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Executive Summary

Dhaka Insurance Co. Ltd. is a renowned business company in the insurance arena of
Bangladesh which has been established about twelve years back. It was then named as The
Loyeds Insurance Limited. The name was changed to Dhaka Insurance Limited in the year 2006.
The company was built to perform all kinds of general insurance activities under company act
1994. The company is now operating its business throughout the country with eighteen of its
branches in four divisions.
The financial highlights of the company inform that the company was not so fast growing
insurance firm before 2009. But throughout the last two years, the company is experiencing a
great growth in its business field.
Compared to the earlier years the company now has better management system, better client
service and better goodwill in the clients of the organization. Besides, the company has now
greater risk analyzing policy that helps the company to measure the premium properly. It helps
the company to attain greater profitability. The greatest growing sector of the organization is the
underwriting job.
Other than insurance business the company is now also engaged in secondary share business.
The lion share of the previous two-year profit of the company is the contribution of investment
profit from capital market. Moreover, the companys insurance sector is now showing better
performance than the earlier time. Some selective underwriting and prompt settlement of claims
have contributed towards building up a very respectable image of the Company within related
the business community.
Since its establishment in 2000, the company is performing its business with great skill which
has made the company one of the leading insurance companies in Bangladesh. Within such short
life span of only eleven years the company has been able to achieve the trustworthiness and fame
in the insurance industry of Bangladesh. In Bangladesh insurance business is a very challenging
sector as people of this country is not so much interested in insurance. Moreover, political
condition, natural risks, unawareness of people etc. have made the insurance business more
complicated in this country. Still Dhaka Insurance Co. Ltd. has been able to create its business
image in its business community overcoming all hinders.
The Background of the Company:
Dhaka Insurance Co. Ltd. was incorporated as a public limited company in Bangladesh on 4 th
January, 2000 under the Company Act, 1994 for carrying insurance business other than life
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insurance. This company started with 5 sections in February, 2000. The company went into
Initial Public Offering (IOP) in 2009. The initial paid up
capital of the company was BDT 60 million which has
been increased by BDT 150 million when the company had
entered into the Security Exchange and Commission (SEC)
list to meet the rapid growing insurance industry in
Bangladesh. In the year 2009 the company was enlisted to
raise an amount of BDT 108 million in exchange of 0.9
million ordinary shares to the ordinary people. At the end
of June 2011 the paid-up capital has been again increased
to BDT 300 million. Now this company operates its
business with a country wide network through eighteen
branches.
The current situation of the company: Dhaka Insurance
Ltd. has experienced a successful business year by the right
directions of the directors and dexterous direction of
management authorities. Now its being recognized as one
of the most developing as well as establishing insurance
companies in the insurance business. The directors and the
management authorities are working very hard to establish
it as first rowed insurance company. Experienced
management, good customer care, fast settlement of
insurance demands, and achieving trusts of customers-we
believe

these

are

ways

of

companys

success.

MANAGEMENT OF THE COMPANY


Insurance businesses are the service providing business.
These businesses are directly controlled by certain
authority within the frame of countrys Act and regulations.
Dhaka Insurance Co. Ltd. has been inaugurated
following The Company Act, 1994 and its whole business
activities are performed under Insurance development

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and regulatory authority (IDRA). The company agrees to compensate loss of insured property
with each policy terms in consideration of premium. In this case the higher the risk of damage
associated with the property, the more the premium will be.
The Management Team: The managing director of this company is the chief executive of the
company and management runs under his direct control. He is accountable to the board of
directors of the company. The company has a skilled management team consisting CFO,
Company secretary, Head of Underwriting, claims and re-insurance assists managing director
and supervises the day to day departmental works. The organizational chart of the company is
Organizational Chart of Dhaka Insurance
given here.
Ltd
The Agent Team: The executives and officers of development wings are those who are directly
related to contact with clients for procurement of business who are the vital part of the company.
They offer service to the policy holders directly and management supports them through quick
settlement of the claim. This team is the communication medium between the company and the
clients. Besides using their given information the company is continuously changing its
insurance policies.
The Investigation Team: They have to use their own investigation team in case of the damage
to the insured properties by the company. This team finds out the damage and takes preparation
for the required compensation.
Human Resource Management: This company follows a standard forms to recruit employees.
There is no priority of the dictation of the top level executives. The Management of this company
used to encourage its employees awarding each bonus, special increment and promotion based
on their personal performance. Moreover some selected personnel of the company monitor the
activities of the employees and arrange professional training for improvement of the employees.

SWOT Analysis:
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Strength
Good solvency
Good financial performance
Experienced management team
Improved underwriting leverage

Opportunities
Expansion of branch network
Online policy sale
Product diversification

Weaknesses
Low capital base
Exposed to equity market risk
IT infrastructure at primary stage
Small market share
Management expenses beyond
allowable limit.
Threats
Too many companies in small market
Emergence of foreign companies
ICT service in all operations
Compliance of new insurance.

KEY FINANCIAL TERMS:


The Financial Statements have been prepared in accordance with Bangladesh Accounting
Standard (BAS). It has shown true and fair value of the company as of 31st December 2010.
The operations and the cash flow statements have been prepared for the year ended and obeying
the Companies Act, 1994, the Insurance Rules in 1958, the Securities and Exchange Rules,
1987.
Basis of Preparation of Accounts & Significant Policies:

1. Basis of Preparation: The Accounts have been prepared following the historical cost
convention. Figures have been rounded off to the nearest Taka. Transactions made under foreign
currency have been transferred to Bangladeshi Taka.
2. Significant Accounting Policies:
a) Depreciation of fixed assets: It has been calculated in accordance of the diminishing
balance method at the rate of between 10%-20% depending on the useful life.
b) Valuation of Assets: It has been set at their respective book value as at 31st December 2010.
c) Going Concern Concept: As the company is optimistic to continue the business, the
financial statements of the entity have been prepared under going concern concept.
d) Insurance Scheme: Employees of the company are covered under the group term life
insurance scheme.

3. Investment (At Cost): Taka 9,000,000


The amount above represents the companys investment in the past ten years BGTBs, held
as a statutory deposit under the Insurance Act, 1938 in Bangladesh Bank. Interest accrued on the
Investment has been accounted for.

Financial Highlights
Two years key operating and financial data of the Company Taka in million
Sl. No.

Particulars

2010

2009

01

Gross Premium

155.62

129.01

02

Income from Investment

191.74

76.69

03

Net Claim Paid

16.72

14.96

04

Net Profit before Tax

191.28

96.94

05

Paid-Up Capital

150.00

60.00

06

Shareholders Equity

439.90

167.62

07

Total Reserve Fund

113.57

104.00

08

Total Investments

532.14

356.73

09

Total Assets

768.46

5949.33

10

Rate Of Dividend

100% (Stock)

15% (Cash)

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Earnings per Share

109.52

143.92

12

Net Assets Value per Share

293.26

316.86

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st DECEMBER 2010
Particulars

Taka 2010

Taka 2009

Net Cash Flow From Operating Activities

164,172,822

58,225,244

Net Cash Used In Investing Activities

-103,072,521

-2,979,862

Net Cash Flow From Financial Activities

-5,422,940,737

-5,516,646,000

Net Increase In Cash and Bank Balance

-5,361,840,436

5,571,891,382

Cash and bank balance at beginning of the year

5,726,474,403

154,583,021

364,633,967

5,726,474,403

Cash and bank balance at end of the year

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st DECEMBER 2010
Particulars

Taka 2010

Taka 2009

Interest, Dividends And Rents

27,345,907

12,594,521

Profit/(Loss) Transferred

6,152,860

24,974,655

164,400,785

64,102,294

-6,619,249

-4,722,138

191,280,303

96,949,332

Other Income
EXPENSES OF MANAGEMENT
Balance for the year carried forward to appropriation account

PROFIT AND LOSS APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31st
DECEMBER 2010
Particulars

Taka 2010

Taka 2009

Transfer from Reserves and Taxation

36,573,058

96,108,510

Balance Transferred to Balance Sheet

158,322,690

3,615,445

194,895,748

99,273

191,280,303

96,949,332

3,615,445

2,774,623

194,895,748

99,723,955

Balance transferred from profit and loss account


Balance brought forward from previous year
Total

BALANCE SHEET AS AT 31st DECEMBER 2010

CAPITAL AND LIABILITIES

Taka 2010

Taka 2009
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Authorized Capital
2,000,000 Ordinary Shares Of Tk100 Each

200,000,000

200,000,000

Issued, subscribed and paid up capital

168,000,000

60,000,000

Reserve or contingency accounts

113,572,884

103,999,826

Profit and loss appropriation account

158,322,690

3,615,445

Balances of funds and accounts

41,487,663

32,494,755

Premium deposits

63,237,582

34,428,480

Estimated liability in respect of outstanding claims whether


due or intimated
Amounts due to other persons or bodies carrying on insurance
business

95,517,825

86,731,470

49,968,974

44,008,796

Provision for taxation

54,600,000

27,600,000

22,500,000

Sundry creditors

23,754,413

5,534,153,418

TOTAL

768,462,031

5,949,532,190

173,461,991

162,857,558

Interests, dividends, and rent outstanding

5,457,156

5,874,267

Amounts due from other persons or bodies carrying on


insurance business

6,916,050

4,086,020

Sundry debtors

85,507,359

33,847,851

Cash and bank balances

364,976,999

5,726,710,040

Other accounts

132,142,476

16,156,454

TOTAL

768,462,031

5,949,532,190

Proposed dividend

PROPERTY AND ASSETS


Investments at cost

THE MARKETING STARTEGIES AND TECHNIQUES OF THE COMPANY:


To be competitive in the market, insurance companies need to develop new products and offer
excellent clientele services and also to expand the market by bringing more and more items
under the purview of insurance otherwise the competitors may take away existing companys
business. Insurance business is increasing globally. New items are coming under the cover of
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various insurances as days pass by; the market is expanding as people are realizing the
importance of insurance. Dhaka Insurance Co. LTD provides excellent services and plan to
introduce new products giving importance on Research and Development (R&D) considering
market & technology related risks.
Dhaka Insurance LTD has been operating in a small market competing with as many as fortythree general insurance companies including Green Delta Insurance Company LTD, Reliance
Insurance Company LTD., Progoty Insurance Company LTD, Peoples Insurance Company LTD,
Pioneer Insurance Company LTD, Rupaly Insurance Company LTD, Federal Insurance Company
LTD, Prime Insurance Company LTD. So to stay in the market, we are following some
marketing strategies.

1. ADVERTISING:
Its important to attract the customers to the company. In order to that the company
is taking some steps to make the company more popular and known to all, like
Seminars: In order to introduce the company to others, sometimes by arranging
seminars. The company also invites some companies to show them that why they should
come to us. There the company also introduces the new plan and product to them to gain
more interest.
Media: The company is using media as a power. It has prepared different tips of add
through television to influence others to come to the company. Sometimes it sponsors
different programs to spread the name of the company through TV shows.
Fair: At the end of every year, a corporate fair takes place in very popular places for

example in Bangladesh Trade Fair. The company intends to set stalls there and introduce
others the offers.

2. Customers:
Complete satisfaction of the customers is the first priority of the company. Its
offering a friendly environment to and proper service all of the clients. It is important to
earn the customers trust. As most of the customers are from spinning industry, garments,
textiles industry, oil industry, shipping etc. it makes sure that they get what they want and
what they expect from the company. It tries to make sure that it keeps its words. The
company makes everything articulate to the customers, so that they dont have any
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questions about the company. Thats to make a good impression to the present and future
customers.
3. Shareholders:
Shareholders are one of the important parts of the company. At first, the company has
to make sure that the rate of the stock exchange remains profitable, so that more people
feel interest to buy the shares. In order to get more shareholders the company takes some
steps which we are following last from the beginning of our company.
Profit: The company gains profits by using money of the clients in various sectors in
order to make benefit out of it. As the profit is gained from it, the company divides them
among the shareholders according to their lots and keeps only 5% to 6% of the profit for
its company.
Annual General Meeting (AGM): It is the annual meetings that take place at the end
of the every working year. There, it shows the annual financial report including the last
profit and revenue it made and give the interested share buyers as much as information
they want so that they can decide whether they are going to buy our share or not.

Conclusion
Dhaka Insurance Company Ltd., a partly private and public company, has been a
successful company over the years. On the basis of its increasing gross premium, income
from investment etc., and proper management, its expecting to uphold its position and
market share in the market. Despite of its risks and flaws, the company, along with the
rules and regulations of the company policy, would be able to provide services to the
clients whenever necessary.
References:
1. A.Q.M Wazed Ali, Managing Director, Dhaka Insurance Co. Ltd.,
Md. Abul islam, Deputy Managing Director, Dhaka Insurance Company.
2. http://marketpublishers.com/report/business_finance_insurance/insurance/dhaka_insurance_li
mited_swot_analysis_bac.html
3. http://dhakainsurance.com/financial-report/

4.

http://pdf.marketpublishers.com/721/dhaka_insurance_limited_swot_analysis_bac.pdf

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