gincome come from cloths andnightwear sector. 4o the types of economy are not suitable for

insurance business.Bangladesh is one of the poorest countries inthe world and most of the people in this country li$e undere8treme po$erty le$el. All of these people ght hard to earn theirli$elihood and are marginal in relation to the e8penditure with theincome. It is 0uite impossible for them to sa$e some money forfuture need. #herefore they are 0uite unable to gi$e the amountto the insurer which is called as premium and regarded as safety


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or precautionary measures against any accident. #he number ofpeople who can bear the premium to the insurance company is$ery few in regard to those mentioned abo$e. #herefore theo$erall poor economic condition is creating obstacle to Dourish

the insurance business in Bangladesh.Poor nancial position of the insurance companies>5ost of the insurance companies of our country are facingnancial problems. ecently go$ernment is trying to takeinitiati$e to close some of the insurance companies because theyare not maintaining the minimum standards. #hey are in$estingtheir money in poor securities and business which is $ulnerableregarding getting back the money with prot. As a result most ofthe insurance companies are su:ering from loss years after yearsand for poor nancial condition the insurance companies are also

unable to e8pand their branch which is a barrier for the growth ofinsurance business in Bangladesh.;eakness in Industrial 4ector>BA(A@E4/ is an agricultural countryJ the industrial sector oftheir country is poor. In our country 9.!1G are industrial laborfrom the total labor force. In &FF"&FFH industrial producti$itywas only &+.++Gof the total national producti$ity. #his focuses theweakness of our industrial sector. 4o these types of weakness areone of the main barriers of insurance business.

/igher cost of business>rowing cost of business is another problem that insurancecompanies are facing now a day. #hey urge that go$ernment ta8,house rent, utility, commission fee, stationeries are growing dayby day. But their businesses are not growing so fast with that rate.Besides this the policy holders are not willing to pay too muchpremium with growing cost that is hampering the strategies ofinsurance companies. 4o they are facing diculties in runningtheir business eciently.Problems of economic bases and e:ecti$e principle>Before independence insurance business was control by pri$atecompany. But after independence ma8imum insurance companytake o$er by the go$ernment. ?or that reason go$ernmentchanged the company management, policy and applies new rulesand regulations which system was $ery tricky and uncomfortablefor the mass people.


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Political problemsPolitical instability>Political instability is a maCor problem in Bangladesh. ?or the

instability in politics, many disrupti$e situations are often createdwhich are bad for any businesses. #he people who operate$arious businesses in our country often e8perience $arious typesof incon$enience in running their business. Insurance business isnot an e8ception Fof this. Political instability and inconsistency ofpolitical courses are a serious problem for the insurance business.ack of super$ision from the go$ernment>ack of sur$eillance from go$ernment ministry encourages manyinsurance companies to follow some unethical practices like makeharassment to policy holder and showing less in the nancialstatement. #his not only destroying the reputation of the well"known insurance companies but also creates negati$e impact inthe mind of the people about insurance. Besides this go$ernmentsometimes impose some conDicting rules and regulation withoutdiscussing with insurance companies go$erning body. It createsconDict among insurance companies with go$ernment and act asone of the main hindrances of growing insurance business.Problem of planning and administration>Planning and administration structure are not suitable for public

and pri$ate insurance business in Bangladesh. After the change ofthe go$ernment, the whole planning and administrati$e measuresare changed which is the main constraint for long term plans.;ithout long term planning any permanent de$elopment orsolution of e8isting problems are impossible.

Technological Problems

The emergence and progress in internet has given

organizations an opportunity to have its operational cost

lower but information spreading cost effective and quick

due to integrated information and communications

technology.


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Consumers currently using internet as a best replacement

for yellow pages, rather more than that since they have no

opportunity to compare the offerings of different

organizations, sharing the knowledge with the community,

posting their feelings and comments on the blogs. Every

thing is just a click away from the

Internet has cut out the middle man from the business

transactions and hence helped organization in saving

huge amount of money from paying commission. This has

given organization a room to review their prices and bring

them at a lower level for the consumers.

egal Problems#oo much comple8ity>#o take an insurance policy there are great number of rules andregulations which must be compelled by the insured person. Andinto those rules a $ast number of comple8ities are present there.

#herefore the people are discouraged to take insurance policybecause they think that the comple8ities will create e8trapressure on their mind which may hamper other Cobs.

*ther problemsack of capital>

#he broadness of insurance business is helpful to sur$ey. It needsto establish many branches in di:erent country. It re0uires lots of

capital. But lack of capital in our country creates the problem ofinsurance business.ack of skilled sta:>

#here needed a lot of educated and skilled sta: for insurancebusiness. ButInsurance companies perform their acti$ities byrecruiting marketing agent and they try to con$ince the people to


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take a policy. 5ost of the cases the agents are not properlytrained and they don7t know the right process to catch potentialpeople to make their policy holders. #herefore these eld le$elagents are unable to fulll their target and act as a constraint in

the insurance business. ack of skilled and trained sta: theinsurance business in our country is not wide.imitations of insurance knowledge>

#he scope of education about insurance is so much little in ourcountry. #he education about insurance is $ery limited in syllabusof our primary and higher education. It is a hindrance in ourinsurance business.ack of training>

#he people who are concerned with insurance business are nottrained. #here are no sucient institutions in our country to gi$e

training to employees and entrepreneur.4pread of insurancebusiness in Bangladesh failed for lack of proper training by theemployees specially the eld employees of insurance companies.4till there are not enough training centers to pro$ide propertraining regarding insurance acti$ities for the ocials of insurancecompany. #hough there is one insurance training center inBangladesh it totally failed to achie$e its target in insurance eld.Insucient ser$ice>

#he insurers or companies are not able to gi$e the proper ser$ices

to the insured people. In Bangladesh insurance company peoplefailed to pro$ide better ser$ice to the mass people that7s why thepeople who want to take the insurance policy they loss theirinterest from insurance. At same time in foreign country insuranceworkers goes to customer7s house and oces regularly to awarethemsel$es and inDuence them to take insurance policy. In that7scase Bangladesh insurance company people are not that muche8pert. 4o the people are not interested to in$ol$e themsel$esand their properties with insurance business.ack of e8posure>Another main problem in the country is that the media isunconcerned to send the right message regarding insurance tothe people. As a result a large portion of population is completelyunaware about the insurance policy. Another problem is that theinsurance company does not pro$ide ade0uate information in thecompany7s websites which can fulll the 0ueries of their potential


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customers and satisfy themsel$es to buy an insurance policy.Absence of business ethics>4ome insurance companies create harassment on the policyholders or sometimes on the dependents of the policy holders

when they want back their money after death or maturity. #heinsurance companies show di:erent causes in order to makedelay to return back the money at e8pected time. 4ometimesthey are eager to pay less than the desired amount by creating$arious circumstances such as they try to say that the disaster ofthe subCect matter of the policy is not responsible due to theiracti$ities. Besides this some eld ocials also create some illegalacts. #hey often try to gi$e false information to the people forbuying a policy. And these kind of illegal acts create badreputation to the insurance companies and hindrance the o$erall

insurance business. #hose who are harassed by the insurancecompanies discourage other not to take an insurance policy.ack of information technology>Another problem is they do not use any web address, which isessential for a large leasing company. #hey can pro$ide moreinformation to its client by using web site.@elay in payments of claims>

#he insurance companies in our country are not fully able to paythe claim of insured as when claimed. #hat is another problem of

insurance in Bangladesh.#raditional 5ethod>#he modern and technological methods are not followed ininsurance business in our country. All most all insurance companyran their business in traditional way. It is a hindrance of insurancebusiness.;hereas foreign companies are using modern systemslike computeri%ed systemJ our local company does not want tochange themsel$es.A-K *? A@2E#I4E5E(#>

#he lacking of proper ad$ertisement and information about lifeinsurance package are also important factor for poor lifeinsurance business.I(ABII#L #* 4*2E P*BE54>5any of the life insurance companies are unable to sol$e theproblems of the policyholders.A-K *? EIABI#L>


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Peoples ha$e lacking of reliability on the insurance company,because many insurance companies do not make payment theyagree to pay in time of selling policy to the people.

8IST O> NON*8I>E INS9;ANCE COM'ANIES). Agrani Insurance Company 8td.

. Asia Insurance 8td.

3. Asia 'aci$ic /en Insurance Co. 8td.6. -angladesh Co*operatives Ins. 8td.

2. -angladesh /eneral Insurance Co. 8td.@. -angladesh National Insurance Co.8td.

?. Central Insurance Company 8td.. City /en. Insurance Company 8td.B. Continental Insurance 8td.

)1. Crystal Insurance Company 8td.)). ,esh /en. Insurance Company 8td.

). Eastern Insurance Company 8td.

)3. Eastland Insurance Company 8td.)6. E%press Insurance 8td.

)2. >ederal Insurance Company 8td.)@. /lo#al Insurance 8td.

)?. /reen ,elta Insurance Co. 8td.

). Islami Commercial Insurance Co. 8td.)B. Islami Insurance -angladesh 8td.

1. 0anata Insurance Company 8td.). arnaphuli Insurance Company 8td.

. Meghna Insurance Company 8td.3. Mercantile Insurance Company 8td.

6. Nitol Insurance Company 8td.

2. Northern /en.Insurance Company 8td.@. 'eoples Insurance Company 8td.

?. 'honi% Insurance Company 8td.

. 'ioneer Insurance Company 8td.B. 'ragati Insurance 8td.

31. 'ramount Insurance Company 8td.3). 'rime Insurance Company 8td.

3. 'rovati Insurance Company 8td.33. 'ura#i /en Insurance Company 8td.

36. ;eliance Insurance 8td.

32. ;epu#lic Insurance Company 8td.


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3@. ;upali Insurance Company 8td.3?. Sonar -angla Insurance Company 8td.

3. South Asia Insurance Company 8td.3B. Standard Insurance 8td.

61. Ta+a$ul Islami Insurance 8td.

6). ,ha+a Insurance 8td.6. 9nion Insurance Company 8td.

63. 9nited Insurance Company 8td.66. Sena alyan Insurance Company 8td.

62. Si+der Insurance Company 8td.

8IST O> 8I>E INS9;ANCE COM'ANIES

). American 8i$e Insurance Company oreign Company4. -aira 8i$e Insurance Company 8td.

3. ,elta 8i$e Insurance Company 8td.

6. >arest Islami 8i$e Insurance Co. 8td.2. /olden 8i$e Insurance 8td.

@. omeland 8i$e Insurance Company 8td.?. Meghna 8i$e Insurance Company 8td.

. National 8i$e Insurance Company 8td.B. 'adma Islami 8i$e Insurance Company 8td.

)1. 'opular 8i$e Insurance Company 8td.

)). 'ragati 8i$e Insurance 8td.). 'rime Islami 8i$e Insurance Company 8td.

)3. 'rogressive 8i$e Insurance Company 8td.)6. ;upali 8i$e Insurance Company 8td.

)2. Sandhani 8i$e Insurance Company 8td.)@. Sun$lo"er 8i$e Insurance Company 8td.)?. Sunli$e Insurance Company 8td.

). Denith Islami 8i$e Insurance 8td.)B. Mercantile Islami 8i$e Insurance 8td.

1. N;- /lo#al 8i$e Insurance Company 8td.

). /uardian 8i$e Insurance 8td.. Chartered 8i$e Insurance Company 8td.

3. -est 8i$e Insurance Company 8td.6. 'rotective Islami 8i$e Insurance Co. 8td.

2. Sonali 8i$e Insurance Co. 8td.@. Sa"desh 8i$e Insurance Co. 8td.?. ,iamond 8i$e Insurance Co. 8td.

. Alpha Islami 8i$e Insurance 8td.B. Trust Islami 8i$e Insurance Co. 8td.

31. 0amuna 8i$e Insurance 8td.

8IST O> TE INS9;ANCE COM'ANIES IN '9-8IC SECTO;


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). Sadharan -ima Corporation


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-*E -*5PE#E(-EOur goal is to earn the con$idence o$ our customers through disciplined

under"riting& service e%cellence and product innovation. 9ltimately& our mission isto provide the e%pertise and the options $or our customers to ma+e the #est

in$ormed decisions $or their insurance needs.

0ust as importantly& "e ensure that all our products and services continue to meet

regulatory re!uirements& that our intermediaries are competent and properly

trained& and that there is transparency in our pricing and terms o$ cover at all

times.

>or commercial lines& "e $ocus on o$$ering a comprehensive port$olio o$ services to

commercial enterprises. We cater to a #road spectrum o$ industries and nichesectors& including manu$acturing concerns& logistic companies& engineering $irms&

traders and property o"ners. -esides private entities& "e also count pu#lic*listedcompanies as our valued clients. Small #usinesses are not le$t out either& "here "e

provide convenient insurance pac+ages that are a$$orda#le and easy to manage.

Our dedicated under"riting team "or+s closely "ith #oth intermediaries and

customers. We ma+e it our #usiness to understand our customers: #usiness "elland that they are properly advised. Our under"riting ethos has #een * unless "e

understand the #usiness "ell& "e do not under"rite it. And #ecause each team

mem#er is a specialist in his or her chosen $ield& our under"riters are a#le to tap onone another:s +no"ledge and e%perience. We also "or+ closely "ith our reinsurance

partners and other service providers li+e surveyors and la"yers.

>or personal lines& "e o$$er protection pac+ages $or individuals and $amilies.

Whether it is $or travel& personal accident& home& domestic maid& motor or

hospitalisation insurance needs& each plan provides comprehensive coverage and

options to choose $rom to #est suit their needs and those o$ their $amily mem#ers.


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'roducts are regularly enhanced to meet the changing needs o$ our customers&

most o$ "hich are availa#le $or purchase online.

Customised products are also developed to meet the needs o$ speci$ic customer

groups under various insurance scheme arrangements.

-ore 2alues

-ustomer ?irst Always> i$e rst priority to customer needs. ook to buildenduring relationships with customers " internal and e8ternal. @i:erencesshould be communicated in the spirit of relationship building.

*rgani%ation abo$e 4elf> ;e belie$e that indi$idual, team and departmentactions will be dri$en by organi%ation goals.

#rust> ;e belie$e that there cannot be teamwork without mutual trust.#rust is fundamental to our business and will guide all internal and e8ternal

interactions.

/igh 4tandards> ;e belie$e that e8cellence can be achie$ed only bysetting benchmarks that challenge our full potential as an organi%ation andas indi$iduals..

4pirit of Ad$enture> 3ncertainty is our business and we belie$e incontinuous inno$ation and creati$ity to meet challenges head"on.

espect for @i$ersity> ;e belie$e that di$ersity is our strength and itneeds to be nurtured. ;e recogni%e that team members ha$e $aryingbackgrounds, competencies and ideas and constructi$e action results onlywhen opinions are aired and understood.

-ode of -onduct> #his code of conduct is based on the $alues of the

company. #he purpose is to ensure that all employees, managers ande8ecuti$es within A4/A Insurance -ompany imited, will li$e an act inaccordance with these $alues and principles. #he code is designed to gi$e abroad and clear understanding of the conduct e8pected from all ouremployees e$erywhere we do business. A4/A Insurance -ompany imited iscommitted to conduct its business in an ethical, legal, and responsiblemanner. A4/A Insurance -ompany imited, therefore, has established this4ocial esponsibility. -ode of -onduct as an application and is committed to

ensuring that this code is respected in all its facilities, all o$er Bangladesh.ecogni%ed standards as the 3ni$ersal @eclaration of /uman ights '3@/)or the International abor *rgani%ation 'I*) con$entions were used asreferences in preparing this code. #he principles there below refer to thesestandards.

egal -ompliance> All business acti$ities of reen @elta Insurance

-ompany imited must conform to all applicable national and internationallegal re0uirements. A4/A Insurance -ompany imited shall also comply with


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applicable anti"bribery anti"corruption rules and regulations in all theirbusiness acti$ities.Prohibition of @iscrimination and /arassment> A4/A shall not engage in anydiscriminatory practices. @iscrimination means any distinction, e8clusion orpreference limiting e0uality or opportunity of treatment in employment or

occupation, which may be based on color, se8, religion, political opinion, age,national, social or ethnic origins, family obligations or any otherconsiderations in this matter. A4/A Insurance -ompany imited also commitsto a workplace free of any kind of harassment.

-ompensation = Benets> #he company ensures that no wage is lower

than the applicable legal minimum. A4/A Insurance -ompany imited doesnot deduct or withhold pay for disciplinary reasons or force terms andconditions for employment. -ompensation paid to employees shall complywith all applicable wage laws, including those relating to minimum wages,o$ertime hours and legally mandated benets.

;orking hours> A4/A Insurance -ompany imited ensures that applicable

legal restrictions on working hours are met. #he ma8imum allowable workinghours in a week are as denied by national law and the correspondingstandards of the International abor *rgani%ation. *$ertime is restrictedaccording to local legal and contractual obligations. Employees ha$e twodays o: each week, apart from e8ceptional circumstances and for a limitedperiod of time. #he work organi%ation pro$ides for rest breaks as necessary,in order not to a:ect the safety and health of the employees.

Prohibition of ?orced abor> A4/A Insurance -ompany imited does notuse forced or compulsory labor, meaning all work or ser$ice which is e8actedfrom any person under the menace of any penalty and for which the said

person has not o:ered him $oluntarily. Also retention of identity documentsfrom personnel upon commencing employment is forbidden.

?reedom of Association and -ollecti$e Bargaining> A4/A Insurance

-ompany imited recogni%es and respects employees7 freedom ofassociation and their right to freely choose their representati$es and ensuresthat employee representati$es do not su:er any discrimination. #hecompany also recogni%es employees7 right to collecti$e bargaining.

/ealth = 4afety at ;ork> #he company ensures that the workplace and itsen$ironment do not endanger the physical integrity or health of employees.Action to reduce the causes of accidents and impro$e working conditions isthe obCect of ongoing programs. #raining related to safety and health in their

work occupation is pro$ided to employees. Employees must ha$e access todrinking water, sanitary e0uipment and social rooms, built and maintained inaccordance with applicable legal re0uirements. #he workplace anden$ironment has to pro$ide for emergency e8its, ire protection e0uipmentand proper lighting. Additionally ade0uate protection for non"smokers has tobe pro$ided.

En$ironment> Procedures and standards for waste management, handling


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and disposal of chemicals and other dangerous materials, emissions andeMuent treatment shall at least meet legal re0uirements or e8ceed them.

2A3Eadd picE8ample

ife insurers create $alue through insurance andin$estment operations. #here are three principle sourcesof prots N underwriting margin, in$estment result, andfee income. #he earnings prole of a company issignicantly inDuenced by its product mi8. #he productsthat the industry o:ers today range from pure risk

protection, such as term or disability insurance, topredominantly sa$ings, such as unit"linked products ordeferred annuities. #he dri$ers of protability $arysignicantly along this spectrum and depend on how risksare allocated between the insurer and the policyholder.?or e8ample, insurers6 results for protection products relyhea$ily on underwriting e8perience, while earnings fromsa$ings products depend mostly on fee income and theallocation of in$estment results.5ore transparency and detailed protability reporting byproduct segment may help in$estors to better understandand Cudge company performance./ealth insurance $alue chain


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#he term O$alue chainO encompasses the entire production process ofan industry, from the introduction and rening of raw materials to theyield of the nal product for the consumer. Each OlinkO in the $aluechain adds $alue to the pre$ious product. ?or health insurance, the

Oraw materialsO are the patients and payers, while the Onal productO isa healthy customer. #he $alue chain includes insurers, health carepro$iders, pharmaceutical manufacturers and makes of medicalsupplies and e0uipment.

Integrated @eli$ery (etworks5any components in the insurance $alue chain ha$e Coined forces topro$ide patients with better care and streamlined payment processes.?or instance, health care pro$iders, such as hospitals, Coin forces withhealth insurance underwriters to pro$ide patients with co$eragethrough health management organi%ations. #hese /5*s o:er

customers comprehensi$e co$erage with doctors, nurses andtechnicians in their member hospitals and pri$ate practice oces aspart of Ointegrated deli$ery networks.O /owe$er, the pro$iders did notsee the promised prot potential in these networks and someabandoned them.

/ori%ontal -onsolidationIn the wake of changing economic conditions in the 199Fs and early&FFFs, nearly e$ery facet of the health care $alue chain e8periencedhori%ontal consolidation. Insurers, hospital systems and medicalmanufacturers went through a series of mergers and ac0uisitions toconsolidate their market shares and stabili%e their standing in theindustry. ?or patients and payers employed by small businesses, thisconsolidation reduced competition, stabili%ed prices and left customerswith fewer options.elated eading> esults of an E:ecti$e 2alue -hain

Pro$ider (etworksIndi$idual pro$iders can pro$ide more $alue for other members of thechain by Coining into aliations and networks. #hese networks gi$e thepro$iders better access to business"related ser$ices, such as creditmanagement, ad$ertising opportunities and training in new techni0uesand e0uipment. Also, members of the network can benet boththemsel$es and their patients through referral ser$ices. ?or e8ample,general practitioners can recommend that patients $isit specialistswithin the network. #hese referrals sa$e time for both physicians andpatients while keeping the payer within the network.

E"-ommerce#he ad$ent of Oe"commerceO in the late 199Fs streamlined many of the
http://smallbusiness.chron.com/results-effective-value-chain-14385.htmlhttp://smallbusiness.chron.com/results-effective-value-chain-14385.html


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processes in the health insurance $alue chain. In years past, payers,pro$iders and insurers had to relay information by mailing pages andpages of paper forms between each other. *nline"capable formsallowed each link in the $alue chain to send their data instantly andrecord the data in a searchable database. Each party recei$ed their

information in a clear format and could easily retrie$e it for later use.

5arketing theme

Marketing Mix

ASHA Insurance's marketing mix is comprised of the following

approaches to pricing, distribution, advertising and promotion.

Pricing- The customers are especially sensitive to value. ASHAmust ensure that our price and service are perceived to be good

value to the client.

Our markets must offer several payment options to our clients that

are convenient to the client, not just to the company. Example -

payment on insured's preferred day of month, not on the

company's, and accepting payment by credit or debit card. Many

insureds are on a fixed income and receive their income on a set

day of each month or a paycheck on a particular day.

ASHA is seeing the commercial markets now moving toward basic

coverage and limiting the "bells and whistles," all-risk products

available to only those clients who have modern, well-managed,

profitable, low-risk operations. This should help stabilize pricing

and, even more important, ensure that there is an insurancemarket available for most risks. Continued insistence by the

industry on better proactive protection, i.e. fire and burglar alarms,

upgrading of buildings, etc., has started to lower loss ratios.

Distribution- This will occur both at ASHA's offices as well as on


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occasion at the insured's home.

Advertising and Promotion- ASHA will depend on a small

advertisement in the local newspaper and word of mouth. On

most of the cases, purchased word of mouth will be chosen.

ASHA must begin to investigate alternate ways to put its name in

front of the public, as for example Social services or CSR.

All advertising has to emphasize the differentiation points rather

than just price. ASHA will be developing a "Now what do I do?"

message to emphasize the need for dealing with ASHA's

insurance professionals so that in the event a loss occurs, you

know you have the proper protection.

ASHA must sell the company, not the product. In spite of some

companies' efforts to minimize the importance of the broker, the

clients still identify with the broker, not the insurance company.

ASHA Insurance must improve and increase contacts with the

clients. All clients should be contacted before renewal to ensure

covers are current and adequate. Also, new insurance should besolicited.

THE NEW MARKETING TAGLINE WILL BE 'JIBONER JONNO

ASHA'

5anagerial Analysis

#/E -*5A(L ;I ?**; #/E ?**;I( 4#EP4 ?* 5A(AEIA 4KI4< #echnical E8pertise< -larication of oals and *bCecti$es< Problem 4ol$ing< Imagination and -reati$ity< istening for Insights< @irecting and -oaching< 4ol$ing Problems as #eams


30/38

< -oordinating and -ooperating< 4tandards of Performance< -ontrol of @etails

@etails on ;ilson7s 5anagerial 4kills

#echnical E8pertise#he management will use their educational and past work e8periences tounderstand and communicate key technical details of the organi%ation. #heywill also use their e8periences in decision making process.-larication of oals and *bCecti$es#op le$el management will draw blue prints of the tasks re0uired to reach thegoals and obCecti$es for the whole organi%ation. #hese tasks will be thenassigned to the middle le$el managers whose Cob is to fulll the tasksthrough the employees under their control. 5iddle le$el managers will beheld accountable for most of the obCecti$es carried out in A4/A.Problem 4ol$ing

Employees will be able to contact the manager in terms of any issuesrelated to work.5anagement will sol$e each and e$ery problem to de$elopteam collaboration.#hus will be making their operations smoother andDe8ible and lea$ing no room for any lags.Imagination and -reati$ityIn A4/A, carrying out daily tasks will in$ol$e a constant need to think out ofthe bo8 to suit the $aried types of problems faced e$ery day. It will be thetask of management to push employees with their out of the bo8 thinking toensure producti$ity on a daily basis. #he management will gi$e assignmentsto the employees to ensure creati$ity.istening for Insights

5anagement will closely obser$e and super$ise the employees making surethat their performance in up to the mark.@irecting and -oaching#hough there is no formal training after the selection of employees, themanagement will ensures that the skill le$el of the employees de$elop asthey work along.4ol$ing Problems as #eams5anagement of A4/A will encourage employees to bring their ideas andhelps them to generate their ideas as well.-oordinating and -ooperating>#he day to day work in A4/A will re0uire a lot of coordination between peers

and cooperation at all le$els of the organi%ation to ensure smoothoperations.4tandards of Performance5anagement will keep pushing themsel$es to the e8treme le$el to keep theirstandards of performance.-ontrols of @etails5anagement will o$er see the performance of the employees at a close le$elto ensure work"standard and obCecti$es.


31/38


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4uccess of this type of business is depended on the trust ofinsured persons. #o gain the trust insurance companies shouldcome forward to compensate the real inCured as soon as possible.Importance to the economic de$elopment>

Insurance business is depended on the de$elopment of thedi:erent sector of economic .4o insurance business can ne$er bede$eloped by retaining the weak situation of the sectors includingindustry commerce transportation.@e$elopment of management>ike e$ery sector insurance is a:ected by mismanagement inBangladesh. 5anagement can play a $ital role in the de$elopmentof insurance business. ;hen there will be coming goodmanagerial en$ironment in insurance then a good performancecan be done easily.

5oderni%ation of insurance business>5oderni%ation of insurance business means to make the businessmuch more modern and suitable for new generation. (ew policiescan be introduced if it is familiar to other world. E$eryone try toimpro$e the present condition and ser$e clients more properly.5ore modern insurance business must attract the clients.o$t. monitoring system>

#he pri$ate insurance companies are not so much aware aboutthe go$t. rules and regulations. ?or this reason, sometimes unreal

competition created in the market. 4o, proper go$t. monitoringsystem should be introduced.5oderni%ed the insurance Acts and *rdinances>

o$ernment should amend the insurance related acts andordinances because this is traditional acts that create problemsfor insurance business in our country. #hat is $ery necessary forour economy.Emphasi%e on other sectors de$elopment>

Insurance business de$elopment depends on the de$elopment ofother sectors. 4o, it is possible to de$elop insurance sector byde$eloping other sectors like, industry, mining, agriculture etc.(ow"a"days people of Bangladesh are so much aware of theirfuture. #hey try their best le$el to be insured themsel$es againstany type of ha%ard. It is a good sign for insurance market inBangladesh. E$ery insurance company also tries to o$ercome theproblems. 4o we can hope that if the insurance company can


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o$ercome e$ery problems regarding insurance marketing inBangladesh then the insurance marketing in Bangladesh will befacilitated.

eading and Analy%ing Insurance atios.

atio Analysis is a form of ?inancial 4tatement Analysis that is used to obtaina 0uick indication of a rm6s nancial performance in se$eral key areas.atios are used to measure di:erent aspect of the organi%ation, for e8ampleJprotability, 3nderwriting ability, market risk of Insurance -ompany etc.atio Analysis as a tool possesses se$eral important features. #he data,which are pro$ided by nancial statements, are readily a$ailable. #hecomputation of ratios facilitates the comparison of rms which di:er in si%eand nature. atios can be used to compare a rm6s nancial performancewith industry a$erages. In addition, ratios can be used in a form of trendanalysis to identify areas where performance has impro$ed or deteriorated

o$er time.2alues used in calculating nancial ratios are taken from the balance sheet,income statement, and statement of cash Dows. #hese comprise the rm6sOaccounting statementsO or nancial statements. #he statements6 data isbased on the accounting method and accounting standards used by theorgani%ation. ?inancial ratios 0uantify many aspects of a business and are anintegral part of the nancial statement analysis. ?inancial ratios arecategori%ed according to the nancial aspect of the business which the ratiomeasures.

atios we are using>In the following section short description of these ratios are gi$en>

< i0uidity analysis-urrent atio>-urrent ratio is a li0uidity ratio that measures a company6s ability to payshort"term obligations. #he ratio is mainly used to gi$e an idea of thecompany6s ability to pay back its short"term liabilities 'debt and payables)with its short"term assets 'cash, in$entory, recei$ables). #he higher thecurrent ratio, the more capable the company is of paying its obligations.


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< 3nderwriting ratiososs rate atio> #he amount of a company6s net premiums that wereallocated to underwriting costs, like commissions to agents and brokers,state and municipal ta8es, salaries, benets and other operational e8penses.#his ratio is determined by di$iding the underwriting e8penses total by net

premiums earned. It is the measure of an insurer6s business eciency toin$estor, the lower the oss rate ratio, which indicates the company is moreecient.E8pense atio> It is a measure of what it costs an in$estment company tooperate a mutual fund. An e8pense ratio is determined through an annualcalculation, where a fund6s operating e8penses are di$ided by (et premium.#he lower the ratio the company

-ombined atio> -ombined ratio is the addition of loss ratio and e8penseratio, which shows in together how an ecient insurance company is toselect the policy as well as control the underwriting e8pense. #he lower the

ratio the better eciency it indicates.

< Protability ratios

eturn on e$enue>It is a measure of a corporation6s protability that compares net income tore$enue. eturn on re$enue is calculated by di$iding net operating incomeby re$enue. #his ratio indicates on the total re$enue earned what portion isturning into prot. #he higher the ratio the better it is for the company.eturn on E0uity -apital '*E)#his ratio measures how much prot the shareholder7s in$estment has

generated. A higher *E percentage indicates that shareholders arerecei$ing a better return on their in$estment.

eturn on Assets '*A)#his ratio measures how protable a company is relati$e to its total assets. Ahigh *A indicates that management is e:ecti$ely utili%ing the company7sassets to generate prot.

In$estment Lield>It indicates how much the company is earning from in$estment against itsin$estment. -ompany would like earn higher income on lower amount of

in$estment. 4o, lower the ratio better in$estment eciency it indicates.

< e$erage ratios@ebt to E0uity atioIt measure of a company6s nancial le$erage calculated by di$iding its totalliabilities by stockholders6 e0uity. It indicates what proportion of e0uity anddebt the company is using to nance its assets. A high debte0uity ratiogenerally means that a company has been aggressi$e in nancing its growth


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with debt.< 5arket ratios

Price Earnings atio>A $aluation ratio of a company6s current share price compared to its per"

share earnings. In general, a high PE suggests that in$estors are e8pectinghigher earnings growth in the future compared to companies with a lowerPE. /owe$er, the PE ratio doesn6t tell us the whole story by itself. It6susually more useful to compare the PE ratios of one company to othercompanies in the same industry, to the market in general or against thecompany6s own historical PE.5arket 2alue to book $alue#his ratio indicates according to the record of the company what should be$alue of each share. Book $alue of share changes as per number sharechanges. If market $alue is greater than book $alue the ratio will be greaterthan 1. *n the other hand in opposite case, when the ratio is lower than 1, it

indicates the company reputation and shareholder e8pectations in themarket is not fa$orable.

3nderstanding protability in life insuranceife insurance companies tend to report their prots usingaccounting"based 0uarterly reports. #he statutory andAAPI?4 accounting"based indicators do pro$ide a high"le$el picture of life insurers6 historical performance, butthey fail to fully capture the long"term nature of life andhealth insurance operations. Also, comparison across

countries and companies is hampered due to di:eringrules and practices. #here is limited disclosure ofperformance at the product le$el and few insights into aproduct6s risk prole and its conse0uences for futureearnings. Also missing from accounting"based metrics isthe cost of capital re0uired to support the business.


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#ogether, these issues result in rather opa0ue protabilitygures which make it dicult for stakeholders to trulyunderstand and Cudge a company7s earnings andsustainability in the future. /owe$er, a more forward"

looking approach to measuring life insurance protability,though it is often used only by life insurers7 topmanagement, is a$ailable through the embedded $alueframework.Embedded $alue"based reporting in life insurance isindispensable for holistic decision making.Embedded $alue 'E2) is a framework that seeks to0uantify future cash Dows of insurance products and the

cost of capital for business lines with $arying risk proles.;hile E2 concepts are indispensable for internalpurposes, they ha$e not gained acceptance e$erywherefor e8ternal reporting to in$estors. #oday, insurers face adilemma> in many cases top management makesdecisions based on embedded $alue concepts, whilein$estors often rely on traditional accounting"basedmeasures.

A growing number of companies are de$eloping andpromoting their own performance metrics to supplementtraditional accounting"based nancial reporting. But thereis a thin line between pro$iding more $aluableinformation and confusing stakeholders with $aryingprotability measures. A sophisticated measure, such asthe market consistent embedded $alue concept '5-E2)or 4wiss e6s $ery similar Economic 2alue 5anagement

framework, may also be useful for e8ternal reporting if itgains acceptance. In the future, insurance specicaccounting rules and new regulatory frameworks mayalso help to standardise nancial reporting and makeinsurance protability more accessible to all stakeholders.


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Customer Service- The reality of the insurance brokerage

industry is that the service is the product. Insurance is a

commodity-like purchase and it is the service of the broker that

distinguishes providers. With this important fact recognized, Acme

strives to provide the highest level of customer service.

Contingency Planning

Difficulties and Risks

Problems generating new business.

The constant need for the highest level of training and

recruitment of employees. Significant market penetration of telephone/Internet based

insurance brokers.

Worst Case Risks May Include

Growth at a rate that exceeds current revenue.

Having to liquidate equipment to cover liabilities.

Significant regulatory changes in the insurance industry.

eference istBanglapedia. 'n.d) Bangladesh Insurance -ompany .*nlineQ A$ailable ?romhttp>www.bankersbd.combangladesh"insurance"company.html Accessed1Hth August &F1QAkram, 5d. '&F1F) ule Book> Pragati Insurance imitedAkram, 5d. '&F1&) Annual eport &F1&> Pragati Insurance imited-assidy, -.5. and Kreitner, . '&F11) Principles of 5anagement.1&th ed.4outh";estern, -engage earning.

www.businessdictionary.comhttp>www.in$estorwords.com

. BibliographyBooks>RElements of insuranceS by A%i%ul /u0 -haudhuri,


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R/igher Banking = InsuranceS by Khaleku%%amanRPrinciples and Practice of InsuranceS by 5.(. 5ihsra.;ebsite>http>www.sbc.go$.bd

http>www.Cbc.go$.bdhttp>www.bankersbd.combangladesh"insurance"company.html*ther>TAnnual eports7 '&FF! to &F11) @i:erent Insurance -ompanies ofBangladesh.

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