WELCOME TO

OUR
PRESENTATION
Presentation Topic

“Operations of General Insurance Companies in

Bangladesh:
A Case of Pioneer Insurance Company Limited”
PRESENED BY:
Group Name- Sensible
Group No-5
Group members:
Arup Kumar Saha
51429038
Md.Faysal Sarker
51429025
Mohammad Navid Bin Zahid 51429020
Md.Omar Faruk Rajib 51429064
Md.Shahidul Islam
51429010
PRESENED TO:

Nazmul Hasan Palash

Assistant Professor
University of Dhaka
Department of Banking and Insurance
EMBA Program
Course Name: Fundamentals of Insurance
Course Code: FB 503
Semester: Spring 2015
What is Insurance?

• Insurance is a system of spreading the risk

of one to the shoulders of many. 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.
Evolution And Company Profile Of pioneer Insurance

1. Pioneer Insurance Company Limited was sponsored &

founded in 1996.
2. Having authorized capital of Tk. 1 (One) Billion/USD 12.50
Million.
3. Having paid up capital of Tk. 508.95 million/USD 6.53
Million.
4. Current Chairman Mr. A.K.M. Rahmatullah, Member of the
Parliament & Managing Director of Apex Tannery Ltd.
5. former Chairman Mr. Tapan Chowdhury, Managing
Director, Square Group & Ex-Adviser of the Care Taker
Government of People’s Republic of Bangladesh
COMPANY AT A GLANCE

Registered Head Office- Symphony (5th Floor),

Plot # SE(F), 9 Road # 142, South Avenue, Gulshan-
1, Dhaka-1212, Bangladesh.
Number Of Branches- 40.
Number Of Employees- 525.
Member of International Organization:
 Federation of Afro-Asian Insurers and Reinsurers
(FAIR).
 Association of Insurers and Reinsurers of Developing
Countries (AIRDC).
Vision of PICL

• To Foster the industrial & Economic growth of

Bangladesh.
• To optimize the retention of Bangladesh business.
• To work towards minimization of losses and develop
Risk Management Technologies.
• To function as a strong and dynamic non-life insurer.
Mission of PICL

• To become the leading insurance company of Bangladesh excelling in

every aspect of its business and in delivering its obligations as a
good corporate citizen to its clients, employees, shareholders, public
and to the country.
Caring for you, forever…
We Strive for.....
 Best Service to our Clients.
 Protection of Investment of Shareholders
 Welfare of our Employees
 Ethical and moral social order.
 Transparency in Disclosures.
 Good governance for us & all around us.
 Products & Services

Fire Insurance MOTOR Insurance

Industrial All Risks Insurance Increased Liability Insurance

Hotel Owners All Risks Act Only Liability Insurance
Insurance Comprehensive Insurance
Household Insurance
Consequential Loss Due to
Fire Insurance
Fire and Allied Perils
Insurance
 Products & Services

ENGINEERING Related Insurance MARINE Insurance

Deterioration of Stock Marine Hull Insurance

Insurance (DOS) Marine Cargo Insurance
Electronic Equipment
Insurance (EEI)
Machinery Loss of profit
Insurance (BI MB)
Machinery Insurance (MB)
Erection All Risks Insurance
(EAR)
Contractors Plant & Machinery
Insurance (CPM)
Contractors All Risks Insurance
(CAR)
 Products & Services

Miscellaneous
 Hole in One Golf Tournament Insurance
 Fidelity Guarantee Insurance
 Cellular Mobile Phone Insurance
 Personal Accident Insurance
 Directors and Officers Liability Insurance
 Professional Indemnity Insurance
 Products Liability Insurance
 Money / cash in Transit Insurance
 Cash / Property in Premises

Shareholding Structure
Shareholding pattern of PIEL
Sponsor Institutions General Public
15%

16%

68%
Organizational Hierarchy
Board of Directors

Managing Director and CEO

Deputy Managing Director
Consultant Additional Managing Director
and CFO

Reinsurance and
Marketing Special Underwriting
Finance and Accounts

Admin Claims settlement MIS

HR
The Underwriting Process of PICL

• Establishing an Application File

• Medical examinations
• Inspection reports
• Underwriting in the field
Operational Description and analysis

• Reinsurance
• Claim Settlement
• Underwriting Quality and Expertise
• Retention Capacity
• Investment portfolio
SWOT analysis of PICL
Strength:

• Strong corporate Management

• Maintain strong network through the country.

• PIC has strength to attract actual and potential Customer’s to sustain in the
challenging and competitive market.

• Enough financial strength or own financial capability of the company

Weakness:

• Centralized decision making.

• Conflict in about power of authority among directors.

• Poor co-ordination and communication among different

departments.

• Marketing Officer are not educated enough about Insurance law.

Opportunities:

• Home country constraints are becoming flexible as

because of govt. are now very much aware to this sector
advantages and disadvantages.

• Target market is increasing at a higher rate on competitor’s

products

• Rapid growth of business function and chancing the current

market.
Threats:

• The market is very competitive

• Commission offered by competitors is some cases low

• Employee dissatisfactions for the current position in the

company.
 Performance Analysis
of
“Pioneer Insurance Company Limited”
 GROSS PREMIUM & NET PREMIUM
2000
1874.91
1800
1701.27
1589.61
1600

1400
1252.37
1200

1000 Gross premium

876.03 895.45
Net premium
792.48
800 718.48

600 531.31

393.36
400

200

0
2013 2012 2011 2010 2008

Interpretation: There is an upward trend in Gross premium & Net premium which is good for
the company.
 GROSS PREMIUM (SEGMENT WISE)
900
804.14
800

700
647.929999999999

600

500

Gross premium(segment wise)

400

300
230.57
190.27
200

100

0
Fire Marine Motor Misc

Interpretation: Pioneer insurance company receive a huge gross premium from fire
insurance.
NET PREMIUM & UNDERWRITING RESULT
1000

900 876.03

792.48
800
718.51
700 Net Premium Underwriting result

600
531.3
500
393.35
400

300 255.02
216.57
200
123.61
100 61.95 73.99

0
2013 2012 2011 2010 2009

Interpretation: There is an upward trend in Net premium and difference between net
premium and underwriting result is high.
 NET PROFIT & INVESTMENT INCOME
350

297.84
300
277.17

250

204.52
200 Net Profit

Investment Income
150
130.3
123.22 117.58
109.18
95.02 98.29
100

48.82
50

0
2013 2012 2011 2010 2009

Interpretation: There is an upward trend in Net profit which is a positive sign.

 ASSETS & CURRENT LIABILITIES
2,500.00
2,026.70
2,000.00
1,772.58
1,521.66
1,500.00
Assets
1,000.00 836.58 715.27000 998.04 Current Liabilities
761.33 811.02
0000001
510.54 471.31
500.00

0.00
2013 2012 2011 2010 2009

Interpretation: There is an upward trend in company’s asset. Asset is much higher than
current liabilities which is a positive sign.
 INVESTMENT & TOTAL ASSETS
2,500.00

2,026.70
2,000.00
1,772.58

1,521.66
1,500.00

1,154.23 1,181.24 Investment

Assets
998.04
1,000.00 904.98
811.02

531.85
483.52
500.00

0.00
2013 2012 2011 2010 2009

Interpretation: There is an upward trend in company’s asset and investment which is a

positive sign
 RESERVE & PAID UP CAPITAL
700

622
600

513.81
500
424.419999999999
400 390.51
353.44
Reserve
Paid up Capital
300 271.88 268.51

200 187.5
158.21 150

100

0
2013 2012 2011 2010 2009

Interpretation: There is an upward trend in company’s reserve which indicate the strengths
of the company.
 GROSS CLAIM (CLASS WISE)
300

250

200

Fire
150 Marine
Motor
Misc.
100

50

0
2013 2012 2011 2010 2009

Interpretation: It shows that pioneer insurance company settles a substantial number of

claims every year.
 PROFIT DISTRIBUTION
Profit Distribution
84.83

127.23

Dividend

Provisions for tax

Balance after distribution

Reserve for exceptional loss

62.43

85

Interpretation: Pioneer insurance company distributes a large portion of its profit as dividend
which is a good sign for investors.
 Ratio Analysis of PICL

Current Ratio

Quick Ratio

Cash Ratio

Working Capital Ratio

Return on Equity Ratio

Return on Capital Employed Ratio

Return on Assets Ratio

Debt-Equity Ratio

Capitalization Ratio

Operating Cash Flow Ratio

Name Formula Amount Ratio Comment

Current Ratio Current 1,614,728,611/ 3.67:1 The standard

Assets/Current 439,890,668 value is 1:1.So it
Liabilities is a good sign
for the company.
Quick Ratio Cash & 814,342,750+4 2.83:1 Quite
Equivalents+Accou 32,546,564/43 Satisfactory
nts 9,890,668 because the
Receivable/Current company has
Liabilities enough current
assets.

Cash Ratio Cash & 814,342,750/4 1.85:1 The standard

Equivalents/Curren 39,890,668 value is 1:1.So
t Liabilities the company is
in better
position.
Working Capital Working 1,174,837943/ 2.67:1 Satisfactory.
Ratio Capital/Current 439,890,668
Liabilities
Name Formula Amount Ratio Comment

Return on Net Income/Average 127,085,760/3 32.69% The company

Equity Ratio Shareholders’ Equity 88,781,250 x needs to
x 100 100 improve this
ratio.

Return on Net Income/Capital 127,085,760/8 15.26% Other

Capital Employed x 100 32,728,705 x Insurance
Employed Ratio 100 Company’s
return is
higher.So
needs to
improve.
Return on Net Income/Average 127,085,760/1, 7.74% This ratio
Assets Ratio Total Assets x 100 642,833,763 x needs to be
100 improved.
Name Formula Amount Ratio Comment

Debt-Equity Total 1,706,971,434/ 1.34:1 The amount of

Ratio Liability/Shareh 1,274,793,887 debt needs to
olders’ Equity be decreased.

Capitalization Long Term 345,732,502/34 21.33% It will be better

Ratio Debt/Long Term 5,732,502+1,2 for the
Debt+Sharehol 74,793,887 x company if this
ders’ Equity x 100 ratio can be
100 increased.
Operating Cash Operating Cash 77,395,047/651 11.87% Quite
Flow Ratio Flow/Revenue x ,750,671 x 100 satisfactory.
100 The company
has enough
operating cash
flow.
Recommendations

• PICL can introduce more subsidiary companies like Pioneer

Securities and Capital limited.
• PICL can arrange seminars for the public and as well as for
the employees so that the employees can get a proper
knowledge how to deal with customer and how to increase
their network and facility.
• PICL should increase their online facility. By this it can give
and take facilities by setting in the desk.
• PICL should improve its technological facilities and it
should reduce its paper pencil works.
• “Employee Recruitment Process”- should be done in a fare
process so that appropriate and talented employees are selected
through the recruitment process and increase the productivity
and quality of the service.
• The most important thing that has come to my mind concerning
their promotional activities is that they should go for print or
broad cast media for advertisement to make their customer
aware about their range of services and make the strong place in
the customers‟ mind.
• They should increase the number of Branches in all over the
country with the permission of IDRA (Insurance Development
and Regulatory Authority). Thus, the clients in every city can
enjoy their insurance facility from their own city.
Conclusion

• the competition is increasing day by day between the insurance

companies
• PICL need to develop their some productive sectors. At present, a
company cannot establish properly without developing
information technology.
• The progress of insurance business depends on the progress of
economic condition .Insurance business also faces many problem.
So if we develop economic condition as well as overcome the
problems, it will help a lot to flourish this business in our country.
• So, PICL should focus on those issues to develop its growth and
faith from its customers. Pioneer is proud to be a company that
helps people in time of trouble.
Annual Reports
• Annual Report of Pioneer Insurance Company Limited 2009,
2010, 2011, 2012, 2013
Websites
• http://www.pioneerinsurance.com.bd/
• http://www.inc.com/encyclopedia/financial-ratios.html
• http://www.investinganswers.com
• http://www.investopedia.com
• http://www.wikipedia.com
 Several books, journal and research paper regarding insurance
operations.
Any Question?