Insurance is not a new business in Bangladesh.

Almost a century back,

during British rule in India, some insurance companies started transacting
business, both life and general, in Bengal. Insurance business gained
momentum in East Pakistan during 1947-1971, when 49 insurance
companies transacted both life and general insurance schemes.
The government of Bangladesh nationalized insurance industry in 1972
by the Bangladesh Insurance (Nationalization) Order 1972. Through an
ordinance passed in 1984 amending the Insurance Act 1938 and the rules
under the Insurance Corporations Act 1973, the initial entrants into the
market, including Pragati Insurance Limited (PIL), by the way of their
.professional approach were instrumental in bringing a change and gave the
insurance sector a decent shape and structure. However when subsequent
insurance companies entered into the market, the insurance sector found
itself saturated which caused unethical practices and relentless competition.

Asha Insurance Company

PREVIOUS MISSION STATEMENT
It is the goal of the Company to provide clients with the highest quality
title insurance available to people within its target market.

The previous mission statement is too

generalized.
NEW MISSION STATEMENT
Asha's mission is to create shareholders value through customers
satisfaction and employees commitment to excellence.

ASHA is dedicated to providing insurance products that provide

quality protection with value pricing.
Success will be measured by our clients choosing us because of
their belief in our ability to meet or exceed their expectations of
price, service, and expertise.
Previous vision
Our vision is to be customers first choice when selecting insurance products
and services offered by the industry and to operated by code of conduct
driven by a value system that promotes performance, integrity and personal
growth in all dealings with stakeholders and to maintain our leading edge in
the industry by striving to enhance financial strength and profitability

New vision

We are a reknown financial services firm comprised of a

team of dynamic leaders, financial professionals and
representatives focused on client advocacy and dedicated
to outstanding service to our clients.
Integrity - In all aspects of our professional
and personal lives
Leadership - Locally recognized leader in financial
products, services and solutions
Citizenship - Loyally serving our community,
clients, families and associates
Respect - Maintaining open communication and
valuing the opinions of others
Excellence - Commitment to the highest standards
Professionalism - Exhibiting the highest levels of
ethics, accountability and reliability in all our endeavors

Objectives
1. To re-establish Asha Insurance Inc. as the market leader
in quality and value-priced insurance products in Dhaka at first
and then throughout the Bangladesh.
2. Establish good working relationships with our present
insurance markets by meeting with their decision makers and
plotting a mutual plan for success. Get commitments for support
and products that we can market in our trading area starting
January 2015.
3. Investigating new markets that meet our marketing
criteria by a) committing to small rural brokerage; b) providing
products suitable to our economic and social climate; and c) plans
for the upload and download of insurance policies.
4. Provide sales incentives to staff to meet sales goals of
10%.

Company Summary
Asha Insurance primarily markets and services Personal Lines
Insurance. Its customers are mostly rural, lower income families
or long time resident senior citizens who demand value priced
insurance premiums in keeping with their lower and fixed
incomes. It is a SINGLE BUSINESS UNIT of the sole proprietor Mr.
Asif 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 & Services

Asha Insurance Limited provides a wide array of general insurance services

such as the followings:
Fire Insurance

Fire & Allied Perils Insurance

Motor Insurance

Comprehensive Insurance

Act Liability Insurance

Health & Accident Insurance

Overseas Mediclaim Insurance

Personal Accident Insurance

Peoples Personal Accident Insurance

Health Care & Hospitalization Insurance

Marine Insurance

Marine Cargo Insurance

Marine Hull Insurance

All Risk Insurance

Insurance All Risk Insurance

Erection All Risk Insurance

Hotel All Risk Insurance

Machinery Breakdown Insurance

Electronic Equipment Insurance

Boiler & Pressure Vessels Insurance

Power Plant Insurance

Deterioration of Stock Insurance

Contractors All Risk Insurance

Aviation Insurance

General Aviation Insurance


Airline Insurance

Air Travel Insurance

Miscellaneous Insurance

Fidelity Guarantee Insurance

Public Liability Insurance

Products Liability Insurance

Burglary & Housebreaking Insurance

Cash-in-Counter Insurance

Cash-in-Safe Insurance

Cash-in-Transit Insurance

Cash-in ATM Insurance

Cash-in BPM Insurance

Safe Deposit Box (Bank Lockers) Insurance

Credit Shield Insurance

SME Insurance

Tournament Insurance

Replacement of Lost Card/Fraud Insurance

Consequential Loss Insurance

Business Interruption Insurance

Workmens Compensation Insurance

Micro Insurance

Health Insurance

Marriage Insurance

Prospects of Insurance Business in Bangladesh

As well as the problems mentioned above, there are many good
signs for the insurance business in Bangladesh. The factors that
can facilitate the insurance business in our country are discussed
below. These facts can be measured as the prospective fields for
insurance business in Bangladesh.
Increased population:
There is a big opportunity lies ahead for the insurance companies
as the population of our country are increasing day by day.
Although most of people of our country live under extreme
poverty level and want to avoid insurance policy number of
potential policy holders in Bangladesh is growing with growth of
the population. There is somewhat relationship between growing
populations with the number of public vehicle. As we know all
public vehicle must have an insurance policy. So growing
population also increase the motor insurance too. That is growth
in population opens greater scope for every kind of insurance
business that results in growing prospect for insurance
companies.

Higher GDP:
The GDP of our country is increasing than the previous years
which results in increase of per capita income. So this growing
GDP and income holds bright prospects for insurance companies.
The major problem is the incapability of our people to pay the
premium charged by the insurance companies. . With the growth
in the income more and more people are now willing to take an
insurance policy for safeguarding themselves from any danger.
New businesss individual insurance:
There are so many new businesses starting every day and
manufacturing sector is booming with global demand. Every
business is insured under an insurance company to protect its
company from any kind of accident. Therefore growing industry,
mill, factories are creating better scope for the insurance
companies to flourish their business.
Developing mass awareness about insurance:
People are now much more conscious about their safety. So they
are encouraged to take an insurance policy for making their life
free from any unexpected occurrence. Increase in literacy rate is
helping predominantly to create awareness among the people
regarding taking insurance policy. Besides these insurance
companies are also trying to eradicate the negative attitude of
people towards the insurance company by organizing various
programs such as seminars, programs including social
responsibilities etc.
Micro insurance:
Micro insurance can be a great prospective area for the insurance
business in our country. Most of the people of our country are
unable to have costly and long term insurance policies. Micro
insurance can be provided to individual personnel or to small
business owners against little insurance premiums and with easy
terms and conditions. When they will afford to minimize their risks
at a lower price, they will take that opportunity and they will
become to get used to it. This can cover a huge portion of the
society who can be a prospective target market for this business.
Health Insurance:
The insurance companies of Bangladesh can be developed health
insurance policy as large scale like other developed and
developing countries. That increases the scope of insurance

business in Bangladesh. Though there are some insurance

companies created this at small range but that not enough to
meet the crying need of health insurance in nearby decades.
Marriage Insurance:
Bangladesh is Muslim country. So marriage plays a vital role in our
social life. Now a days it become costly. Guardians of daughters
as well as sons face this problem that is why they want to
overcome this problem. This situation creates a vast opportunity
for insurance business in Bangladesh.
Scope in non-traditional sector:
Nowadays, along with traditional insurance services, they can
offer various non-traditional insurance services to their customer.
Target market of insurance company may expand and they can
offer different types of non-traditional insurance services such as,
personal accident insurance, travel insurance, burglary insurance
and pension scheme.
Scope of investment:
Insurance companies can usually make more profit from
investment activities than from their regular insurance business.
The private insurance companies are realizing this fact and
playing role in the financial market. Insurance companies are
making large investment in government bonds, ICB projects and
in private sector business. There are opportunities to enhance
profit through effective and efficient money management by
employing capable and experienced personnel. Scope of
investment expansion persists in the areas leasing, housing,
health and money market.
Service diversification:
Insurance is not just a tool of risk coverage. It is also an attractive
instrument of savings. The mixture of risk coverage with savings
gives the opportunity for innovative product designing which
means service diversification. In a dynamic insurance market one
can expect to see new products being promoted at regular
intervals. So far very little efforts have been taken to innovative
and introduce need oriented insurance services in response to
existing threats. The prospect of the insurance business in various
sectors that affect our economy can be differentiated in the
following way.
Agriculture sector:

The economy of Bangladesh is predominantly an agrarian one,

with most people engage in farming and fishing. The uncertainty
of agriculture due to crop failure caused by climate variation,
drought, cyclone, flood and pests affects farmer income as well as
government revenue. Furthermore, in the last few years
commercialization has occurred in some sections of the
agricultural sector. Increase in investment in the agricultural
sector is creating a new opportunity for insurance industry.
Various agricultural insurance services are becoming common
these days. Demand for insurance protection against crop loans,
livestock loans, fisheries loans and equipment loans are also
increasing day by day.
Business sector:
Nowadays in Bangladesh the SME plays an important role in the
economic development. But they are deprived from taking loans
from bank for large amount. If insurance business focuses this
section in Bangladesh they are able to contribute more in the
economy .Thus insurance business has a bright prospect in
business sector in a developing country like Bangladesh
Education sector:
Insurance companies can provide different types of scheme to
expand education plan insurance. In Bangladesh the higher
educational facilities is not as rich as developed countries. It is
very costly except public sectors educational institutions. So,
education sector should create vast facilities for insurance
business in future.
Development of new policy:
SBC has long been the sole reinsures in Bangladesh and private
insurance companies were statutorily compelled to place 100% of
their reinsurance business with SBC.In1990 the government
amended the relevant provisions of the insurance Act
allowing50% of all reinsurance of general insurance business to
be placed compulsorily with SBC and the rest to private
reinsurance companies. About 70% of premium income from
general insurance business in Bangladesh is retained locally and
the rest 30%goes to reinsures abroad. Permissions to private
insurance companies to act as reinsures will open up new
opportunities to them. This will initiate open competition between
the SBC and the private reinsures within the country and will

reduce the reinsurance cost and increase efficiency. This

amendment of the existing rules can be another important
policymaking that will facilitate the insurance business in
Bangladesh. The private insurance companies can argue in favors
of their capability to act as reinsures on the basis of the fact that
the total capital belonging to the government owned general
insurance companys is Tk. 550 million while the private sector
insurance companies ownTk.2500 million.
The policy holders are very much worried about the settlement of
claims. Ordinary people also consider it main constraint.
Therefore, instance companies should settle the claims as quickly
as possible to create a healthy public image. For this purpose the
claim settlement procedure can be simplified and the insurers can
provide proper written guidelines of claim settlement to the
policyholders. Finally, if the above steps can be taken, more and
more people in Bangladesh will be interested in buying insurance.

Competitive Comparison
Our company's strength lies in the quality and depth of our
products and staff. Our offices, unlike our competition, are open
six days a week. Because of our larger staff, we are able to
service our clients even when a client's broker is busy or out of
the office on inspections.
Our staff has specialists in commercial insurance that can
properly service and underwrite local business. We also have
some quality commercial markets unavailable to our competition.

Market Analysis Summary

Recent demographic studies in our area reveal a total year-round
population of approximately 13,000, which rises in the summer to
approximately 25,000. We have a relatively high number of
seniors and many younger, newly-formed families dependent on
government assistance living mostly in a rural, unserviced, thinly
populated area. This makes it costly to service our clients. Long
distance phone bills represent our second largest expense (our
two offices each have their own toll free phone numbers) and the
cost of visiting our insureds to do home inspections is time

consuming due to the large area we service.

We are targeting seniors which have proven to be a profitable,
stable market for our brokerage in spite of our present difficult
economy.
We are fortunate that we have not yet had the intrusion to a large
degree of mass merchandising programs like "Silver Power."
Smaller brokers have made inroads into our traditional rural
business, with low cost farm markets that sell home and auto
insurance. We understand that some of these markets are in a
poor financial position and may cease to be a factor in the future.

Market Segmentation
Our market consists of senior citizens, lower-income young
families (many of who are on social assistance) and the small,
family-run business (many of which are seasonal and based on
the tourist trade). There are a few industrial risks and those that
are located here are branches of larger industries which obtain
their insurance through large brokers in Bigtown.
Our target market is the seniors, family business, and middle
income earners in our area.
We are cautious about encouraging business from lower income
prospects since they tend to have wood heat, homes in poor
repair, and many attempt to install and repair their own
plumbing, wiring, and heating systems.

Strategy and Implementation

Summary
1. Emphasize service and ongoing support. We must avoid
selling only one policy at the lowest price for each customer and
concentration account selling which greatly enhances client
retention.
2. Build an Insurance Partnership. The customer does not
want to shop every year for a new broker. Concentrate on
building a long term relationship with our customers and make
the client and our staff appreciate the value of a long-term
relationship.
3. Focus on target markets. We must focus on personal and

business customers that we identify and select to insure, instead

of allowing potential customers to choose us, which could result
in our brokerage attracting problem clients from other brokers.

Marketing Strategy
1. Emphasize service and support.
2. Build a partnership business based on account selling.
3. Focus on senior, claims-free personal lines business and
the profitable, well-run, small family business.
4. Target small, non-franchise business that does not have
access to group insurance plans.
To develop good business strategies, perform a SWOT analysis of
your business.

Positioning Statement
Our target market is Dhaka. The ideal client is claims-free aged
between 45 - 75 who owns his own home and car and is debt
free. Has exhibited stable family patterns and is known and
respected in the community.
A similar profile should be used for commercial prospects with
emphasis placed on the well-run, profitable business that has
exhibited good claims experience.

Sales Strategy
We want to emphasize the benefit of dealing with professionals
who live and work in our client's area. We know their needs and
their problems and we have a local reputation to protect, unlike
an out-of-town market. If the out-of-town broker fails to provide
proper cover or advice, they lose one client. We could stand to
lose many if the public perceives a professional failure on our
part.
Competitive prices for our identified target markets. Discounts of
up to 25% for claims-free seniors who renew their home

insurance with us.

Careful inspection and the judicious use of deductibles and
warranties for insureds using wood stoves should help alleviate
company concerns about solid fuel heating devices. Competitive
pricing is not an important factor to attract business because
competition is very limited for primary wood heat houses in our
area. This may provide a chance to pick up all of the insured's
business because, in many instances, they contact us after being
told by their previous broker that, in spite of their claims-free
status, the broker doesn't want their house insurance.
Business partners provide us the opportunity to sell lower-priced,
basic insurance coverage to our client. Many clients have
expressed interest in retaining part or all of the insurance risk,
especially for burglary. They feel that if they have installed central
alarms and bars, they can take the chance of self insurance.

SITUATIONAL ANALYSIS

Present position of insurance business in Bangladesh

In Bangladesh, the Insurance business, after an early stage of
dislocation, adventure and experimentation through half a
century has now being established as a nascent industry
distributed between the public and private sectors. Insurance
business evolved in the Indian subcontinent late in nineteenth
century when several business companies started their business
and a few Christian missionaries began to operate mutual funds
to serve their own community members. From Bangladesh

perspective insurance business was not a promising sector in its

early age but it is getting its pace day by day with the growth of
overall economic condition of the country. The privatization policy
adopted in the 1980s paved the way for a number of insurers to
emerge in the private sector. This resulted in a substantial growth
of premium incomes, competition, improvement in services, and
introduction of newer types of business in wider fields hitherto
untapped. Up to 2000, the government has given permission to
19 general insurance companies and 10 life insurance companies
in the private sector. Insurers of the country now conduct almost
all types of general and life insurance, except crop insurance and
export credit guarantee insurance, which are available only with
the Shadharan Bima Corporation. Numerous institutions,
associations and professional groups work to promote the
development of insurance business in Bangladesh. Prominent
among them is the Bangladesh Insurance Association (formed on
25 May 1988) having 30members. It aims at promoting,
supporting and protecting the interests and welfare of the
member companies. Another example is Bangladesh insurance
academy. Surveyors and insurance agents occupy a prominent
position in the insurance market of Bangladesh. The system of
professional brokers has not yet developed in Bangladesh. A total
of 60 insurance companies are operating in Bangladesh till date.
Of these companies, 57 are private, two state-owned and one is
foreign. Insurance Directorate, under the Ministry of Commerce, is
the regulatory-body of the country's insurance sector. At present
there are 44 general insurance companies running in Bangladesh.
Many other private companies are about to commence business.

PESTEL ANALYSIS
PESTEL is an important and useful tool to analyze the
strategic situation for the organization, this tool help
organization to anticipate and understand the growth
potential by exploring the potential drivers and barriers that

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.

For the development of economic infrastructure of a developing

country like Bangladesh, there is a great role of insurance. But the
insurance business in our country is not satisfactory. Though
insurance industry has very prospect in the economy but for some
reasons its totally failed to achieve its goal. If we want to know
the reasons behind this then we should look forward the following

which are social, economic, political, legal and other reasons.

Mainly these reasons are:

Social Problems
Less Public awareness:
A vast majority of people especially in rural areas are left outside
the insurance coverage. This mainly results from the unawareness
among the people. Even a large portion of people dont have the
minimum idea of insurance. People are not aware of the benefits
from the insurance policy and a great number of people believe
that insurance business is nothing but cheating and assume that
insurance policy is quite unnecessary. This negative attitude from
the people is lessening the importance of absorbing insurance
policy in a large extent.
Centralization:
Most of the insurance companies in our country are located in
urban areas and there are few branches in rural areas. They think
that they might have better scope for performing their business
as the economic condition of the urban is better than the rural
areas. They dont think that the large number of our population
reside in rural areas and if branches are expanded in rural areas
then the business can thrive if proper motivation policy is taken to
aware the mass people of the rural areas. Thus this centralization
policy acts as an obstruction for the growth of insurance business
in our country.

Economic Problems
Weak Economy:
The development of insurance business depends to the
development of economy of deferent sectors. But in Bangladesh
there are many lacking to the development of economy. Our
export income in limited and 78%income come from cloths and
nightwear sector. So the types of economy are not suitable for
insurance business. Bangladesh is one of the poorest countries in
the world and most of the people in this country live under
extreme poverty level. All of these people fight hard to earn their
livelihood and are marginal in relation to the expenditure with the
income. It is quite impossible for them to save some money for
future need. Therefore they are quite unable to give the amount
to the insurer which is called as premium and regarded as safety

or precautionary measures against any accident. The number of

people who can bear the premium to the insurance company is
very few in regard to those mentioned above. Therefore the
overall poor economic condition is creating obstacle to flourish
the insurance business in Bangladesh.
Poor financial position of the insurance companies:
Most of the insurance companies of our country are facing
financial problems. Recently government is trying to take
initiative to close some of the insurance companies because they
are not maintaining the minimum standards. They are investing
their money in poor securities and business which is vulnerable
regarding getting back the money with profit. As a result most of
the insurance companies are suffering from loss years after years
and for poor financial condition the insurance companies are also
unable to expand their branch which is a barrier for the growth of
insurance business in Bangladesh.
Weakness in Industrial Sector:
BANGLADESH is an agricultural country; the industrial sector of
their country is poor. In our country 9.71% are industrial labor
from the total labor force. In 2004-2005 industrial productivity
was only 28.88%of the total national productivity. This focuses the
weakness of our industrial sector. So these types of weakness are
one of the main barriers of insurance business.
Higher cost of business:
Growing cost of business is another problem that insurance
companies are facing now a day. They urge that government tax,
house rent, utility, commission fee, stationeries are growing day
by day. But their businesses are not growing so fast with that rate.
Besides this the policy holders are not willing to pay too much
premium with growing cost that is hampering the strategies of
insurance companies. So they are facing difficulties in running
their business efficiently.
Problems of economic bases and effective principle:
Before independence insurance business was control by private
company. But after independence maximum insurance company
take over by the government. For that reason government
changed the company management, policy and applies new rules
and regulations which system was very tricky and uncomfortable
for the mass people.

Political problems
Political instability:
Political instability is a major problem in Bangladesh. For the
instability in politics, many disruptive situations are often created
which are bad for any businesses. The people who operate
various businesses in our country often experience various types
of inconvenience in running their business. Insurance business is
not an exception 0of this. Political instability and inconsistency of
political courses are a serious problem for the insurance business.
Lack of supervision from the government:
Lack of surveillance from government ministry encourages many
insurance companies to follow some unethical practices like make
harassment to policy holder and showing less in the financial
statement. This not only destroying the reputation of the wellknown insurance companies but also creates negative impact in
the mind of the people about insurance. Besides this government
sometimes impose some conflicting rules and regulation without
discussing with insurance companies governing body. It creates
conflict among insurance companies with government and act as
one of the main hindrances of growing insurance business.
Problem of planning and administration:
Planning and administration structure are not suitable for public
and private insurance business in Bangladesh. After the change of
the government, the whole planning and administrative measures
are changed which is the main constraint for long term plans.
Without long term planning any permanent development or
solution of existing 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.

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.
Legal Problems
Too much complexity:
To take an insurance policy there are great number of rules and
regulations which must be compelled by the insured person. And
into those rules a vast number of complexities are present there.
Therefore the people are discouraged to take insurance policy
because they think that the complexities will create extra
pressure on their mind which may hamper other jobs.

Other problems
Lack of capital:
The broadness of insurance business is helpful to survey. It needs
to establish many branches in different country. It requires lots of
capital. But lack of capital in our country creates the problem of
insurance business.
Lack of skilled staff:
There needed a lot of educated and skilled staff for insurance
business. But Insurance companies perform their activities by
recruiting marketing agent and they try to convince the people to

take a policy. Most of the cases the agents are not properly
trained and they dont know the right process to catch potential
people to make their policy holders. Therefore these field level
agents are unable to fulfill their target and act as a constraint in
the insurance business. Lack of skilled and trained staff the
insurance business in our country is not wide.
Limitations of insurance knowledge:
The scope of education about insurance is so much little in our
country. The education about insurance is very limited in syllabus
of our primary and higher education. It is a hindrance in our
insurance business.
Lack of training:
The people who are concerned with insurance business are not
trained. There are no sufficient institutions in our country to give
training to employees and entrepreneur. Spread of insurance
business in Bangladesh failed for lack of proper training by the
employees specially the field employees of insurance companies.
Still there are not enough training centers to provide proper
training regarding insurance activities for the officials of insurance
company. Though there is one insurance training center in
Bangladesh it totally failed to achieve its target in insurance field.
Insufficient service:
The insurers or companies are not able to give the proper services
to the insured people. In Bangladesh insurance company people
failed to provide better service to the mass people thats why the
people who want to take the insurance policy they loss their
interest from insurance. At same time in foreign country insurance
workers goes to customers house and offices regularly to aware
themselves and influence them to take insurance policy. In thats
case Bangladesh insurance company people are not that much
expert. So the people are not interested to involve themselves
and their properties with insurance business.
Lack of exposure:
Another main problem in the country is that the media is
unconcerned to send the right message regarding insurance to
the people. As a result a large portion of population is completely
unaware about the insurance policy. Another problem is that the
insurance company does not provide adequate information in the
companys websites which can fulfill the queries of their potential

customers and satisfy themselves to buy an insurance policy.

Absence of business ethics:
Some insurance companies create harassment on the policy
holders or sometimes on the dependents of the policy holders
when they want back their money after death or maturity. The
insurance companies show different causes in order to make
delay to return back the money at expected time. Sometimes
they are eager to pay less than the desired amount by creating
various circumstances such as they try to say that the disaster of
the subject matter of the policy is not responsible due to their
activities. Besides this some field officials also create some illegal
acts. They often try to give false information to the people for
buying a policy. And these kind of illegal acts create bad
reputation to the insurance companies and hindrance the overall
insurance business. Those who are harassed by the insurance
companies discourage other not to take an insurance policy.
Lack of information technology:
Another problem is they do not use any web address, which is
essential for a large leasing company. They can provide more
information to its client by using web site.
Delay in payments of claims:
The insurance companies in our country are not fully able to pay
the claim of insured as when claimed. That is another problem of
insurance in Bangladesh.
Traditional Method:
The modern and technological methods are not followed in
insurance business in our country. All most all insurance company
ran their business in traditional way. It is a hindrance of insurance
business. Whereas foreign companies are using modern systems
like computerized system; our local company does not want to
change themselves.
LACK OF ADVERTISEMENT:
The lacking of proper advertisement and information about life
insurance package are also important factor for poor life
insurance business.
INABILITY TO SOLVE PROBLEMS:
Many of the life insurance companies are unable to solve the
problems of the policyholders.
LACK OF RELIABILTY:

Peoples have lacking of reliability on the insurance company,

because many insurance companies do not make payment they
agree to pay in time of selling policy to the people.

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NON-LIFE INSURANCE COMPANIES

Agrani Insurance Company Ltd.
Asia Insurance Ltd.
Asia Pacific Gen Insurance Co. Ltd.
Bangladesh Co-operatives Ins. Ltd.
Bangladesh General Insurance Co. Ltd.
Bangladesh National Insurance Co.Ltd.
Central Insurance Company Ltd.
City Gen. Insurance Company Ltd.
Continental Insurance Ltd.
Crystal Insurance Company Ltd.
Desh Gen. Insurance Company Ltd.
Eastern Insurance Company Ltd.
Eastland Insurance Company Ltd.
Express Insurance Ltd.
Federal Insurance Company Ltd.
Global Insurance Ltd.
Green Delta Insurance Co. Ltd.
Islami Commercial Insurance Co. Ltd.
Islami Insurance Bangladesh Ltd.
Janata Insurance Company Ltd.
Karnaphuli Insurance Company Ltd.
Meghna Insurance Company Ltd.
Mercantile Insurance Company Ltd.
Nitol Insurance Company Ltd.
Northern Gen.Insurance Company Ltd.
Peoples Insurance Company Ltd.
Phonix Insurance Company Ltd.
Pioneer Insurance Company Ltd.
Pragati Insurance Ltd.
Pramount Insurance Company Ltd.
Prime Insurance Company Ltd.
Provati Insurance Company Ltd.
Purabi Gen Insurance Company Ltd.
Reliance Insurance Ltd.
Republic Insurance Company Ltd.

36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
LIST OF
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.

Rupali Insurance Company Ltd.

Sonar Bangla Insurance Company Ltd.
South Asia Insurance Company Ltd.
Standard Insurance Ltd.
Takaful Islami Insurance Ltd.
Dhaka Insurance Ltd.
Union Insurance Company Ltd.
United Insurance Company Ltd.
Sena Kalyan Insurance Company Ltd.
Sikder Insurance Company Ltd.
LIFE INSURANCE COMPANIES
American Life Insurance Company (Foreign Company)
Baira Life Insurance Company Ltd.
Delta Life Insurance Company Ltd.
Farest Islami Life Insurance Co. Ltd.
Golden Life Insurance Ltd.
Homeland Life Insurance Company Ltd.
Meghna Life Insurance Company Ltd.
National Life Insurance Company Ltd.
Padma Islami Life Insurance Company Ltd.
Popular Life Insurance Company Ltd.
Pragati Life Insurance Ltd.
Prime Islami Life Insurance Company Ltd.
Progressive Life Insurance Company Ltd.
Rupali Life Insurance Company Ltd.
Sandhani Life Insurance Company Ltd.
Sunflower Life Insurance Company Ltd.
Sunlife Insurance Company Ltd.
Zenith Islami Life Insurance Ltd.
Mercantile Islami Life Insurance Ltd.
NRB Global Life Insurance Company Ltd.
Guardian Life Insurance Ltd.
Chartered Life Insurance Company Ltd.
Best Life Insurance Company Ltd.
Protective Islami Life Insurance Co. Ltd.
Sonali Life Insurance Co. Ltd.
Sawdesh Life Insurance Co. Ltd.
Diamond Life Insurance Co. Ltd.
Alpha Islami Life Insurance Ltd.
Trust Islami Life Insurance Co. Ltd.
Jamuna Life Insurance Ltd.

LIST OF THE INSURANCE COMPANIES IN PUBLIC SECTOR

1.
2.

Sadharan Bima Corporation(Gen. Ins)

Jiban Bima Corporation (Life Ins.)

Strengths and Weaknesses

Strengths

Proactive approach
Senior management embraces and communicates in a proactive approach to
assessing risk within the organization.

Innovation
The management of ASHA Insurance Limited Company believes in
innovative, out of the box thinking so the employees are encouraged to
generate new ideas.Management frequently gives out difficult assignments
which require them be out of their comfort zone which flexes their tendency
to think creative.

Employee support
In the decision making process the management gives certain powers to all
level employees in order to gain employee support in terms of achieving
objectives. Employees feel a sense of belonging and it motivates them to
give best effort. It also increases their commitment to the company.

Team effort
The management believes in team effort rather than individual effort. So the
work is done more efficiently by the employees working in a team. A team
effort enables the company to reach its objectives most effectively as well as
efficiently.

Weaknesses

Vague accountability
Accountability of the management for managing risks is not clearly defined.
They should mention their accountability in the company so that employees
and clients can rely on them.

Lacking in term policy

The ASHA Insurance Limited has some lacking in their term policies which
confuses the clients.

No formal training
The management does not give the new employees any kind of formal
training. They give informal training which cannot help the employees to be
more productive.

Escalation of Commitment
ASHA has a tendency to follow one size fit all approach when it come to the
controlling function which results in an Escalation of Commitment.

CORE COMPETENCE
Our goal is to earn the confidence of our customers through disciplined
underwriting, service excellence and product innovation. Ultimately, our mission is
to provide the expertise and the options for our customers to make the best
informed decisions for their insurance needs.
Just as importantly, we ensure that all our products and services continue to meet
regulatory requirements, that our intermediaries are competent and properly
trained, and that there is transparency in our pricing and terms of cover at all
times.
For commercial lines, we focus on offering a comprehensive portfolio of services to
commercial enterprises. We cater to a broad spectrum of industries and niche
sectors, including manufacturing concerns, logistic companies, engineering firms,
traders and property owners. Besides private entities, we also count public-listed
companies as our valued clients. Small businesses are not left out either, where we
provide convenient insurance packages that are affordable and easy to manage.
Our dedicated underwriting team works closely with both intermediaries and
customers. We make it our business to understand our customers' business well
and that they are properly advised. Our underwriting ethos has been - unless we
understand the business well, we do not underwrite it. And because each team
member is a specialist in his or her chosen field, our underwriters are able to tap on
one another's knowledge and experience. We also work closely with our reinsurance
partners and other service providers like surveyors and lawyers.
For personal lines, we offer protection packages for individuals and families.
Whether it is for travel, personal accident, home, domestic maid, motor or
hospitalisation insurance needs, each plan provides comprehensive coverage and
options to choose from to best suit their needs and those of their family members.

Products are regularly enhanced to meet the changing needs of our customers,
most of which are available for purchase online.
Customised products are also developed to meet the needs of specific customer
groups under various insurance scheme arrangements.

Core Values
Customer First Always: Give first priority to customer needs. Look to build
enduring relationships with customers - internal and external. Differences
should be communicated in the spirit of relationship building.
Organization above Self: We believe that individual, team and department
actions will be driven by organization goals.
Trust: We believe that there cannot be teamwork without mutual trust.
Trust is fundamental to our business and will guide all internal and external
interactions.
High Standards: We believe that excellence can be achieved only by
setting benchmarks that challenge our full potential as an organization and
as individuals..
Spirit of Adventure: Uncertainty is our business and we believe in
continuous innovation and creativity to meet challenges head-on.
Respect for Diversity: We believe that diversity is our strength and it
needs to be nurtured. We recognize that team members have varying
backgrounds, competencies and ideas and constructive action results only
when opinions are aired and understood.
Code of Conduct: This code of conduct is based on the values of the
company. The purpose is to ensure that all employees, managers and
executives within ASHA Insurance Company Limited, will live an act in
accordance with these values and principles. The code is designed to give a
broad and clear understanding of the conduct expected from all our
employees everywhere we do business. ASHA Insurance Company Limited is
committed to conduct its business in an ethical, legal, and responsible
manner. ASHA Insurance Company Limited, therefore, has established this
Social Responsibility. Code of Conduct as an application and is committed to
ensuring that this code is respected in all its facilities, all over Bangladesh.
Recognized standards as the Universal Declaration of Human Rights (UDHR)
or the International Labor Organization (ILO) conventions were used as
references in preparing this code. The principles there below refer to these
standards.
Legal Compliance: All business activities of Green Delta Insurance
Company Limited must conform to all applicable national and international
legal requirements. ASHA Insurance Company Limited shall also comply with

applicable anti-bribery/ anti-corruption rules and regulations in all their

business activities.
Prohibition of Discrimination and Harassment: ASHA shall not engage in any
discriminatory practices. Discrimination means any distinction, exclusion or
preference limiting equality or opportunity of treatment in employment or
occupation, which may be based on color, sex, religion, political opinion, age,
national, social or ethnic origins, family obligations or any other
considerations in this matter. ASHA Insurance Company Limited also commits
to a workplace free of any kind of harassment.
Compensation & Benefits: The company ensures that no wage is lower
than the applicable legal minimum. ASHA Insurance Company Limited does
not deduct or withhold pay for disciplinary reasons or force terms and
conditions for employment. Compensation paid to employees shall comply
with all applicable wage laws, including those relating to minimum wages,
overtime hours and legally mandated benefits.
Working hours: ASHA Insurance Company Limited ensures that applicable
legal restrictions on working hours are met. The maximum allowable working
hours in a week are as denied by national law and the corresponding
standards of the International Labor Organization. Overtime is restricted
according to local legal and contractual obligations. Employees have two
days off each week, apart from exceptional circumstances and for a limited
period of time. The work organization provides for rest breaks as necessary,
in order not to affect the safety and health of the employees.
Prohibition of Forced Labor: ASHA Insurance Company Limited does not
use forced or compulsory labor, meaning all work or service which is exacted
from any person under the menace of any penalty and for which the said
person has not offered him voluntarily. Also retention of identity documents
from personnel upon commencing employment is forbidden.
Freedom of Association and Collective Bargaining: ASHA Insurance
Company Limited recognizes and respects employees freedom of
association and their right to freely choose their representatives and ensures
that employee representatives do not suffer any discrimination. The
company also recognizes employees right to collective bargaining.
Health & Safety at Work: The company ensures that the workplace and its
environment do not endanger the physical integrity or health of employees.
Action to reduce the causes of accidents and improve working conditions is
the object of ongoing programs. Training related to safety and health in their
work occupation is provided to employees. Employees must have access to
drinking water, sanitary equipment and social rooms, built and maintained in
accordance with applicable legal requirements. The workplace and
environment has to provide for emergency exits, ire protection equipment
and proper lighting. Additionally adequate protection for non-smokers has to
be provided.
Environment: Procedures and standards for waste management, handling

and disposal of chemicals and other dangerous materials, emissions and

effluent treatment shall at least meet legal requirements or exceed them.

VALUE
add pic
Example

Life insurers create value through insurance and

investment operations. There are three principle sources
of profits underwriting margin, investment result, and
fee income. The earnings profile of a company is
significantly influenced by its product mix. The products
that the industry offers today range from pure risk
protection, such as term or disability insurance, to
predominantly savings, such as unit-linked products or
deferred annuities. The drivers of profitability vary
significantly along this spectrum and depend on how risks
are allocated between the insurer and the policyholder.
For example, insurers' results for protection products rely
heavily on underwriting experience, while earnings from
savings products depend mostly on fee income and the
allocation of investment results.
More transparency and detailed profitability reporting by
product segment may help investors to better understand
and judge company performance.
Health insurance value chain

The term "value chain" encompasses the entire production process of

an industry, from the introduction and refining of raw materials to the
yield of the final product for the consumer. Each "link" in the value
chain adds value to the previous product. For health insurance, the
"raw materials" are the patients and payers, while the "final product" is
a healthy customer. The value chain includes insurers, health care
providers, pharmaceutical manufacturers and makes of medical
supplies and equipment.

Integrated Delivery Networks

Many components in the insurance value chain have joined forces to
provide patients with better care and streamlined payment processes.
For instance, health care providers, such as hospitals, join forces with
health insurance underwriters to provide patients with coverage
through health management organizations. These HMOs offer
customers comprehensive coverage with doctors, nurses and
technicians in their member hospitals and private practice offices as
part of "integrated delivery networks." However, the providers did not
see the promised profit potential in these networks and some
abandoned them.

Horizontal Consolidation
In the wake of changing economic conditions in the 1990s and early
2000s, nearly every facet of the health care value chain experienced
horizontal consolidation. Insurers, hospital systems and medical
manufacturers went through a series of mergers and acquisitions to
consolidate their market shares and stabilize their standing in the
industry. For patients and payers employed by small businesses, this
consolidation reduced competition, stabilized prices and left customers
with fewer options.
Related Reading: Results of an Effective Value Chain

Provider Networks
Individual providers can provide more value for other members of the
chain by joining into affiliations and networks. These networks give the
providers better access to business-related services, such as credit
management, advertising opportunities and training in new techniques
and equipment. Also, members of the network can benefit both
themselves and their patients through referral services. For example,
general practitioners can recommend that patients visit specialists
within the network. These referrals save time for both physicians and
patients while keeping the payer within the network.

E-Commerce
The advent of "e-commerce" in the late 1990s streamlined many of the

processes in the health insurance value chain. In years past, payers,

providers and insurers had to relay information by mailing pages and
pages of paper forms between each other. Online-capable forms
allowed each link in the value chain to send their data instantly and
record the data in a searchable database. Each party received their
information in a clear format and could easily retrieve it for later use.

Marketing 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. ASHA

must 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 insurance
market 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

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 be
solicited.
THE NEW MARKETING TAGLINE WILL BE 'JIBONER JONNO
ASHA'

Managerial Analysis
THE COMANY WILL FOLLOW THE FOLLOWING STEPS FOR MANAGERIAL SKILLS

Technical Expertise

Clarification of Goals and Objectives

Problem Solving

Imagination and Creativity

Listening for Insights

Directing and Coaching

Solving Problems as Teams

Coordinating and Cooperating

Standards of Performance
Control of Details

Details on Wilsons Managerial Skills

Technical Expertise
The management will use their educational and past work experiences to
understand and communicate key technical details of the organization. They
will also use their experiences in decision making process.
Clarification of Goals and Objectives
Top level management will draw blue prints of the tasks required to reach the
goals and objectives for the whole organization. These tasks will be then
assigned to the middle level managers whose job is to fulfill the tasks
through the employees under their control. Middle level managers will be
held accountable for most of the objectives carried out in ASHA.
Problem Solving
Employees will be able to contact the manager in terms of any issues
related to work.Management will solve each and every problem to develop
team collaboration.Thus will be making their operations smoother and
flexible and leaving no room for any lags.
Imagination and Creativity
In ASHA, carrying out daily tasks will involve a constant need to think out of
the box to suit the varied types of problems faced every day. It will be the
task of management to push employees with their out of the box thinking to
ensure productivity on a daily basis. The management will give assignments
to the employees to ensure creativity.
Listening for Insights
Management will closely observe and supervise the employees making sure
that their performance in up to the mark.
Directing and Coaching
Though there is no formal training after the selection of employees, the
management will ensures that the skill level of the employees develop as
they work along.
Solving Problems as Teams
Management of ASHA will encourage employees to bring their ideas and
helps them to generate their ideas as well.
Coordinating and Cooperating:
The day to day work in ASHA will require a lot of coordination between peers
and cooperation at all levels of the organization to ensure smooth
operations.
Standards of Performance
Management will keep pushing themselves to the extreme level to keep their
standards of performance.
Controls of Details
Management will over see the performance of the employees at a close level
to ensure work-standard and objectives.

SHORT TERM AND LONG TERM STRATEGIES

New steps to taken to overcome the problems
In our country the problems that exist in insurance business
cannot be overcome over night .It needs long term planning.
Besides making the people aware the insurance businessman
should come forward with govt. to make this business famous.
Coming from the existing problems following steps should be
taken to make this business famous.
Spread of insurance education:
To make the insurance business people should be made aware
about the helpless & necessity of insurance. For this purpose
effective steps must be taken too speared of insurance education.
Publicity & increase of awareness:
We know by proper publicity it is easy to market anything.
Insurance is one type of unsought goods. So, people are not so
much aware of it. High publicity and insurance knowledge can led
the people to make insurance policy more and more. Mass
publicity activities are very essential to overcome from
unwillingness wrong idea, doubt & unbelief of the people this
country. The people media can provide an effective help regarding
country interest.
Increase of training facilities:
To continue the insurance business effective standard training
facilities must be arranged for the manager & workers who are
employed in this business. Insurance business is very complex
and technical. To perform this business properly, obviously it
needs vast knowledge regarding its performance. To achieve vast
knowledge training has no alternative. So training is very
necessary to overcome problem in insurance.
Formulation of effective Principles:
Long term formulation of effective principles is compulsory to
continue the insurance business successfully. To run the insurance
smoothly, it is mandatory to implement the principles strictly. If
everyone follows principles and rules, achieving goal is possible.
Uphold the interest of policy holder:

Success of this type of business is depended on the trust of

insured persons. To gain the trust insurance companies should
come forward to compensate the real injured as soon as possible.
Importance to the economic development:
Insurance business is depended on the development of the
different sector of economic .So insurance business can never be
developed by retaining the weak situation of the sectors including
industry commerce transportation.
Development of management:
Like every sector insurance is affected by mismanagement in
Bangladesh. Management can play a vital role in the development
of insurance business. When there will be coming good
managerial environment in insurance then a good performance
can be done easily.
Modernization of insurance business:
Modernization of insurance business means to make the business
much more modern and suitable for new generation. New policies
can be introduced if it is familiar to other world. Everyone try to
improve the present condition and serve clients more properly.
More modern insurance business must attract the clients.
Govt. monitoring system:
The private insurance companies are not so much aware about
the govt. rules and regulations. For this reason, sometimes unreal
competition created in the market. So, proper govt. monitoring
system should be introduced.
Modernized the insurance Acts and Ordinances:
Government should amend the insurance related acts and
ordinances because this is traditional acts that create problems
for insurance business in our country. That is very necessary for
our economy.
Emphasize on other sectors development:
Insurance business development depends on the development of
other sectors. So, it is possible to develop insurance sector by
developing other sectors like, industry, mining, agriculture etc.
Now-a-days people of Bangladesh are so much aware of their
future. They try their best level to be insured themselves against
any type of hazard. It is a good sign for insurance market in
Bangladesh. Every insurance company also tries to overcome the
problems. So we can hope that if the insurance company can

overcome every problems regarding insurance marketing in

Bangladesh then the insurance marketing in Bangladesh will be
facilitated.

Reading and Analyzing Insurance Ratios.

Ratio Analysis is a form of Financial Statement Analysis that is used to obtain
a quick indication of a firm's financial performance in several key areas.
Ratios are used to measure different aspect of the organization, for example;
profitability, Underwriting ability, market risk of Insurance Company etc.
Ratio Analysis as a tool possesses several important features. The data,
which are provided by financial statements, are readily available. The
computation of ratios facilitates the comparison of firms which differ in size
and nature. Ratios can be used to compare a firm's financial performance
with industry averages. In addition, ratios can be used in a form of trend
analysis to identify areas where performance has improved or deteriorated
over time.
Values used in calculating financial ratios are taken from the balance sheet,
income statement, and statement of cash flows. These comprise the firm's
"accounting statements" or financial statements. The statements' data is
based on the accounting method and accounting standards used by the
organization. Financial ratios quantify many aspects of a business and are an
integral part of the financial statement analysis. Financial ratios are
categorized according to the financial aspect of the business which the ratio
measures.

Ratios we are using:

In the following section short description of these ratios are given:

Liquidity analysis
Current Ratio:
Current ratio is a liquidity ratio that measures a company's ability to pay
short-term obligations. The ratio is mainly used to give an idea of the
company's ability to pay back its short-term liabilities (debt and payables)
with its short-term assets (cash, inventory, receivables). The higher the
current ratio, the more capable the company is of paying its obligations.


Underwriting ratios
Loss rate Ratio: The amount of a company's net premiums that were
allocated to underwriting costs, like commissions to agents and brokers,
state and municipal taxes, salaries, benefits and other operational expenses.
This ratio is determined by dividing the underwriting expenses total by net
premiums earned. It is the measure of an insurer's business efficiency to
investor, the lower the Loss rate ratio, which indicates the company is more
efficient.
Expense Ratio: It is a measure of what it costs an investment company to
operate a mutual fund. An expense ratio is determined through an annual
calculation, where a fund's operating expenses are divided by Net premium.
The lower the ratio the company
Combined Ratio: Combined ratio is the addition of loss ratio and expense
ratio, which shows in together how an efficient insurance company is to
select the policy as well as control the underwriting expense. The lower the
ratio the better efficiency it indicates.

Profitability ratios

Return on Revenue:
It is a measure of a corporation's profitability that compares net income to
revenue. Return on revenue is calculated by dividing net operating income
by revenue. This ratio indicates on the total revenue earned what portion is
turning into profit. The higher the ratio the better it is for the company.
Return on Equity Capital (ROE)
This ratio measures how much profit the shareholders investment has
generated. A higher ROE percentage indicates that shareholders are
receiving a better return on their investment.
Return on Assets (ROA)
This ratio measures how profitable a company is relative to its total assets. A
high ROA indicates that management is effectively utilizing the companys
assets to generate profit.
Investment Yield:
It indicates how much the company is earning from investment against its
investment. Company would like earn higher income on lower amount of
investment. So, lower the ratio better investment efficiency it indicates.

Leverage ratios
Debt to Equity Ratio
It measure of a company's financial leverage calculated by dividing its total
liabilities by stockholders' equity. It indicates what proportion of equity and
debt the company is using to finance its assets. A high debt/equity ratio
generally means that a company has been aggressive in financing its growth

with debt.

Market ratios
Price Earnings Ratio:
A valuation ratio of a company's current share price compared to its pershare earnings. In general, a high P/E suggests that investors are expecting
higher earnings growth in the future compared to companies with a lower
P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's
usually more useful to compare the P/E ratios of one company to other
companies in the same industry, to the market in general or against the
company's own historical P/E.
Market Value to book value
This ratio indicates according to the record of the company what should be
value of each share. Book value of share changes as per number share
changes. If market value is greater than book value the ratio will be greater
than 1. On the other hand in opposite case, when the ratio is lower than 1, it
indicates the company reputation and shareholder expectations in the
market is not favorable.

Understanding profitability in life insurance

Life insurance companies tend to report their profits using
accounting-based quarterly reports. The statutory and
GAAP/IFRS accounting-based indicators do provide a highlevel picture of life insurers' historical performance, but
they fail to fully capture the long-term nature of life and
health insurance operations. Also, comparison across
countries and companies is hampered due to differing
rules and practices. There is limited disclosure of
performance at the product level and few insights into a
product's risk profile and its consequences for future
earnings. Also missing from accounting-based metrics is
the cost of capital required to support the business.

Together, these issues result in rather opaque profitability

figures which make it difficult for stakeholders to truly
understand and judge a companys earnings and
sustainability in the future. However, a more forwardlooking approach to measuring life insurance profitability,
though it is often used only by life insurers top
management, is available through the embedded value
framework.
Embedded value-based reporting in life insurance is
indispensable for holistic decision making.
Embedded value (EV) is a framework that seeks to
quantify future cash flows of insurance products and the
cost of capital for business lines with varying risk profiles.
While EV concepts are indispensable for internal
purposes, they have not gained acceptance everywhere
for external reporting to investors. Today, insurers face a
dilemma: in many cases top management makes
decisions based on embedded value concepts, while
investors often rely on traditional accounting-based
measures.
A growing number of companies are developing and
promoting their own performance metrics to supplement
traditional accounting-based financial reporting. But there
is a thin line between providing more valuable
information and confusing stakeholders with varying
profitability measures. A sophisticated measure, such as
the market consistent embedded value concept (MCEV)
or Swiss Re's very similar Economic Value Management
framework, may also be useful for external reporting if it
gains acceptance. In the future, insurance specific
accounting rules and new regulatory frameworks may
also help to standardise financial reporting and make
insurance profitability more accessible to all stakeholders.

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.

Reference List
Banglapedia. (n.d) Bangladesh Insurance Company .[Online] Available From
http://www.bankersbd.com/bangladesh-insurance-company.html [Accessed
15th August 2013]
Akram, Md. (2010) Rule Book: Pragati Insurance Limited
Akram, Md. (2012) Annual Report 2012: Pragati Insurance Limited
Cassidy, C.M. and Kreitner, R. (2011) Principles of Management.12th ed.
South-Western, Cengage Learning.
www.businessdictionary.com/
http://www.investorwords.com/

3.4 Bibliography
Books:
Elements of insurance by Azizul Huq Chaudhuri,

Higher Banking & Insurance by Khalekuzzaman

Principles and Practice of Insurance by M.N. Mihsra.
Website:
http://www.sbc.gov.bd
http://www.jbc.gov.bd
http://www.bankersbd.com/bangladesh-insurance-company.html
Other:
Annual Reports (2007 to 2011) Different Insurance Companies of
Bangladesh.
Thoroughly Revised Edition 2010&2011Magazines and reports.
Bangladesh General Insurance Company Ltd, Annual Report 2010.
Insurance Journal 1993 Insurance Journal 1997Banglapedia.