Introduction:

Insurance is a way of protecting against these financial losses.

General insurance or non-life insurance policies, including automobile and homeowners policies,
provide payments depending on the loss from a particular financial event.
Anyone who owns an asset can buy insurance to protect it against losses due to fire or theft and so
on. Each one of us can insure our and our dependents health and wellbeing through hospitalization
and personal accident policies.
In this report we tried to show that how general insurance business operates in Bangladesh & how
important it is for economy & what types of problem it faces in our country.

Insurance:
Insurance is 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 insure themselves against the risk.
Insurance is not a new idea or proposition to the people of Bangladesh. About half a century back,
during the British regime in the then India, some insurance companies started 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 operating under a free
competitive economy.
After the emergence of the Peoples Republic of Bangladesh in 1971, the government, in order to
make available the fruit of liberation to the general mass, nationalized the insurance industry along
with the banks in 1972 by Presidential Order No. 95. At the same time, five insurance corporations
were initially established by the Government, viz, Jatiya Bima Corporation (National Insurance
Corporation), Teesta Bima Corporation (Teesta Insurance Corporation), Karnaphuli Bima
Corporation (Karnaphuli Insurance Corporation), Rupsa Jiban Bima Corporation (Rupsa Life
Insurance Corporation), Surma Jiban Bima Corporation (Surma Life Insurance Corporation).
On 14th May, 1973 the Insurance Corporation Act VI, 1973 was enacted under which the previous
five corporations were abolished and the following two corporations emerged:
Sadharan Bima Corporation for General Insurance and
Jiban Bima Corporation for Life Insurance in Bangladesh.

Sadharon Bima Corporation for general insurance deals with any kind of non-life insurances. Such
as: fire insurance, marine insurance, motor insurance, cyclone insurance, flood insurance,
engineering insurance etc.
On the other hand, Jiban Bima Corporation deals with the insurance of human life.

Sadharon Bima Corporation

Sadharan Bima Corporation is only state-owned General Insurance Corporation operating under the
direct control and supervision of the Ministry of Finance, Government of the Peoples Republic of
Bangladesh. It emerged on 14th May, 1973 under the Insurance Corporation Act (Act No. VI) of
1973 to deal with all classes of general insurance & re-insurance business emanating in
Bangladesh.
Thereafter, SBC was acting as the sole insurer of general Insurance till 1984. In the year 1984
Bangladesh Government allowed insurance Companies in the private sector and to that effect
promulgated the insurance Corporations (Amendment) Ordinance 1984.
SBC is entitled to 50% of public sector business in Bangladesh. Insurance Corporation
(Amendment) Act 1990 provides that fifty percent of all insurance business relating to any public
property or to any risk or liability appertaining to any public property shall be placed with the SBC
and the remaining fifty percent of such business may be placed with this Corporation or with any
other insurers in Bangladesh. But for practical reason and in agreement with the Insurance
Association of Bangladesh SBC underwrites all the public sector business and 50% of that business
is distributed among the existing 43 private general insurance companies equally under National
Co-insurance Scheme.
In respect of reinsurance, the same act provides that fifty percent of a companys reinsurance
business must be placed with the SBC and remaining fifty percent may be reinsured either with this
Corporation or with any insurer in Bangladesh or abroad. Right now there are 43 (forty three)
companies are listed under SBC as general insurance company.

Profile of Sadharan Bima Corporation:

Sadharan Bima Corporation is only state-owned General Insurance Corporation operating under the
direct control and supervision of the Ministry of Finance.
Government of the Peoples Republic of Bangladesh. It emerged on 14th May, 1973 under the
Insurance Corporation Act (Act No. VI) Of 1973 to deal with all classes of general insurance & reinsurance business emanating in Bangladesh.
Thereafter, SBC was acting as the sole insurer of general Insurance till 1984. In the year 1984
Bangladesh Government allowed insurance Companies in the private sector and to that effect
promulgated the insurance Corporations (Amendment) Ordinance 1984.
Sadharan Bima Corporation has a very strong financial base. It has a market share of over 20 % of
the total premium income of the insurance market of Bangladesh. SBC, the largest insurance
enterprise in the country, has a net worth of Tk.605 crore an authorized capital of Tk.20 crore, paid
up capital of Tk. 10 crore and the anticipated revenue during the current financial year is
approximately Tk. 417 crore.
Following characteristics of SBC proves its financial soundness: - Government owned enterprise Financial Soundness due to huge assets owned by SBC - Only re-insurer in Bangladesh - Wide network of offices - Public trust - Huge trained & skilled manpower - Large investable fund - Huge
Real Estate Assets in Dhaka, Chittagong, Khulna, Rajshahi, Bogra & Sylhet. SBC TOWER the
only multistoried car parking building in the heart of the capital city of Bangladesh
SBC is the sponsor shareholder of Investment Corporation of Bangladesh, Industrial Development
and Leasing Company, National Tea Company Limited, National Housing Finance and Investment
Ltd, Aramit Ltd, Central Depository BD Ltd. etc.
SBC has met all prudential norms in further its financial strength. Not only that, Sadharan Bima
Corporation has emerged as one of the countrys few largest taxpayers in the corporate sector.
SBC is entitled to 50% of public sector business in Bangladesh. Insurance Corporation
(Amendment) Act 1990 provides that fifty percent of all insurance business relating to any public
property or to any risk or liability appertaining to any public property shall be placed with the SBC
and the remaining fifty percent of such business may be placed with this Corporation or with any
other insurers in Bangladesh. But for practical reason and in agreement with the Insurance
Association of Bangladesh SBC underwrites all the public sector business and 50% Of that
business is distributed among the existing 43 private general insurance companies equally under
National Co-insurance Scheme.
In respect of reinsurance, the same act provides that fifty percent of a companys reinsurance
business must be placed with the SBC and remaining fifty percent may be reinsured either with this
Corporation or with any insurer in Bangladesh or abroad.
The main pillar of the SBC is insurance as well as reinsurance business. SBC is the largest non-life
insurance underwriter in Bangladesh in terms of gross premium, network of offices & trained
manpower. On the other hand, SBC reinsures the risks of private insurance companies operating in
Bangladesh.

Vision, Missions, Goals and Objectives:

Vision:
To be world class insurance & reinsurance organization.

Missions:

To be the premier organization in Bangladesh for all insurance and reinsurance business and
to provide quality service at affordable cost
To be the Insurer of the first choice in Bangladesh by offering top class security,
comprehensive, efficient services and professional conduct of business
Maintain SBCs leading position in the insurance market of Bangladesh.
To become an insurance organization Company of international standard by attaining the
highest confidence and trust of all concerned from home & abroad through improved
services, dedication, customer care and efficiency.
To place innovation technology and knowledge at the heart of the organizations growth
Goals Venture into other areas Bangladesh and abroad on the strength of SBCs core
competency.
Enter into and expand new insurance product and services to meet the changing needs of the
clients.
Fulfillment of SBCs social commitments towards the public as a state owned enterprise.
To achieve business targets.
To increase share of private sector business through marketing efforts.
To build, maintain and improve the commercial image of the organization and gain
recognition as a competent and professional insurer as well as re-insurer.
To overhaul and simplify administration system & procedure.
To attain full computerization and to utilize IT to its full potential.
To enhance the skills and flexibility of the employees through continuous training.
To ensure better return from SBCs investment.
To improve maintenance of existing real estate and expansion of it.

Product and Services:

SBC accepts different policies that are noted below Fire Insurance Policy.
Marine Hull Insurance Policy.
Marine Cargo Insurance Policy.
Motor Insurance Policy.
House Holders Comprehensive Insurance Policy.
Product Liability Insurance Policy.
Burglary insurance Policy.
Contractors All Risk Policy.
Engineering Insurance Policy.
Public Liability Insurance Policy.

Aviation Insurance Policy.

Workmens Compensation Policy.
Cash In Safe Insurance Policy.
Cash In Transit Insurance Policy.
Cash In Counter Insurance Policy.
Personal accident Insurance policy.
Peoples Personal Insurance Policy.
Dread Disease Insurance Policy.
Overseas Medi-Clam (Business and Holiday).
Overseas Medi-Clam (Employment and Student).
Export Credit Guarantee Insurance.
Livestock Insurance Policy.
All Risk Insurance Policies.
Fidelity Guarantee Policy.

Services Provided by Sadharan Bima Corporation:

Reinsurance Service:
After establishment of private Insurance Companies in the year 1985 in Bangladesh, Government
authorized SBC to accept 100% reinsurance of private insurance companies. SBC in its role as a reinsurer has lent support to the private insurance companies in Bangladesh in a big way. In view of
the huge net-worth and retention capacity, SBC has accepted both treaty and facultative businesses
from the private insurance companies.
In respect of reinsurance, the Insurance Corporation (Amendment) Act 1990 provides that fifty
percent of a companys reinsurance business must be placed with the SBC and remaining fifty
percent may be reinsured either with SBC or with any other insurer in Bangladesh or abroad. SBC
is doing direct insurance as well as private insurance companys reinsurance.
SBC is the largest General Insurance Corporation in Bangladesh doing direct Business to the tune
of BDT 886 million in the year 2005. During the same period its reinsurance premium income was
BDT 2627 million.
SBC is a shareholder of Asian Reinsurance Corporation. SBCs major portfolio comprises of fire,
marine cargo, aviation and engineering business.
SBC also accepts reinsurance business from overseas market through its intermediaries and as well
as directly.
The sound financial backing and rich experience earned over the years in the field of insurance,
reinsurance and financial services (which includes investment, risk improvement services etc),
brings SBC in an ideal position of a professional reinsurer in Bangladesh.
At the present growing economy in Bangladesh the premium income of SBC is also increasing day
by day.

Risk Improvement Services:

As the only state owned General insurance and re-insurance enterprise in Bangladesh Sadharan
Bima Corporation has extended its support to the insurance market in Bangladesh in an extended
way. Sadharan Bima Corporation would always endeavor to deliver the best customer services for
the fulfillment of insurance, reinsurance and risk management needs and problems to the insurance
market in Bangladesh.
On the order hand, Sadharan Bima Corporation provides risk improvement services to its valued
clients through:

Pre-underwriting inspection services:

SBC has the opportunity to take the necessary help and advice from the foreign reinsurer regarding
risk improvement techniques.
SBC regularly enlists professional and expert surveyors to asses risk and loss before and after loss.
It may be mentioned that license for the survey firms are issued by the office of the Chief
Controller of Insurance, Government of the Peoples Republic of Bangladesh.
Revenue
In according to the accounts record of Sadharan Bima Corporation (SBC), we have learnt SBC
earns revenue from three types of insurance Fire Insurance, Marine Insurance and Miscellaneous
insurance. In each type of insurance revenue is earned from Gross premium, Reinsurance premium
and other income which is shown in above chart and graph.
2005
2006
2007
2008
2009
Types of Insurance
Gross Premium
Fire Insurance

(in crore) (in crore) (in crore) (in crore) (in crore)
12.33
14.54
17.72
14.98
22.16

Reinsurance Premium 151.13

157.97
Other Income
6.63
4.53
Gross Premium
34.42
36.02
Marine Insurance
Reinsurance Premium 58.87
64.95
Other Income
5.09
5.70
Gross Premium
41.86
53.89
Miscellaneous Insurance Reinsurance Premium 57.66
68.48
Other Income
5.36
5.34
T.1 Investment Revenue

181.37
3.66
40.99
67.43
5.34
67.87
80.36
16.61

192.30
3.84
54.47
78.61
9.81
72.45
88.53
6.12

212.44
4.68
66.08
79.10
5.41
73.11
87.73
7.29

Investment Income:
Above bar chart shows us a clear view of investment income of SBC. From 2004 to 2009
investment income of SBC has increased but in a moderate rate. In the year of 2007 and 2008

investment income increased at a good rate. SBC should take steps to increase its investment
income.

Findings and Conclusion:

The intension of the study is to examine the role of Sadharan Bima Corporation general insurance
business in Bangladesh.
The major findings of the overall study are discussed below:
Sadharan Bima Corporation is controlled by the Ministry of Finance and it I is a government
institution.
Sadharan Bima Corporation collects premium from the people, in return, it assures to minimize
their risk involved in business. It collects premium from people by maintaining the rules and
principles.
Sadharan Bima Corporation has 8 zones with 84 branches and the number of employees is 959 for
giving more services to the policy holders.
It has 110000 policy holders, certificate holders and endorsement holders. It involves fire policy,
marine policy motor car policy, vehicle policy etc.
From 2005 to 2009 its revenue and profit is increasing. Its net claim and investment income is also
rising.

Impact on our economy

Sadharan Bima Corporation contributes to develop economic condition of Bangladesh. As a result,
Creating more savings

Makes capital formation,

Develops trade and commerce

Creates more employment

Social security

Jiban Bima Corporation for Life Insurance in Bangladesh:

The company was incorporated on 1973 and is mainly engaged in ordinary life, group term
insurance business. It also operates in non-traditional Micro life insurance business under the name
of Endowment, pension, child protection, Marriage endowment policy etc.
JBC provides several type of policy to its customer. Generally they divided their policy in two
categories.
Individual
Groups

Individual policy:
There is several type of life policy that JBC serves its individual Customer. It depend on the basis
of
Duration of policy
Method of premium payment
JBCs most of the individual customers are service holder who has a steady income. Company also
prefer foreign employee, businessman, Housewife if they have the ability to give premium
continuously.

Group Policy:
JBC provides group policy mainly to the companys worker or Employee. Company provides
service to its employee by giving the service of Life Insurance.
Benefits given by company to its policyholder
There is a several type of policy that company served to its policy holder like extra care. These are:
Disability of protection Rider
Accident Indemnity Certificate
Accident Death Benefit

Financial Control System:

Marketing & The process of create a policy:
JBC 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.

Process of Formation of Life Insurance contract:

Offer of Proposal:
Insurance company gives offer to a person with all information thats he need to know. If anybody
wants to create a policy 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 company consider this proposal. For this reason they collect some information to justify
the probability of risk of the proposal.

Collection of Medical Report:

In this step 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:

In this step company collects information from their 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 propose.

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:
In this step company accept the offer and announce the amount of premium to propose.

Insurance of policy:
In this step company collect money from the person and give him the policy and the cover note.
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 Age
Physical condition
Personal History 1) Health record, 2) Past habit, 3) Previous occupation, 4) Insurance
history
Family History
Occupation
Residence
Present habits
Morals
Race and Nationality
Sex
Economic Status

 Defense Service etc.

For this, they collect of above risks from various sources because it is not possible to get all
information from one source and this are:

The proposal form

Medical Examiners Report
Agents Report
The Inspection Report
Private Friends Reports
Attending physicians
Medical Information Bureau
Neighbors and Business Associates
Commercial Credit investigation Bureau etc.

After collect the risks the company confirm to the following principles in their risk management
practices and then accept the offer of proposal and announce the amount of premium to propose.
To define risk profile on the basis of their risk tolerance.
To determine risks and analyze them from the beginning with the help of their risk strategy.
To comply with regulatory requirement and guidelines for risk management.

Settlement of Claim:
Image and goodwill of the corporation largely depend on early settlement of claims. JBC fulfill the
claim in this situation.
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.
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

Proof of age of the insured.

Proof of Death of the insured.
Succession certificate
Payment of Claim
Payment of Group claim of policy
Here corporation pay insured money if the policy is matured other any accident will be
occurred inability of death according to the contract of the policy.

Customer Service:
The reputation and progress off the corporation largely depends on prompt and efficient services
rendered to the policyholders. Keeping this in view they have further strengthened their servicing
and computer departments for rendering quick services to policyholders and marketing personnels.
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.

Human Resource Development process:

Sound and effective planning of human resources is the key of success in the implementation of
development projects in any sector. This is why the issue of human resource development is taken
up at national level. The dedication, skills and professionalism of the employees are factors that
contribute to the success of a company. But this company has no better human resource
development process. So in human resource management, the company should focus on the
following areas:

Continuous training and acquiring of new skills.

Empowering people and creating a congenial work environment.
Staff briefing.
Competitive compensation package.
High end-service benefits which include Gratuity, contributory provident fund, Benevolent
fund etc.
Liberal bonus policy.
Encouraging innovation
Quality employees.
Equal opportunity.

Bonded by common goals, each of the employees will truly proud to be a member of JBC.

Information and communication Technology in operation:

Information technology explores the roles of information system, which defines systems analysis
and design and outlines the responsibilities of system analysis. It introduces system concept and
outlines categories of business information system. It appears a system development, which
provides the Information communication Technology (ICT) for the purpose of global networks,
Network Technology platform of Jiban Bima Corporation has the following key features:
Lightweight computer system
Web site
Contact Center
Data warehouse and
Simplified accounting system presently they are providing with information based service on the
following items:
System control/Development
Software control
Web Customer Service

Information policy:
Jiban Bima corporation 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. Besides, companies website:
www.jbc.gov.bd is rich with corporate information. This promotes an understanding of their
objectives and ensures a high degree of awareness about their company.

Research & Development and Training

In order to consolidate the existing position and cope with the ever-increasing growth potentials,
the company focuses on making continuous investment in Research and Development and Training
to optimize operational efficiency. The companys human resources policy is to build up quality
work force with skills and professional expertise. The objectives of designing all training programs
are to bridge the gap between present level of competence and desired level of competence of
human resources. The company is continually pursuing training program of its employees by the
high level executives. Training programs both centrally and regionally through the companys
training Department are being conducted regularly for desk and development personnel.
In addition to this, executives are sent to various training institutions Like Bangladesh Insurance
Academy, Bangladesh Insurance Association and other training institutions at home and abroad.
The company is convinced that investments made by their in recruiting executives and training of
new and existing employees will create the basis for the company to enhance its national leadership
role and to deal professionally with increasing complexities in life insurance business that are being
faced in the present as well as those that are likely to come up in the future.

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 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. They should commit to
responsible business practices and to a policy of continuous improvement in applying sound
environment and social standards in their dealings with all their stakeholders.

Contribution in Economy:
Insurance performs multi various economic functions. It helps economic progress. Class-wise
specific contribution in economy is discussed below:

Marine Insurance:
Marine Insurance primarily provides financial protection to the ship owners, cargo owners or the
freight owners in respect of any loss or damage to their interests caused by maritime perils insured
against. Marine insurance is a positive aid to various business enterprises, importers, exporters and
persons engaged in international trade and commerce.

Fire Insurance:
Like marine, the main contribution of fire insurance is to provide financial protection to the insured
in respect to loss or damage sustained by him to his properly caused by fire. Business efficiency is
increased with fire insurance.

Life Insurance:
Life insurance provides an income or capital sum to the dependants of the deceased. Life insurance
encourage saving. It provides profitable investment. When the owner of a business is free from
botheration of losses, he will certainly devote much time to the business. The carefree owner can
work better for the maximization of the profit. Thus, the life insurance meets all the requirements of
the economic growth of a country. National development depends largely on borrowed capital and
insurance companies by means of huge investment provides and facilities supply of this huge
capital.

Contribution in Society:
Insurance provides security and safety. The security wish is the prime motivating factor. So,
insurance affords peace of mind insurance protects mortgaged property. At the death of the owner
of the mortgaged property, the property is taken over by the lender of money and the family will be
deprived of the uses of the property. The insurance will provide adequate amount to the dependents
at the early death of the property-owner to pay off the unpaid loans. Life insurance can be
effectively utilized for providing childrens marriage and educational expenses. So, Life insurance
provides loss of human wealth. Through prevention of economic losses, insurance protects the
society against degradation. Insurance eliminates dependency. At the death of the husband or father,
the destruction of family needs no elaboration. Similarly, at destruction of property and goods, the
family would suffer a lot. The economic independence of the family is reduced or, sometimes, lost
totally. What can be more pitiable condition than this that the wife and children are looking others
more benevolent than the husband and father, in absence of protection against such dependency.
The insurance is here to assist them and provides adequate amount at the time of sufferings.

Development in Economic & Society:

The Economy of Bangladesh is in the process of a transition from a predominantly agrarian to a
quasi-industrial and service economy. Economy and Insurance industry go together and are
inseparable. Insurance company has been playing an important role in the economic development
of the company. They have generated employments for hundreds of people in the project and
industries established under their finance. The role and importance of insurance for development in
economy and society, here, has been discussed in two phases.
1. Wealth of the society is protected
Life insurance protects loss of human wealth. The human material, if it is strong, educated and
care-free, will generate more income. Each and every member will have financial security against
old age, death, damage, destruction and disappearance of his wealth including the life wealth.
Through prevention of economic losses, insurance protects the society against degradation. The
happiness and prosperity are observed everywhere with the help of insurance.
2. Economic Growth of the country
For the economic growth of the country, life insurance provides strong hand and mind, protection
against loss of life and adequate capital to produce more wealth. Life Insurance encourage saving.

Conclusion
Finally we can say that, Sadharan Bima Corporation helps the insurances to minimize their
different business risk. After all, in modern insurance system, Sadharan Bima Corporation, by
increasing the number of policy holders, is not only reducing financial risk of policy holders, but
also by reducing their risk, it is earning more profit. Insurance is a recent idea for Bangladesh and
we have many problems in our economy like lack of capital, unfavorable commercial position, lack
of savings etc. So Sadharan Bima Corporation should create more publicity among the insurances,
give training facilities to the employees, and more efficient management system. If government
also gives more attention to Sadharan Bima Corporation, thenit will contribute to our economy.