Specimen of an Assignment

Subject: Principles of Insurance

Assignment-Performance of a Life Insurance Company

Introduction

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 19 !"19!1, when 9 insurance companies transacted both life and general insurance schemes. #hese companies were of $arious origins British, Australian, Indian, %est Pakistani and local. #en insurance companies had their head offices in East Pakistan, &! in %est Pakistan, and the rest elsewhere in the world. #hese were mostly limited liability companies. 'ome of these companies were specialised in dealing in a particular class of business, while others were composite companies that dealt in more than one class of business. #he postal life insurance business and the life insurance business by foreign companies were still allowed to continue as before. In reality, howe$er, only the American life insurance company. continued to operate in the life sector for both new business and ser$icing, while three other foreign life insurance continued to operate only for ser$icing their old policies issued during Pakistan days. Postal life maintained its business as before As many as (& insurance companies are currently operating in the country. )f them, 19 are life insurance and * general insurance companies. .

Year -2009
Premium Income Name of the Company 1st Year 819,066,55 2 823,020,91 3 Renewal 2,685,349,06 9 2,449,959,50 7 roup term ! others 33,432,68 9 138,861,33 6 Total 3,537,848,31 0 3,411,841,75 6 Net premium Net claims Income Tax Dividend Investment Fixed Deposits

National Life Ins. Co. Ltd. Delta Life Ins. Co. Ltd

3,534,101,01 9 3,382,289,80 5

1,354,934,49 0 1,771,829,26 9

20,713,34 7 -

2,788,301,71 0 4,901,770,76 6

4,837,223,85 4 5,059,354,66 0

Comments/Observation
Performance of life insurance company

We can observe from the above table that this company earned net premium income Tk 3 3!"#"3$0 %heras paid claim Tk $3 #93##90 &That means ' claim paid from (et premium& This life company has remarkable investment Tk&& 2!""30$!$0& &

anglades! Insurance "ar#et

#he go$ernment of Bangladesh nationalised insurance industry in 19!& by the Bangladesh Insurance +,ationalisation- )rder 19!&. By $irtue of this order, sa$e and e.cept postal life insurance and foreign life insurance companies, all 9 insurance companies and organisations transacting insurance business in the country were placed in the public sector under fi$e corporations. #hese corporations were/ the 0atiya Bima 1orporation, #ista Bima 1orporation, 2arnafuli Bima 1orporation, 3upsa 0iban Bima 1orporation, and 'urma 0iban Bima 1orporation. #he 0atiya Bima 1orporation was an ape. corporation only to super$ise and control the acti$ities of the other insurance corporations, which were responsible for underwriting. #ista and 2arnafuli Bima 1orporations were for general insurance and 3upsa and 'urma for life insurance. #he specialist life companies or the life portion of a composite company 4oined the 3upsa and 'urma corporations while specialist general insurance companies or the general portion of a composite company 4oined the #ista and 2arnafuli corporations. After 19!*, general insurance business became the sole responsibility of the 'adharan Bima 1orporation. 5ife insurance business was carried out by the 0iban Bima 1orporation, the American 5ife insurance 1ompany, and the Postal 5ife Insurance 6epartment until 199 , when a change was made in the structural arrangement to keep pace with the new economic trend of liberalisation. #he pri$atisation policy adopted in the 1978s pa$ed the way for a number of insurers to emerge in the pri$ate sector. #his resulted in a substantial growth of premium incomes, competition, impro$ement in ser$ices, and introduction of newer types of business in wider fields hitherto untapped. Prior to pri$atisation, the yearly gross premium $olume of the country was appro.imately #k 988 million in general insurance business and appro.imately #k 788 million in life insurance business. In &888, premium incomes rose to #k ,888 million in general insurance business and #k 9,888 million in life insurance business.

Conclusion

In the life sector, the rate of annual growth is around 25-27 per cent. This is otherwise quite impressive. But in a country with population of !" million the per capita insurance it is very low which is, in per capita terms, only appro#imately T$. 5", while in %a$istan this amount is more than %a$istan rupee &"" and in India more than Indian rupee 7"". 'ome 7"" to ("", out of every thousand population, are covered )y insurance in most developed countries vi*, the +',, -rance, .apan, the +/ etc. 0ven in some developing countries li$e %a$istan, India, and Thailand this num)er is "", 5" and 7" respectively. But this num)er is not yet more than " in Bangladesh. Insurance premium as a percentage of 12% is around ! per cent for .apan, & per cent for 'outh ,frica, 2 per cent for 'outh /orea, (." per cent for +/ and 2." per cent in India while for Bangladesh it is less than ". per cent. +ndercutting of premium rates especially in group insurance, high rate of re)ate in ta)ular rates of premium, high lapse ratio, acute shortage of professionally qualified e#ecutives, low return on investment of insurance fund compared to other investments etc., are some of the acute draw)ac$s. ,ll these pro)lems hamper seriously the development of life insurance in Bangladesh.