Sei sulla pagina 1di 58

Internship Report

On
Life Insurance Activities:
A Case Study on Popular Life Insurance Company Limited

Submitted To

Supervised By

Submitted By

Date of Submission
LETTER OF SUBMISSION

Subject: Submission of Internship Report.

Dear Sir,
I have the honor to inform you that, I have completed my internship report on “Life
Insurance Activities: A Case Study on Popular Life Insurance Company Ltd.” for
the purpose of partial fulfillment for the degree of Bachelor of Business
Administration with a major in Marketing.

As your valuable suggestions and guidance, I have tried my best to prepare the report
properly. I sincerely believe that, you will find this report very significant and
informative.

I therefore, pray and hope that you would be kind enough to accept this report and
oblige thereby extends your co-operation and advice.

Sincerely Yours,
LETTER OF DECLARATION

I, hereby declare that, this internship report is not a copy of another person's report.
The study is original in nature. I have tried my best to make this report informative as
well as descriptive. I also ensure that, this report has not been submitted to any other
person earlier and will not be submitted to anybody in future.
LETTER OF ACCEPTANCE

I am enormously pleased to declare that, Saurabh Biswas, ID No: 1101010228 is a


student of Department of Business Administration, Leading University, Sylhet, has
completed Internship report on "Life Insurance Activities: A Case Study on
Popular Life Insurance Company Limited" under my direct supervision. The
outcome of the report of the internship program is an internal part of the pre-requisite
for the award of the BBA(Honors) degree- that he has performed in the Popular Life
Insurance Company Limited, Sylhet Branch, from 01 October 2014 to 01 January
2014. He has completed his research work with utmost sincerity, commitment and
dedication. He has discussed different issues and problems with me to meet the
requirement of research study and in preparing this report.

He has reviewed all the relevant information and issues of primary and secondary
sources. I rely on the honesty of Saurabh Biswas in producing the report and hence
recognize the originality of his research work presented in the report.

I wish him all success.


ACKNOWLEGEMENT
PREFACE

Report is the inseparable part of university education. It is the combination of


university education and practical knowledge. I have prepared my report on the basis
of experience and activities that I have observed and performed during the Internship
period. I have tried my level best to submit this report and overcoming the limitations.
Table of Contents
Executive Summary 01-02
Chapter 1: Introduction

Topic Page No
1.1- Background of the Study 04
1.2- Objectives of the Study 04
1.3- Methodology of the Study 04
1.4- Scope of the Study 05
1.5- Limitations of the Study 05
1.6- Problem Statement 05-09

Chapter 2: History of Insurance Industry


Topic Page No
2.1- Introduction 11
2.2- History & Development of Insurance 11-12
2.3- Development of Insurance in 12-14
Bangladesh
2.4- Implication of Five Forces Model 15-16
(By Michael E.Porter) in Insurance
Industry of Bangladesh.

Chapter 3: Company Overview

Topic Page No
3.1- Corporate Information 18-20
3.2- Objectives 20
3.3- Popular Life Insurance Company's 21
Products & Services Policies

Chapter 4: Literature Review


Topic Page No
4.1- Insurance Definition 23
4.2- Major Types of Insurance 23-24
4.3- Life Insurance Definition 25
4.4- Reason's for Buying Life Insurance 25
Policies
4.5- Advantages of Life Insurance 26
4.6- Disadvantages of Life Insurance 26
Chapter 5: Insurance Activities of Popular Life Insurance Company
Topic Page No
5.1- Ordinary Life Insurance 28-29
5.2- Micro Insurance 29-30
5.3- Premium Collection 30
5.4- Formulation Process of the Life 30-31
Insurance Contract
5.5- Risk Management 31-32
5.6- Settlement of Claim 33
5.7- Customer Service 33
5.8- Information Policy 33
5.9- Corporate Social Responsibility 33-34
5.10- Customer Satisfaction 34

Chapter 6: Analysis of Popular Life Insurance company's Activities


Topic Page No
6.1- Financial Analysis(Graphical) 36-37
6.2- Analysis of Last 5 Years Business 38
Performance
6.3- Balance Sheet 38-39
6.4- SWOT Analysis 40

Chapter 7: Findings
Topic Page No
Findings 42-43

Chapter 8: Recommendations & Conclusion

Topic Page No.


8.1- Recommendation 45-46
8.2- Conclusion 47

References 48
Appendix 49-50
EXECUTIVE SUMMARY

It is a great pleasure for me that I have completed report on "Life Insurance Activities:
A Case Study on Popular Life Insurance Company Ltd". My Internship report
contains all the information about my work experience with Popular Life Insurance
Company, which was established in September 26 th, 2000. I Shall try to discuss and
include introduction, history, objective, status, mission and financial analysis etc.

Popular Life Insurance Company Ltd. has been playing an important role in the
economic development of the country. Since the beginning, Popular Life Insurance
Ltd. set an outstanding standard to gain the popularity among all classes of people.
Popular Life started micro life insurance-cum-savings products basically went to the
poor people. Day by day the company is gaining much popularity among the
customers as it always try to maintain good relationship with its customers.

At the beginning of this report in chapter 1, I tried to give an introduction about the
background, objective, scope, methodology of this study. There are also some
problem statements included.

In chapter 2, I tried to write about the history of insurance industry and the
development of insurance industry in Bangladesh.

In chapter 3, I tried to give some brief information about the company overview of
Popular Life Insurance Company Limited and their product details.

In chapter 4, I tried to elaborate the literature review of this study including many
definitions, advantages, disadvantages of life insurance.

In chapter 5, I gave brief information on insurance activities of Popular Life Insurance


Company Limited. This includes their insurance policies, premium rates, how they
collect the premiums from customer, the process by which it formulate the insurance
policy etc.

In chapter 6, I tried to analyze the activities of Popular Life Insurance Company by


showing some graphical representation and SWOT analysis.

In chapter 7, I tried to explain the findings that I found after analyzing the activities of
this company.

In chapter 8, I tried to give some recommendations on how the company can improve
its service toward its customers and last but not the least, this includes a conclusion of
this report.

1|Page
Popular Life insurance Company is one of the leading insurance Companies in
Bangladesh. The performance of Popular life Insurance company is getting better day
by day. Its premium, assets, claims meeting, utilization of income is getting better in
last five years. The study is about the activities of Popular Life Insurance Company
limited, its cash payments, claims meeting, premium collection, service offered,
products etc. The study also showed that the factors are related with the customer
perceived risk and customer’s value.

2|Page
CHAPTER 1

INTRODUCTION

1.1- Background of the Study


1.2- Objective of the Study
1.3- Methodology of the Study
1.4- Scope of the Study
1.5- Limitations of the Study
1.6- Problem Statement

3|Page
1.1 Background of the Report
Insurance is a system of spreading the risk of one to the shoulders of many. It can be
defined as a co-operative device to spread the loss caused by a particular risk over a
number of persons who are exposed to it and who agree to ensure themselves against
that risk. It is a contract whereby the insurers, on receipt of a consideration known as
premium, agree to indemnify the insured against losses arising out of certain specified
unforeseen contingencies or perils insured against. It can play an important role in a
country’s economy. It is an old form of financial practice of sharing risk, which was
introduced in this area in mid-18th century.

1.2 Objective(s) of the Study


The main objective is to know the overall position of this sector. Some objectives of
this report are given below:

 To know an overall idea about insurance industry in Bangladesh.


 To get proper information about Popular Life Insurance Company Ltd..
 To find out the uses of insurance to society.
 To know how insurance companies involve in economic growth.
 To explore the insurance activities of Popular Life Insurance Company Ltd.

1.3 Methodology of the Study


In order to complete this report, I made the following steps:

 Selecting the goal.


 Collecting data from primary & secondary resource.

Primary data have been collected from head to head interview with some important
employees of this organization.

Secondary data have been collected from internet, different books, various journals
and annual report of this organization.

 Data Processing & Analysis.

Collected data were examined and analyzed by manipulation.

 Recommendation & Conclusion.

4|Page
1.4 Scope of the Study
By using this study, any individual would be able to have an idea about the principles
& procedures of setting up a life insurance policy, the performance of Popular Life
Insurance Company Ltd. and the impact of insurance business in our society.

1.5 Limitations of the Study


The study arranged for three months duration. Generally, this is not enough time to do
a full research on any company. But I have tried my level best, to find out the
opportunity of work, overcoming the limitation. The main limitations are as follows:

 Time constraints for the study


 Needed documents, data information are not easily available.
 The official and respective persons are very busy with their assigned job.

1.6 Problem Statement


In a developing country like Bangladesh, insurance companies are playing a very
important role in the economy. Though insurance industry has very prospect in the
economy but for some reasons it’s somehow failed to achieve its goal. If we want to
know the reasons behind this then we should look forward the following according to
Bangladesh General Insurance Company Ltd.

In this report, the major problems in performing insurance business has been
classified into some major criteria which are social, economic, political, legal and
other reasons. The actual problems are discussed in detail within these criterions.

1.6.1 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 don’t 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.

5|Page
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 don’t 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.

1.6.2 Economic Problems

Poor Economic Conditions:


Bangladesh is one of the developing 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.

Higher Cost of Business:


Growing cost of business is another problem that insurance companies are facing now
a days. 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

6|Page
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.

1.6.3 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 of
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 well known 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:


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.

7|Page
1.6.4 Legal Problems

Too Much Complexity:


To take an insurance policy there are a great number of rules and regulations which
must be compelled by the insured person. And into those rules a vast number of
complexities is 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.

1.6.5 Other problems

Lack of Qualified Officials:


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 don’t 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.

Traditional Method:
Still Bangladesh insurance company using or follows traditional methods on
insurance policy. Whereas foreign companies are using modern systems like
computerized system. Our local company does not want to change themselves.

Lack of Training for the Employees:


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 center 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.

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 company’s
websites which can fulfill the queries of their potential customers and satisfy
themselves to buy an insurance policy.

8|Page
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 Motivation Program Towards Public:


According to Green Delta Life Insurance Company the people of our country are not
much motivated by the company to take insurance policy for safeguarding themselves
against any kind of risk. Almost every time they failed to understand the people that
insurance policy makes their life risk free all time. For lack of motivation among the
mass people insurance companies are always lagging behind from their expected
target.

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.

Insufficient Service:
In Bangladesh insurance company people failed to provide better service to the mass
people that’s 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
customer’s house and offices regularly to aware themselves and influence them to
take insurance policy. In that’s case Bangladesh insurance company people are not
that much expert.

Lack of Marketing Policy:


One of the major problems in insurance companies is lack of marketing policy.
Management is not taking initiative to increase their marketing expansion. They
provide tiny amount in advertisement, which is not sufficient for increasing business
development.

9|Page
CHAPTER 2

HISTORY OF INSURANCE INDUSTRY

2.1- Introduction
2.2- History & Development of Insurance
2.3- Development of Insurance in Bangladesh
2.4- Implication of Five Forces Model (By Michael E.Porter) in Insurance
Industry of Bangladesh.

10 | P a g e
2.1 Introduction
Insurance is a system of spreading the risk of one onto the shoulders of many. Whilst
it becomes somewhat impossible for a man to bear of himself 100% loss to his own
property or interest arising out of an unforeseen contingency, insurance is a method or
process which distributes the burden of the loss on a number of persons within the
group formed for this particular purpose.

2.2 History & Development of Insurance


The origin of insurance is lost in antiquity. However, there is no evidence that
insurance in its present form was practiced prior to the twelfth century. A brief
chronological historical development of the various branches of insurance is given
below:

Marine Insurance:
Marine is the oldest form of insurance and came first in the list. This type of insurance
probably began in northern Italy sometime during the 12th & 13th century and
gradually the concept was rather transferred to or taken over by the United Kingdom.
During the 13th / 14th century the Italian merchants went to UK and along with the
merchandise carried with them the trading customs including the concept of marine
insurance. Marine insurance as such was not being practiced as a separate specialized
entity during that time since it were the merchants who used to transact marine
insurance business side by side with their general trading activities.

Fire Insurance:
After marine insurance fire insurance developed in present form. It had been observed
in Anglo-section Guild form for the first time where the victims of the fire hazards
were given personal assistance by providing necessaries of life. It had been originated
in Germany in the beginning of sixteenth century. The fire insurance got momentum
in England after the great fire in 1666 when the fire losses were tremendous.

11 | P a g e
Life Insurance:
The third in the list of development is the life insurance business. The earliest policy
of which there is a record dates back to 1583. During this period only short term
polices were used be issued meaning that only at the death of the life assured during
the term period the money was to be paid. On survival nothing was payable. In 1693
Halley introduced the mortality table giving a definite value to risk of death. In 1974,
the life Assurance Act was passed in the British parliament requiring the presence of
insurable interest before one could affect a life policy on the life of another. All these
gradually gave life assurance a sound, systematic and scientific basis as we see in the
present day.

2.3 Development of Insurance in Bangladesh


Insurance is not a new idea or proposition to the people of Bangladesh. About half a
century back, during the British rule in the then India, some insurance companies
started transacting insurance business, particularly life in this part of the world. Since
1947 until 1971 insurance business gained momentum in this part of what was then
known as East Pakistan. There were about 49 companies transacting both life and
general insurance business. These companies were of various origins like British,
Australian, Indian, West Pakistani and East Pakistani. Except a few companies these
were mostly limited liability companies acting under a free competitive economy.
With the emergence of the People’s Republic of Bangladesh, the government in order
to make available the fruit of liberation to the general mass, nationalized the insurance
industry in 1972 by presidential order no 95 more specially known as the Bangladesh
insurance (Nationalization) order 1972.

By virtue of the order, save and except postal life insurance and foreign life insurance
companies (other than the Pakistani companies), all companies and organizations
transacting all types of insurance business in this country came under this
nationalization. Five insurance corporations were basically established, Viz.

i) Jatiya Bima Corporation


ii) Teesta Bima Corporation
iii) Karnaphuli Bima Corporation
iv) Rupsa Jibon Bima Corporation
v) Surma Jiban Bima Corporation
The Jatiya Bima Corporation was not an underwriting corporation, actually, it was a
central corporation to supervise and control the activities of the remaining four
subsidiary corporations. As per this order Teesta and Karnaphuli were made
responsible for general insurance business and Rupsa and Surma were made
responsible for life insurance business. All the existing 49 companies were merged

12 | P a g e
with this 4 corporation whilst life companies or the life portion of a composite
company joined the Rupsa and Surma, the general companies or the general portion of
a composite company joined the Teesta and Karnaphuli. Formation of two
corporations Although the basic idea behind creating 2 corporations in each main
branch was to encourage competition even under a nationalized system, it was
observed soon that the unnecessary administration expenses for maintaining these two
corporations in each front and are apex institution.

Therefore, on 14th May, 1973 the structural arrangement under nationalization was
changed vide act VI 1973. The previous 5 corporation were abolished and instead 2
corporations were established, Viz.

i) Sadharan Bima Corporation

For transacting general insurance business only. The two general insurance
corporations were merged under it.

ii) Jibon Bima Corporation

For transacting life insurance business only. The two life insurance corporations were
merged under it. In the sector, postal life insurance business and corporation of life
business by foreign companies (other than Pakistan) are still permitted as before. This
is the present structure under which the insurance business in transacted in this
country. Insurance is not altogether a new idea in this country, but somehow it could
not flourish much. Now however, there is enough provision for tapping the untapped
resource and potentialities. During the Pakistan or Pre-Pakistan period this market
was basically a production market dealing only in limited conventional types of
insurance business both in life and general. Consideration used to be missing as to
what type of policy would suit best the requirement of the people. Hence, even though
there was tremendous growth prospect, it never gained momentum in the past. Lake
of proper technical know-how of the insurance personnel and the general ignorance of
the public as to the importance of insurance business were also partly responsible for
extremely slow growth of insurance activities in the past.

It should be remembered by the students that the insurance industry had to pass
through a number of difficult during the initial stages after nationalization. However,
the handicaps were kept under constant review by the government on the management
of the industry and remedies are gradually being implements to accelerate the growth
and progress.

13 | P a g e
Year Establishment/Act Authority
1 March,1972 P.O. 19/1972 Adoption of Ministry of Commerce,
Insurance Act in Bangladesh Bangladesh

8 March,1972 P.O. 95/1972 Bangladesh


Insurance (nationalization)
order 1972

26 March,1972 P.O. 30/1972 Bangladesh


Insurance (Emergency
provision) order 1972

1 Nov,1972 P.O. 133/1972 Bangladesh


Insurance (Nationalization &
Amendment) order 1972

30 Dec,1972 P.O. 161/1972 Bangladesh


Insurance
Corporation(Dissolution) order
1972

1972 Corporation ordinance 1973

Nov, 1973 Bangladesh Insurance


Academy
1984 Private Insurance Company
Act.
After 2008 Govt. Life Insurance in one &
private life insurance company
is 19.

14 | P a g e
2.4 Implication of Five Forces Model (By Michael E. Porter) in
Insurance Industry of Bangladesh

Risk of entry by potential


competitor

Bargaining power of Rivalry among establish firms Bargaining power of


suppliers buyers
Threat of substitute products

Michael E. Porter of the Harvard School of Business Administration, developed a five


forces model which helps the business managers analyze the forces of the
environment within a specific industry context. In this respect, I like to make
discussion below in respect of insurance industry, its importance and implication in
Bangladesh.

i) Risk of Entry by Potential Competitors:

The change of entry by potential competitors depends on the barriers to entry. The
higher the barriers are, the lower is the chance to entry by the potential competitors. In
this respect, Bangladesh government has not given permission to establish any
insurance company except ALICO. As such, the insurance companies of Bangladesh
are enjoying better facilities and benefits, but to allow the foreign insurance
companies are dependable on the wishes of Bangladesh government. So our own
insurance companies are always remaining anxious if Bangladesh government permits
insurance companies of foreign countries, then they will be in the face of hard
competition.

ii) Rivalry Among Establish Companies:

The extent of rivalry depends on the function of three factors, such as, a) competitive
structure, b) Demand conditions and c) Exit barriers. Competitive structure refers to

15 | P a g e
the number and size of companies in an industry. Structures vary from fragmented to
consolidate. Growing demand is good for existing companies because it gives
opportunities to the existing companies to expand operation. Exit barriers could be
economic, strategic and even emotional. In the light of above discussion the insurance
companies of Bangladesh are better in their competitive structure, demand condition,
but the spoken in the last exit least number of barrier.

iii) Bargaining Power of Buyer:

Buyers can be viewed as a competitive threat when they force down prices or demand
higher quality products and better services. Alternatively weak buyers give a company
the opportunity to raise prices and earn greater profits. The bargaining power of the
policy holders of insurance companies of Bangladesh are mostly limited. As such they
are enjoying better facilities.

iv) Bargaining Power of Supplier:

Suppliers are most powerful in the following circumstances-

 When the product that suppliers sell has few substitutes and is important to the
company.

 When the company’s industry is not an important customer to the suppliers.


Above stated factors are not a matter of thread for the insurance companies of
Bangladesh.

v) Threat of Substitute Products:

When there are close substitutes, they pose strong competitive threat. It results in
reduction in price by limiting profitability. In this regard the insurance companies of
Bangladesh are mostly in safe condition, As insurance is the substitute of its own
itself.

Chapter 3

16 | P a g e
COMPANY OVERVIEW

3.1- Corporate Information


3.2- Objectives
3.3- Popular Life Insurance Company's Products & Services Policies

3.1 Popular Life Insurance Company Limited

17 | P a g e
Popular Life Insurance Co. Ltd. established on September 26, 2000. Since the
beginning, Popular Life Insurance Ltd. set an outstanding standard to gain the
popularity among all classes of people. Popular Life started micro life insurance-cum-
savings products basically went to the poor people.

Corporate Information
Company name : Popular Life Insurance Co. Limited
Year of Establishment : 2000
Date of Incorporation : 26th September, 2000
Registered Office : Peoples Insurance Bhaban
36 Dilkusha C/A (3rd Floor),Dhaka-1000.

Authorized Capital : Tk. 500 Crores


Paid Up Capital : Tk. 30.8308 Crores (Approx)
Nature of Business : Life Insurance Business
Auditors : M.N Islam & Co.
Chartered Accountants
123/4 Tejkunipara, Tejgaon, Dhaka-1215

Actuarial Consultant : Mohammad Sohrab Uddin PhD, AIA

Re-Insurer : Scor Global Life Re, Singapore Branch


Asean Retakaful International (L)td, Malaysia &
Jibon Bima Corporation, Bangladesh

Consultant : Roy Debdas


Rtd. Controller of Insurance & Chief Cotroller of
Insurance ( Incharge)
Govt. of the people's Republic of Bangladesh

Senior Consultant : Md. Anis Uddin Miah


Rtd. Joint Secretary
Govt. of the People's Republic of Bangladesh

Adviser : B.M. Muzammel Haque


Member of Parliament
Shariatpur-1
Organizing Secretary
Bangladesh Awamileague
Central Executive Committee

Legal Adviser(s) : i) Md. Aslam Miah

18 | P a g e
M.A, LLB, Advocate, Supreme Court of Bangladesh

: ii) Faujia Yesmin


B.A, LLB, Assistant Public Prosecutor, Dhaka Judge Court

: iii) K.M Rezaul Firoj LLB(Hon's),


LLM, Advocate, Supreme Court of Bangladesh

: iv) Mohammad Shajahan Howlader


M.A LLB, Dhaka Judge Court

: v) Kala Chand Saha


B.ss(Hon's), LLB, Advocate, Supreme Court of
Bangladesh
Judge Court, Patuakhali

: vi) Advocate Chowdhury Wahidur Rahman


LLB, Dhaka University

Board of Directors

Mr. Hasan Ahmed : Chairman

Mr. Md. Motaher Hussain : Vice Chairman

Mr. M. Fazle Taher : Director


Mr. Shamsul Arefin Khaled : Director
Mrs. Nurjahan Ahmed : Director
Mr. Kabir Ahmed : Director
Ms. Farjana Jahan Ahmed : Director
Mr. Mohammed Amir Hossain Chowdhury : Director
Mr. Mohammed Zahirul Islam Chowdhury : Director

Mr. A K M Aminul Mannan : Independent Director


Mr. Md. Khaled Mosharef Hossain : Independent Director
Mr. B M Yousuf Ali : Managing Director &
CEO
Mr. Mostofa Helal Kabir : Company Secretary

Bankers

19 | P a g e
Argani Bank Ltd. Exim Bank Ltd.
Dhaka Bank Ltd. Pubali Bank Ltd.
Al-Arafah Islami Bank Ltd. Jamuna Bank Ltd.
Bangladesh Krishi Bank Janata Bank Ltd.
Islami Bank Bangladesh Ltd. The City Bank Ltd.

Social Islami Bank Ltd. Sonali Bank Ltd.

3.2 Objectives

Knowledge:
To perfectly combine global expertise blended with local knowledge to remain as
pioneer life insurer.

Care:
To provide a world class customer service, which is responsive, personalized human
and empathetic.

Honesty:
To ensure honesty and trust in every cornerstone through integrity.

Excellence:
Aimed to be focused on the value of continuous improvement of human resources and
the organization by striving for the highest standards of quality in every aspect of its
modus operandi.

3.3 Popular Life Insurance’s Products and Services Policies:

20 | P a g e
Popular Life Insurance Company provides several types of policies to its customers.
Generally they divided their policies in two categories.

Individual Micro
Ekok Bima Al-Amin Bima

Islami Bima Takaful Janapriya Bima

Al-Barakah Islami Bima (Ekok) Islami DPS

Janapriya Ekok Bima Al-Barakah Islami DPS

IDPS Ekok Bima Popular DPS

Al-Amin Ekok Bima

There are several types of policies that the company served to its policy holders like
extra care. These are:

Accidental Death Benefit (ADB)

Permanent Disability and Accident Benefit (PDAB)

Chapter 4

21 | P a g e
LITERATURE REVIEW

4.1- Insurance Definition


4.2- Major Types of Insurance
4.3- Life Insurance Definition
4.4- Reason's for Buying Life Insurance Policies
4.5- Advantages of Life Insurance
4.6- Disadvantages of Life Insurance

4.1 What is insurance?

22 | P a g e
Insurance is the equitable transfer of the risk of a loss, from one entity to another in
exchange for payment. It is a form of risk management primarily used to hedge
against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a
company selling the insurance; the insured, or policyholder, is the person or entity
buying the insurance policy. The amount of money to be charged for a certain amount
of insurance coverage is called the premium. Risk management, the practice of
appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's promise
to compensate (indemnify) the insured in the case of a financial (personal) loss. The
insured receives a contract, called the insurance policy, which details the conditions
and circumstances under which the insured will be financially compensated.

4.2 Major Types of Insurance

Auto insurance
Auto insurance protects the policyholder against financial loss in the event of an
incident involving a vehicle they own, such as in a traffic collision.

Coverage typically includes:

 Property coverage, for damage or theft of the car.


 Liability coverage, for the legal responsibility to others for bodily injury or
property damage.
 Medical coverage, for the cost of treating injuries, rehabilitation and sometimes
lost wages and funeral expenses.

Gap insurance
Gap insurance covers the excess amount on your auto loan in an instance where your
insurance company does not cover the entire loan. Depending on the companies
specific policies it might or might not cover the deductible as well. This coverage is
marketed for those who put low down payments, have high interest rates on their
loans, and those with 60 month or longer terms. Gap insurance is typically offered by
the finance company when any person first purchase his/her vehicle. Most auto
insurance companies offer this coverage to consumers as well.

Health insurance

23 | P a g e
Health insurance policies cover the cost of medical treatments. Dental insurance, like
medical insurance, protects policyholders for dental costs. In most developed
countries, all citizens receive some health coverage from their governments, paid for
by taxation. In most countries, health insurance is often part of an employer's benefits.

Accident, sickness, and unemployment insurance


Disability insurance policies provide financial support in the event of the policyholder
becoming unable to work because of disabling illness or injury. It provides monthly
support to pay such obligations as mortgage loans and credit cards. Short-term and
long-term disability policies are available to individuals, but considering the expense,
long-term policies are generally obtained only by those with at least six-figure
incomes, such as doctors, lawyers, etc. Short-term disability insurance covers a person
for a period typically up to six months, paying a stipend each month to cover medical
bills and other necessities.

Long-term disability insurance covers an individual's expenses for the long term, up
until such time as they are considered permanently disabled and thereafter. Insurance
companies will often try to encourage the person back into employment in preference
to and before declaring them unable to work at all and therefore totally disabled.

Casualty insurance
Casualty insurance insures against accidents, not necessarily tied to any specific
property. It is a broad spectrum of insurance that a number of other types of insurance
could be classified, such as auto, workers compensation, and some liability
insurances.

Life insurance
Life insurance provides a monetary benefit to a decedent's family or other designated
beneficiary, and may specifically provide for income to an insured person's family,
burial, funeral and other final expenses. Life insurance policies often allow the option
of having the proceeds paid to the beneficiary either in a lump sum cash payment or
an annuity. In most states, a person cannot purchase a policy on another person
without their knowledge.

Property insurance
Property insurance provides protection against risks to property, such as fire, theft or
weather damage. This may include specialized forms of insurance such as fire
insurance, flood insurance, earthquake insurance, home insurance, inland marine
insurance or boiler insurance.

4.3 What is life insurance?

24 | P a g e
Life insurance (or commonly life assurance, especially in the Commonwealth) is a
contract between an insured (insurance policy holder) and an insurer or assurer, where
the insurer promises to pay a designated beneficiary a sum of money (the "benefits")
in exchange for a premium, upon the death of the insured person. Depending on the
contract, other events such as terminal illness or critical illness can also trigger
payment. The policy holder typically pays a premium, either regularly or as one lump
sum. Other expenses (such as funeral expenses) can also be included in the benefits.

Life policies are legal contracts and the terms of the contract describe the limitations
of the insured events. Specific exclusions are often written into the contract to limit
the liability of the insurer; common examples are claims relating to suicide, fraud,
war, riot, and civil commotion.

Life-based contracts tend to fall into two major categories:

 Protection policies – designed to provide a benefit, typically a lump sum payment,


in the event of specified event. A common form of a protection policy design is
term insurance.

 Investment policies – where the main objective is to facilitate the growth of


capital by regular or single premiums. Common forms (in the U.S.) are whole life,
universal life, and variable life policies.

4.4 Reasons that's why people buy life insurance policies


 To protect their family if they lose a job or change jobs that had provided life
insurance.
 To pay for funeral expenses, loans or any outstanding debt.
 To cover their children's' future education expenses if they are not there to
provide.
 To provide funds for their family to pay off a home mortgage.
 To protect a business by letting partner/beneficiaries buy out a deceased partner's
business interests.
 To set an example of responsibility and family values for their children.
 To provide child care or elder care for aging parents if the top caregiver/provider
passes away.
 To provide peace of mind for their loved ones in uncertain financial times.
 To comfort their loved ones in a difficult time of loss and grief.
 They do it for love. To insure those they love the most by leaving them a legacy of
their life.

4.5 Advantages of Life Insurance

25 | P a g e
 Life insurance provides an infusion of cash for dealing with the adverse financial
consequences of the insured's death.
 Life insurance enjoys favorable tax treatment unlike any other financial
instrument.
 Death benefits are generally income-tax-free to the beneficiary.
 Death benefits may be estate-tax free if the policy is owned properly.
 Cash values grow tax deferred during the insured's lifetime.
 Cash value withdrawals are treated on a first-in-first-out (FIFO) basis, therefore
cash value withdrawals up to the total premiums paid are generally income-tax
free.
 Policy loans are income tax free.
 A life insurance policy may be exchanged for another life insurance policy (or for
an annuity) without incurring current taxation.

4.6 Disadvantages of Life Insurance


 Policyholders forego some current expenditure to pay policy premiums.
Moreover, life insurance is typically purchased for the benefit of others and
usually only indirectly for the insured person.
 Cash surrender values are usually less than the premiums paid in the first several
policy years and sometimes a policy owner may not recover the premiums paid if
the policy is surrendered.
 The life insurance purchase decision and the positioning of the life insurance can
be complex especially if the insurance is for estate planning, business situations or
complex family situations.
 The life insurance acquisition process can be annoying and perplexing (e.g. Is the
life insurance agent trustworthy? Is this the right product and carrier? How can
medical underwriting be streamlined?).

Chapter 5

26 | P a g e
INSURANCE ACTIVITIES OF
POPULAR LIFE INSURANCE COMPANY

5.1- Ordinary Life Insurance


5.2- Micro Insurance
5.3- Premium Collection
5.4- Formulation Process of the Life Insurance Contract
5.5- Risk Management
5.6- Settlement of Claim
5.7- Customer Service
5.8- Information Policy
5.9- Corporate Social Responsibility
5.10- Customer Satisfaction

27 | P a g e
Generally, Popular Life Insurance Company Limited offers two types of Life
Insurance policies to its customers. These are:

 5.1 Ordinary Life Insurance


Popular Life offers a wide variety of ordinary life (Akok Bima) product/plans ranging
from the most common endowment type, pension plan, different types of payment
(two/three/four/five) plans etc. The plans have been designed keeping in view the
diverse and multifaceted needs of the insuring people belonging to different strata of
the society. Some of the popular plans are briefly described below.

I. Endowment plan with profits (Tables-01) The most common and widely popular,
this plan provides for a fixed sum at end of a particular term or at earlier on death of
the assured. This is a straightforward coverage allowing a person to plan his future
needs for security and projected savings through means of insurance i.e. for security
and projected savings through means of insurance.

II. Installment payment plans with profits :

a) Biennial payment assurance plan (Tables-02) - is given for 10, 15 & 20 years' term and
provides for payment of a portion of sum assured bi-annually after expiry of the 4th year of
the policy, if the policyholder is then living. The amount of installment and when payable is
shown in the table below

Term Amount of When payable Amount of Sum


installment Assured payable on
maturity
10 Yrs. 20% Upon expiry of 4th, 6th, 8th yrs. 40%
15 Yrs. 15% Upon expiry of 4th, 6th, 8th, 10th 12th yrs. 25%
20 Yrs. 10% Upon expiry of 4th, 6th, 8th, 10th, 12th, 20%
14th,16th & 18th yrs.

b) Three payment endowment assurance plan (Tables-03) Given for terms like 12, 15,
18, 21, 24 years with profits this plan provides for one fourth of the sum assured upon
expiry of each one third of the term and on death at anytime within the term the full
sum assured - payment of one or all the installments notwithstanding. In case of
survival to the end of the term remaining portion of the sum assured along with profits
is paid after deducting the installments already paid.

c) Four payment endowment assurance plan (Tables-04) - is given for 12, 16, 20, 24
& 28 years term with profits. This plan provides 15% sum assured upon expiry of one
fourth of the term, 20% sum assured upon expiry of two fourth of the term, 25% sum
assured upon expiry of three fourth of the term and the remaining 40% of the sum
assured along with accrued profits is paid at maturity.

28 | P a g e
d) Five payment endowment assurance plan (Tables- 05) - is given for 10, 15, 20, 25
& 30 years term (with profit). This plan provides 10% sum assured upon expiry of
one fifth of the term, 15% sum assured upon expiry of two fifth of the term, 20% sum
assured upon expiry of three fifth of the term, 25% sum assured upon expiry of four
fifth of the term, and the remaining 30% of the sum assured along with accrued profits
is paid at maturity.

III. Money back term assurance without profits (Table- 06) - This plan is
comparatively low cost plans. This plan provides full sum assured in case of
premature death within the term or refund of all premiums paid at end of term.

IV. Child protection plans with profits (Table - 07,09) : Multiple benefits in the form
of scholarship, monthly annuity etc. in addition to sum assured are available under
these plans. Under one plan (Table-07) sum assured or a part thereof is also payable to
the policyholder in case the child dies prematurely.

V. Assurance cum Pension and Medical Benefit plan (Table - 08) - without profits.
Under this plan pensions plus medical benefit are provided from an age designated by
the policyholder for life, guaranteed for a minimum period of 10 years i.e. if the
pensioner dies anytime within 10 years his designated nominee will get pension plus
medical benefit for remaining term of 10 years. Before pension starts, if the assured
policyholder dies, 10 times the annual pension plus 10% of medical benefit be paid as
a lump-sum to his nominee and the policy is terminated upon such payment.

VII. Single Payment Endowment Assurance with profit (Table No. 10): It is a single
Premium Policy offering for either 10 or 15 years term. Full sum assured along with
accrued bonus be paid either normal tenure of the policy expires or on death anytime
before date of maturity. Premiums are based on the age of the proposer. This plan
perfectly suits the needs of the executive class.

 5.2 Micro Insurance


Popular Life offers a wide variety of micro insurance products (Khudro Bima)
product/plans ranging in 2001 to facilitate the rural people to save their hard earned
money along with the coverage of insurance. Products are ranging from the most
common deposit pension scheme, small saving scheme plans etc. The plans have been
designed keeping in view the diverse and multifaceted needs of the rural insuring
people belonging to different strata of the society. Some of the popular plans are
briefly described below:

I. Islami DPS Akok Bima with profits (Tables-28) Based on our socio economic
prospective, Popular Life introduced monthly basis small saving scheme. The
prospective of this plan to facilitate the rural low income group to have certain
amount of money at the end of specified period. Premium starts from Tk. 200 to Tk.
3000 and term of the policy is given for 12, 15, 18 & 20 years term only.

29 | P a g e
II. Islami Deposit Pension with profits (Table - 57) - This plan aims at low income
people of our society. This plan provides full sum assured along with bonus in case of
premature death or successful completion of term.

III. Small savings term deposit scheme with profits (Table - 51, 55, 56) : Sum assured
ranging from Tk. 6000 to Tk. 60,000. Term of the policy is given for 12, 15 and 18
years. Full sum assured is provided along with accrued bonus in case of premature
death of the policy holder or at the end the policy term.

Policy Documents
Upon acceptance of the proposal, a pass book is issued to the policyholder detailing
all terms and conditions of the policy. The pass book serves as the purpose of
recording of all payments made by him towards the policy. For individual
policyholders the passbook serves as policy document.

5.3 Premium Collection


Popular Life Insurance Company basically serves its customers with their recruited
agents. So, the premiums are generally collected by the agents. But, policy holders
can pay the premium by going to the nearest branch of Popular Life Insurance
Company. They can also pay the premiums by some selected banks.

5.4 The process by which Popular Life Insurance Company formulate life
insurance contract
Popular Life Insurance Company serves policy by its agents. In this process agents
first find out a people who have a probability to take policy and then try to convince
him. If the person is satisfied then agent gives him a policy form to make the policy.

Offer of Proposal:

First of all, the company gives offer to a person with all information that’s he need to
know. If anybody wants to create a policy then he has to collect a form of application
as his wish and give a proposal to the company to create a policy by this form.

Consideration of Proposal:

After this, the company consider this proposal. For this reason they collect some
information's to justify the probability of risk of the proposal.

30 | P a g e
Collection of Medical Report:

In the next step, the company collects all kinds of information about the fitness of the
person and collect medical certificate and test report from him.

Collection of Agents Report:

Then the company collects information from the company agent.

Collection of Extra Information:

In this step the company collects more information if they need. They collect
information from the closer person of propose, from the personal doctor of propose
and from other trustable source.

Proof of Age:

To consider the proposal, company need to justify the age of the person. For this
reason they collect the birth certificate and other related documents of proof.

Selection of proposal:

In this step company select the proposal by justifying all information like medical
certificate, birth certificate, agents reports etc.

Acceptance of offer:

Then, the company accept the offer and announce the amount of premium to propose.

Insurance of Policy:

In the last step, the company collect money from the person and give him the policy
and the cover note.

5.5 Risk Management


Their risk management is a process of identifying, measuring, analyzing, monitoring
and controlling risks. In life insurance business the factors which may affect the risk
are usually those factors which are affecting the mortality; they are also called factors
affecting longevity of a person.

These factors are

a) Age
b) Physical condition
c) Personal History- 1) Health record, 2) Past habit, 3) Previous occupation,
4) Insurance history

31 | P a g e
d) Family History
e) Occupation
f) Residence
g) Present habits
h) Morals
i) Race and Nationality
j) Sex
k) Economic Status
l) Defense Service etc.
For this, they collect above risks from various sources because it is not possible to get
all information from one source and this are:
a) The proposal form
b) Medical Examiner’s Report
c) Agent’s Report
d) The Inspection Report
e) Private Friends Reports
f) Attending physicians
g) Medical Information Bureau
h) Neighbors and Business Associates
i) Commercial Credit investigation Bureau etc.

After collecting the risks the company confirm the following principles in their risk
management practices and then accept the offer of proposal and announce the amount
of premium to propose.

a) To define risk profile on the basis of their risk tolerance.


b) To determine risks and analyze them from the beginning with the help of their risk
strategy.
c) To comply with regulatory requirement and guidelines for risk management.

32 | P a g e
5.6 Settlement of Claim
Image and goodwill of the corporation largely depend on early settlement of claims.
Popular Life Insurance Company fulfill the claim in this situation.

1. Payment of claim after certain period. That means corporation fulfills the claim if
the policy is matured. It may be 10, 15, or 20 years.

2. Payment of claim after the death of insured: Company pay insured money after the
death of the policy holder according to the contract of the policy here need—

a. Proof of age of the insured.


b. Proof of death of the insured.
c. Succession certificate
d. Payment of Claim

5.7 Customer Service


The reputation and progress of the company largely depends on prompt and efficient
services rendered to the policyholders. Keeping this in view, Popular Life Insurance
Company have further strengthened their servicing and computer departments for
rendering quick services to policyholders and marketing personnel’s. In order to give
easy access to their products and to give best possible services to the customers, the
company offers personalized services by recruiting highly experienced and customer
focused professionals.

5.8 Information Policy


Popular Life Insurance Company informs regulatory authorities, and the public in an
open, transparent and timely manner relating to its operational performance and
progress made towards achievement of corporate goals. Equal treatment to all
shareholders is the guiding principle behind their partnership oriented approach. They
practice and nurture an open dialogue with their shareholders based on mutual respect
and trust. The most important tools for the outflow of information from the company
are annual reports, statements, media release, disclosures to regulatory authorities,
annual general meetings, extra ordinary general meetings etc. This promotes an
understanding of their objectives and ensures a high degree of awareness about their
company.

5.9 Corporate Social Responsibility


In recent years, there has been growing recognition and acceptance that the behavior
of business houses is an important factor in influence a wide range of social,
environmental, community and ethical issues. Their customers want to be treated
fairly. Their regulators want to be confident that they operate within the logical and
ethical standard with fairness, transparency and honesty. Their staff members want to
be paid competitively and treated with respect. Their shareholder want to be assured

33 | P a g e
that they consider the risks and opportunities while taking business decision and pay
good dividend every year.

The social spectrum under which they operate desires that they carry on their business
responsibility and positively contribute to the society and the environment. In this
instance, Popular Life Insurance Company involves itself in many activities that are
considered corporate social responsibility. Business is not only for making profits but
also do something good for the society so that the environment of the society is
become good. In the time of social responsibility, Popular Life Insurance Company
always tried to perform active roles and help the society by providing the required
service.

5.10 Customer Satisfaction


For instance, now a days, the functions and activities of the insurance are well known
to far and wide of the modern human society and its necessary is admitted by all.
During the tenure of the insurance policy, it is agreed system that the respective
insurance company is fully liable to make all compensations for any sorts of accident
of the policy holder. Now a day’s establishment of insurance business is one of the
most profitable businesses. With this end in view and in the hope/expected profits, so
many insurance companies have been established both in government and in private
sectors. But, for whom & by whom this companies are running with their flourishing
business, they never think for a single moment for the betterment of policy holders,
The companies obviously true or fact that the most of the insurance companies are
harassing their respective clients while they put up their legal claim after completion
of the tenure period or of happening any unwanted accident. In most of the cases, it is
observed that in the case of death, the respective companies create so many
hindrances for which the window wife or the fatherless minor Childs are to suffer
most. Most of the insurance companies continue their that type of misdeed and
unlawful activities

In this regard, Popular Life Insurance Company Limited has gained a good brand
image among its customers. For this reason the popularity of this company is
increasing day by day. As Popular Life Insurance Company Limited always cares for
its customers and they are increasing their facilities so that customer can access more
features in less time and with no harassments. Popular Life Insurance Company
always tried their best to settle the claims of their customers in a possible short time.

34 | P a g e
CHAPTER 6

ANANLYSIS OF
POPULAR LIFE INSURANCE COMPANY'S ACTIVITIES

6.1- Financial Analysis(Graphical)


6.2- Analysis of Last 5 Years Business Performance
6.3- Balance Sheet
6.4- SWOT Analysis

35 | P a g e
Popular Life Insurance Company's business started with the creation of product or
service and ended with the attempt to sell it. Popular Life should start with the
knowledge of the market. So, it is necessary to find out what is needed, what will be
sold, only then should return the operation to create the product or service.

Today, Life Insurance Company is considered as a service organization. For the


process of conducting its own activities to achieve its own goal i.e. making and
assuring benefit, a fast growing leading insurance company considered services the
following ways:

 Solving all customer services and conservation related problems.


 Ensure the policy should be under write.
 Deposit the premiums.
 Ensure all kinds of claim benefits.

6.1 Financial analysis of their business activities(Graphical):

*Amount in Taka Crore

36 | P a g e
Year wise Premium Cumulative Investment
Cumulative Life fund

*Amount in Taka Crore

37 | P a g e
6.2 Last 5 Years Business Performance

Particulars 2012 2011 2010 2009 2008

Gross Premium 6,617,845,084 6,049,552,474 5,403,145,973 4,630,330,984 3,932,393,662

Life Fund 20,712,614,608 16,253,876,812 12,634,645,503 9,211,710,481 6,080,898,581

Claims 800,125,829 520,761,042 232,367,771 165,685,926 124,287,196

Total Assets 21,235,934,013 16,722,815,043 13,216,974,440 9,479,577,768 6,300,791,029

Total Current 3,512,453,210 2,881,694,360 2,605,065,179 2,042,807,766 1,428,988,749


Assets

Total Current 229,962,785 259,204,931 429,238,937 154,467,287 129,892,448


Liability

Fixed Assets 89,548,078 119,663,567 3,210,714,786 516,737,851 492,237,170

Investment 17,633,932,725 13,721,457,116 10,474,971,154 6,920,032,151 4,379,565,110

Table: Analysis of Business Performance of Last 5 years

6.3 Balance Sheet (Un-Audited)


As at 30th September 2014
Particulars 30.09.2014 31.12.2013 Growth rate

TAKA TAKA %

CAPITAL AND LIABILITIES


SHAREHOLDERS CAPITAL

Authorized 50,00,00,000 ordinary shares of Tk. 10 5000000000 5000000000 0.00


each
Issued, subscribed and paid up 30,830,795 308,307,950 308,307,950 0.00
ordinary shares of Tk. 10 each fully paid up in cash

Life insurance fund 27,195,410,370 24,794,138,810 9.68

Estimated liabilities in respect of outstanding 4,956,373 3,243,780 52.80


claims whether due or intimated

Sundry creditors and other liabilities 228,639,830 272,788,067 (16.18)

Premium deposits 18,986,870 24,882,909 (23.70)


Proposed dividend - - 0.00

Total 27,756,301,393 25,403,361,516 9.26

38 | P a g e
PROPERTY AND ASSETS
Loan 51,881,677 56,334,384 (7.90)
On insurer's policies within their surrender value 3,584,577 3,656,984 (1.98)
Home loan
48,297,100 52,677,400 (8.32)

INVESTMENT(AT COST) 16,398,352,540 12,936,922,690 26.76

Statutory deposit with Bangladesh Bank & Jamuna 15,000,000 15,000,000 0.00
Bank
Treasury bond 10,824,100,000 7,324,100,000 47.79
Membership of DSE & CSE 151,313,110 151,313,110 0.00
Shares and debentures 2,146,272,671 2,179,701,367 (1.53)
House property 3,260,656,544 3,265,797,998 (0.16)
Investment in subsidiary company 1,010,215 1,010,215 0.00

Interest, dividend and rents accruing but not due 1,670,032,550 1,517,131,518 10.08
Advance and deposits 352,374,423 343,165,118 2.68

Sundry debtors & others receivables 60,986,115 78,137,832 (21.95)

CASH AND BANK BALANCES 9,146,772,529 10,366,954,662 (11.77)

On fix deposit with banks 6,470,516,601 8,258,406,053 (21.65)


On STD account with banks 1,047,355,782 700,557,043 49.50
On current account with banks 252,546,732 108,397,188 132.98
Cash in hand 12,596,899 19,551,655 (35.57)
Branch petty cash 10,498,020 37,127,799 (71.72)
Collection in hand 1,353,258,495 1,242,914,924 8.88

OTHER ACCOUNTS 75,901,559 104,715,312 (27.52)

Fixed asset 53,154,970 79,758,233 (33.35)


Stamps, printings and stationary in hand 22,746,589 24,957,079 (8.86)

Total 27,756,301,393 25,403,361,516 9.26

39 | P a g e
6.4 SWOT Analysis of Popular Life Insurance Company Ltd.

The overall evaluation of a company’s strengths, weaknesses, opportunities and


threats is called SWOT analysis. It involves monitoring the external and internal
environment.

External Environment (opportunity and threat) analysis

Opportunity:
♣ Huge business area.
♣ Introducing on line system all over the country in insurance business.
♣ Growth of sales volume.
♣ Introducing more branches.
♣ Develop relations and correspondence with foreign Insurance companies.
♣ Could make contacts with more banks.
Threats:
♣ Other Insurance Companies in Bangladesh.
♣ Different classic service of other Insurance Companies.
♣ Political unrest and Economic recession.
♣ Illegal business operation by the some clients.
♣ New entrants.
Internal Environment (Strengths/Weakness) analysis

Strength:
♣ Quality of the Popular Life management.
♣ Location of the Popular Life Insurance sales & Agency Office.
♣ Good banker-customer relationship.
♣ Financial condition of Popular Life Insurance Company Ltd.
♣ Environmental constraints.
♣ Personal relationship with the Popular Life Insurance Company employees.
Weakness:
♣ Sometimes it takes longer to meet claims.
♣ Some employees could not describe the actual things to individuals.
♣ Sometimes it could not get its target in service center.

40 | P a g e
CHAPTER 7

FINDINGS

41 | P a g e
Findings
Insurance is as old as the civilization. It was present in the form of mutual help.
Insurance is a co-operative device of distributing losses, falling on an individual or his
family over a large number of persons, each bearing a nominal expenditure and
feeling secure against heavy of loss. Insurance provides certainty of payment at the
uncertainty of loss, it provides capital, protection & prevention of loss. It helps
Economic progress. Besides, we get more experience & information's about Popular
Life Insurance Company.

Factors influence the choice of Popular Life


Although respondents have been given 11 factors to rank in order of preference, it is
observed that they ranked on the average only four to six factor’s, that are:

i. Quality of the Popular Life management.

ii. Location of the Popular Life sales & Agency Office.

iii. Reputation of Popular Life

iv. Personal relationship with Popular Life's employees are normally considered by
most of the respondents. So, for the analysis of this study only these four factors have
been taken into accounts.

Average ranks given by the clients of Popular Life

Factors Quality of the Location of the Reputation of Personal


Popular Life Popular Life Office Popular Life relationship with
management Popular Life's
Respondents employees
Clients 3 1 2 2

No. of Clients 50 66 48 55
Response

(Both arithmetic mean and mode showed the same result)

The above table showed that “location of the Popular Life office” has got the first
rank in case of 66 respondents out of 79 respondents with the Popular Life. It is
viewed that 55 respondents have opined this factors as second rank, 50 and 48
respondents choose “Quality of the Popular Life management” and "Reputation of
Popular Life" as the third and second rank respectfully.

42 | P a g e
Here are some other important findings of this study that should be considered:

 It is one of the renowned companies in the country.


 The performance of Popular Life Insurance Company is getting better day by day.
 Financial growth of this company is very good.
 Huge capital.
 Better performance.
 Getting more from ordinary life insurance than others.
 Making movement in socio-economic security.
 Good banker-customer relationship.
 Have to give more and more importance on customers satisfaction & value.

Negative Aspects

 Sometimes takes longer time to meet up claims.


 sometimes they failed to elaborate many important things to the customer.
 Some agents are failed to give their best performance in their working sector.
 Many times they don't tell everything about the policies to the customer.
 Some terms and conditions are hard to understand and not properly executed.
 Sometimes the policy holders are being harassed.

43 | P a g e
Chapter 8

RECOMMENDATION & CONCLUSION

8.1- Recommendation
8.2- Conclusion

44 | P a g e
8.1 Recommendation(s)
There is no social recognition of insurance sector in Bangladesh, due to lack of proper
management in quality of customer service. So they should be firmly believe their
profitability, growth and market share of business depend on their quality of customer
service. In their customer service, they should focus on the following:

1. Relevant authorities in collaboration with supportive agencies may provide training


to the life insurance producers like agents, development officers and the like to
improve their insurance marketing skills regarding creation of new business, retention
of the existing business and popularizing the life insurance programs to the target
groups.

2. Trained and skilled insurance producers like agents and development officers are
prerequisites of effective insurance product marketing in the life sector but they are
found lacking.

3. Research and development program yet to get adequate attention. But adequate
research may lead towards the target of success and fulfillment. Life insurance
companies in Bangladesh should actively consider undertaking of research and
development programs in the fields of consumer research, service research and
research in service marketing policies and strategies etc.

4. In order to exercise smooth marketing practices in the life insurance products


marketing, existing insurance laws seem to be inadequate. Therefore it is thought
imperative that necessary legal reforms are made in the existing insurance laws
including those relating to life sector.

5. There should not be so many layers in life insurance companies between the branch
office and the agents and one field officer in between the corporation and the agents
should replace this unnecessary multi-tier organizational set up. This is essential for
reducing the expenses that has gone beyond the tolerable limit. Special committee on
insurance has also suggested this.

6. Fake agents such as ‘Benami Agents’, ‘Dummy Agents’ and ‘Benami employers of
Agents’ who indulge in malpractices should be eliminated and selection of agents
should be unbiased. Appointment of too many agents in a particular area should be
stopped. Fulltime agencies should be encouraged and part-time agencies should be
stopped.

7. There should be vigorous campaign throughout the country to make the people
aware of the utility and prospects of buying insurance.

8. The government should monitor the functions of insurance companies, appraise


their performance, and seize the license of companies that are engaged in corruption.

45 | P a g e
The government must take controlling responsibility in its own hands and must ensure
proper application of law.

9. The benefits of insurance should not be concentrated only in the urban areas. For
the sake of integrated and balanced development, companies should expand their
operations in the rural areas.

10. Companies should set up its training program for the policyholders. The insurance
academy is used for training the officers and insurance personnel but it has so far
neglected the training of policyholders for which claim submission become complex
and problematic resulting in delays in claim settlement.

11. The government should eliminate the difficulty in licensing procedure and should
not delay in the approval of new companies if all the requirements are fulfilled. It will
help not only to increase volume of business but also solve the problem of
unemployment.

12. The policy holders are very much worried about the settlement of claims.
Ordinary people also consider it as a prime constraint. Therefore, insurance
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.

13. Since life insurance business is not popular among low-income groups, the life
insurers should pay special attention to industrial labor force, which ultimately will
have greater mobility among rural people.

46 | P a g e
8.2 Conclusion
Insurance business is only commercial but it has become professional now.
Knowledge of insurance is as much essential as trading business for the society.
Privatization of Insurance business has added more significations for the people. The
prospects of insurance in the first years of the next millennium decide the direction of
insurance management. Safety, security and investment have become need of the
present society people, now, demand insurance as compared to the previous attitude of
selling insurance to people. They have become selective and practical. Insurance
industry has to meet the expectations of people.

Though Popular Life Insurance Company has some negative aspects, but the customer
satisfaction rate is more than any other insurance companies in Bangladesh. Day by day, they
are trying to improve their situation. And, the company is committed to its customers for
providing better services. Here Popular life insurance company limited could improve
its marketing strategy for customer satisfaction. Overall, we can see that Popular life
Insurance Company limited is one of the progressive Insurance Companies in
Bangladesh for its servicing and its better performance.

47 | P a g e
Reference(s)

Books

 M.N Mishra, "Insurance: Principles and Practice", 10th edition, S. Chand &
Co(2002-2003); page 23-87.
 Philip Kotler and Garry Armstrong , "Principles of Marketing" 13th edition,
Prentice–Hall(2010-2011); page 190-222.
 Philip Kotler & Kevin Keller, "Marketing Management", 12th edition, Prentice–
Hall(2006); page 17-55.

Internet Sources

 http://www.google.com(search engine), 20.02.2014; 10:30 A.M


 http://www.scribd.com, 21.02.2014; 8:00 P.M
 http://www.popularlifeins.com, 21.02.2014; 9:00 P.M
 http://www.jbc.com.bd, 20.02.2014; 12:00 P.M

Other Documents

 Popular Life Insurance Company Limited Annual Report-2013.


 Bangladesh General Insurance Company Ltd Annual Report 2004.
 Different journals.
 Different PDF & Document files.

48 | P a g e
Appendix

49 | P a g e
50 | P a g e

Potrebbero piacerti anche