Internship Report On: Financial Analysis of Delta Life Insurance Company LTD

Internship Report
On
Financial Analysis of Delta Life Insurance Company Ltd.
Supervised By
Mr. Mrinal Kanti Paul
Assistant Professor
School of Business
Prepared By
Manas Saha
ID: 11.01.02.102
BBA Program
Major in Finance
Date of Submission: 10/09/2015

Letter of Transmittal
10 September, 2015
Mr. Mrinal Kanti Paul
Assistant Professor
Ahsanullah University of Science and Technology
Subject: Letter of Transmittal
Sir,
I have much pleasure to submit herewith a copy of Internship report on Financial Analysis of
Delta Life Insurance Company Ltd. I would like to express my sincere gratitude to you for your
support and encouragement.
I have done my internship in Delta Life Insurance Company Ltd. during three months attachment
period. The report focuses on the financial analysis of Delta Life Insurance Company Ltd.
This report has been submitted in partial fulfillment of the requirements for the degree of
Bachelor of Business Administration (BBA), Major in Finance, School of Business. I hope the
report meets your expectation. I will be glad to answer any queries regarding the study and
report.
Thanking You
Sincerely,
Manas Saha
ID: 11.01.02.102
BBA Program
School of Business
Letter of Endorsement
The Internship Report entitled Financial Analysis of Delta Life Insurance Company Ltd. has
been submitted in partial fulfillment of the requirements for the degree of Bachelor of Business
Administration (BBA), Major in Finance, School of Business on 10th September 2015 By Manas
Saha, ID# 11.01.02.102. The report has been accepted and may be presented to the Internship
Defense Committee for evaluation.
Mrinal Kanti Paul
Internship Supervisor
Assistant Professor
School of Business
Ahsanullah University of Science and Technology

Acknowledgement
I would like to thank all who support me to complete my internship report. I also want to thank
all the people who have given their support and assistance and extremely grateful to all of them
for the completion of the report successfully. Ahsanullah University of Science and Technology
and Delta Life Insurance Company Ltd. both provided me with enormous support and guidance
for my report to be completed successfully.
I would also like to thank my internship supervisor Mr. Mrinal Kanti Paul, Assistant Professor,
School of Business, for his kind concern, valuable time, advice and constant guideline in
preparing the report.
I would like to thank Dipak sir, incharge, Cell-1, for their support in preparing the internship
report & providing me relevant information for the report. I would like to express my foremost
gratitude to other officials of Delta Life Insurance Company Ltd. who helped me and gave me
their valuable time, providing me with the most relevant information on the basis of which I have
prepared this report.
I would like to thank Harun-or-Rashid, AVP, Development, who providing me relevant

information for the report, annual report and deep idea about insurance sector.
I would like to thank Azim sir, Mamun sir, Asma mam, Sraboni mam, joli mam who gave me
specific knowledge about department work.
Executive Summary
The development of a country depends up on the consolidate development of all infrastructures

like-agricultural sector, industrial sector, financial sector, technological sector etc. But
developing all these structures is not easy. The most difficult problem is financial risk. So if it is
feasible to provide financial protection then most of the structural development will be
achievable with minimal efforts. And the most well-known practical method for handling
financial risk is insurance. Delta Life Insurance Company Limited was incorporated in
November 10, 1986 and is mainly engaged in Ordinary Life (OL), Group Insurance (GI), Health
Insurance (HI) business and non-traditional micro insurance business under the name of Gono-
Grameen Bima (GN-GRB). The Company is a publicly traded Company and its shares are listed
on the Dhaka Stock Exchange and Chittagong Stock Exchange. However, I have prepared this
report on Delta Life Insurance Co. Ltd, which is one of the growing and prospective insurance
companies in the insurance industry. The company is providing protection and financial security
to the nation, whilst adding shareholders value thought customer service excellence. By the way
of examining and evaluation the functions and performance of Delta Life Insurance Co. Ltd, I
tried to illustrate a true scenario of insurance industry of Bangladesh. The most important part of
this report is the findings and analysis that means what I have found out throughout my study.
My report topic is Financial Analysis of Delta Life Insurance Company Ltd. So, we get an
accurate realization about Delta Life Insurance Co. Ltd. I also made an effort to present some
Suggestions for the better interest of the company. Basically, the major problems and facilities
are similar for all insurance company as they are dealing with services. The difference can be
made in one way, which is how well they are maintained their Accounts and dealing with their
customer and most probably how efficiently and effectively they are operating their business.
Delta Life Insurance Company business started with the creation of product or service and ended
with the attempt to sell it. Delta 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. Delta Life can take pride in molding the saving habits of the lower
and middle class people and transforming them into prospective policyholders. The potential is
now so strongly perceived that all life insurance companies old and new alike operating in
the country have started their own micro insurance products.
Table of Content
1. Introduction........................................................................................................................1
1.1 Origin of the report........................................................................................................2
1.2 Objective of the Study...................................................................................................2
1.3 Scope of the study..........................................................................................................3
1.4 Methodology..................................................................................................................2
1.4.1 Sources of Data.....................................................................................................3
1.4.1.1 Primary Sources........................................................................................3
1.4.1.2 Secondary Sources....................................................................................3
1.5 Data Processing and Analysis........................................................................................3
1.6 Limitations.....................................................................................................................4
2. Company Overview...........................................................................................................5
2.1 Company History...........................................................................................................6
2.1.1 Industry Overview................................................................................................7
2.1.2 Vision....................................................................................................................8
2.1.3 Goal.......................................................................................................................8
2.1.4 Values: TRUEST..................................................................................................8
2.2 Background of the Delta Life Insurance Company.......................................................9
2.3 Ordinary Life Insurance................................................................................................7
2.3.1 Popular Plans of Ordinary Life Insurance............................ ............................10
2.3.2 Policy Conditions...............................................................................................12

2.4 Gono Grameen Bima................................................................. .................................14
2.4.1 Target Group and the Product............................................................................14
2.4.2 Policy Documents..............................................................................................14
2.4.3 Micro Investment (Loan)...................................................................................15
2.5 Group Life Insurance..................................................................................................16
2.5.1 Traditional Scheme............................................................................................13
2.5.1.1 Short Term Contract...............................................................................17
2.5.1.2 Long Term Contract..............................................................................17
2.5 Health Insurance.........................................................................................................20
3. Tasks and Activities.........................................................................................................22
3.1 Tasks and Activities.....................................................................................................23
3.2 Cell-1...........................................................................................................................23
3.2.1 Underwriting (U/W) Department........................................................................23
3.2.2 Commission Department.....................................................................................24
3.2.3 Accounts Department...........................................................................................24
3.2.4 IT Department......................................................................................................25
3.2.5 Policy Department................................................................................................26
3.3 Service Center..............................................................................................................26
3.3.1 Claims department..............................................................................................26
3.3.2 Alteration department.........................................................................................26

4. Financian Statement Analysis ..................27
4.1 Ratio Analysis....27
4.1.1 Liquidity Ratios.....28
4.1.2 Leverage Ratios.........31
4.1.3 Profitability Ratios.... 36
4.1.4 Activity Ratios.......40
4.1.5 Market Ratios... 41
4.2 Common Size Analysis.44
4.2.1 Horizontal Analysis....44
4.2.2 Vertical Analysis....54
4.2.3 Trend Analysis....58
4.3 Summary....60
5. Findings and Recommendations...................................................................................61
5.1 Findings......62
5.2 Recommendations..........60
5.3 Conclusions..........63
6. Bibliography
Appendix
Chapter-1
Introduction
1
1.1 Origin of the Report:
This is an internship report prepared as a requirement for the completion of the BBA Program
from the School of Business, Ahsanullah University of Science and Technology. The primary
goal of internship is to provide a primary corporate exposure to the student and an opportunity to
translate the theoretical conceptions in real life situation. The internship program covers a period
of three months of organizational attachment. For a successful accomplishment of BBA program,
I, Manas Saha of Bachelor of Business Administration was placed in Delta Life Insurance
Company Ltd., Doinik Bangla, for the internship program under the guidance of Mrinal Kanti
Paul, Assistant Professor of Ahsanullah University of Science and Technology. The duration of
my organizational attachment is three months, starting from June 2015. As a requirement for the
completion of the program I am required to submit this report, which would include an overview
of the organization, as well as particular functional department I am attached with and
elaboration of the responsibility, observation I have during the internship period.
1.2 Objective of the Study:
The objective of this study is to provide insight into how the insurance company works, what are
the strengths and weakness of the company. The ratios will be compared of both the company
within the industry to see where the company stands. To give the stock holder a clear view about
the financial feasibility of both the banks so that they can take the appropriate decision. And
most significantly it will provide a good understanding of the business cycle and the yield curve -
both of which have a major impact on the economic performance of the company.
The main objectives of the study are-
To observe the daily activities of Delta Life Insurance Company Ltd.;

To assess the financial performance of Delta Life Insurance Company Ltd. based on ratio
analysis;
To find out the financial trends of Delta Life Insurance Company Ltd.;
To suggest some policy measures to enhance the organizational performance of Delta
Life Insurance Company Ltd.
2
1.3 Scope of the Study:
Since, the chosen topic of this internship report is Financial Analysis of Delta Life Insurance
Company Ltd, the scope of this report is to analyze the financial analysis.
1.4 Methodology:
This is a descriptive and analytical report. Ratio analysis are the main components to analyze the
financial performance.
1.4.1 Sources of Data:
1.4.1.1 Primary Sources:
Major sources of primary information were interviews with members of the staff of Delta Life
Insurance Company Ltd.
Observation of total service operation.
1.4.1.2 Secondary Sources:
Internal Sources
Delta Life Insurance Company Ltd. Annual Report

Group Business Principal manual
External Sources
Different books and periodicals related to the insurance sector

IDRAs Annual Report
Website information
1.5 Data Processing and Analysis:
The informative portion of this report is based on the primary data such as personal observations
and interviews with members of staff of Delta Life Insurance Company Ltd and secondary data
collected from internal sources. The analytical portion of this report is the outcome of numerous
numerical data collected mainly from the external secondary source. Prior to analysis, data
3
collected form financial & ratio analysis of Delta Life Insurance Company Ltd the above
mentioned sources were classified further for making them suitable for analysis. In order to get
appropriate, accurate and quick result the use of MS Excel was advantageous.
1.6 Limitations:
This report might be limited with some constraints. Performance measurement and assessment of
the contribution of a particular department of a company to the economy is a very difficult task
and there is no universally accepted methodology for this. Details of many aspects of the services
of Delta Life Insurance Company Ltd have been skipped in this report due to various constraints,
including time and space. Moreover, one of the main barriers in writing this report was the
confidentiality of data.
4
Chapter-2
Company Overview
5
2.1 Company History:
Delta Life Insurance Company Ltd. established mainly through the initiative of a group of
Bangladeshi professionals then working abroad along with a few enthusiastic local
entrepreneurs, started its operation in December, 1986 after the Government of Bangladesh
allowed the private sector to operate in the insurance sector in 1984 to carry on the business of
insurance in the Private Sector. A brief explanation as to the growth of life insurance business in
Bangladesh is in order here. Bangladesh declared independence from the Pakistani rules on
March 26, 1971 following which she had to witness a bloody liberation struggle with the
occupation forces lasting for 9 months before they were defeated. Insurance business which was
exclusively carried on in private sector before independence was nationalized after liberation in
1972 primarily to address the emerging situation of eroding public confidence in the industry that
was left staggeringly short of resources in the face of huge losses caused by the war of liberation.
After a series of experimentation, a state-owned body, namely Jiban Bima Corporation (JBC),
established in May, 1973 for transacting the life insurance business, took over the assets and
liabilities under life portfolios of all erstwhile private insurance companies and started business
in its own name. However, things did not improve; rather, in many respects became more
exacerbating and the Government then thought it better to allow private sector participation in
insurance business.
Since inception, Delta Life set before itself a high standard of all round performance coextensive
with professional soundness and proficiency. It soon made a mark in the life insurance arena by
not only being the leader among the private sector indigenous companies, but by undertaking and
successfully implementing innovative and welfare oriented life insurance schemes. It introduced
an array of conventional life and group insurance products - many of which were the first in
Bangladesh. For the first time, health insurance products were also introduced by Delta Life. But
more importantly, in fulfillment of the avowed commitment towards social development, Delta
Life for the first time not only in Bangladesh but probably in the World, devised and introduced
micro-life insurance-cum-savings products especially suited to the needs and pockets of poor
people of the country who constitute more than 80% of the people of Bangladesh.
Two projects of the company namely Grameen Bima for the rural people and Gono Bima for the
poor and marginal savers of the urban areas were initiated to devote themselves exclusively to
6
marketing and management of these innovative products. We are happy to report that we have
achieved a good measure of success although there is a long way to go. These schemes that we
have introduced have created great stir and enthusiasm among the general mass who, before
these projects started functioning, could not even dream of owning a policy that provides the
much needed life insurance coverage along with facility of regular savings on a long-term basis.
At a later stage i.e. in the year 2002, the projects were merged into a division of Delta Life,
namely, Gono Grameen Bima Division.
Delta Life can take pride in molding the saving habits of the lower and middle class people and
transforming them into prospective policyholders. The potential is now so strongly perceived
that all life insurance companies - old and new alike - operating in the country have started their
own micro insurance products.
2.1.1 Industry Overview:
A brief explanation as to the growth of life insurance business in Bangladesh is in order here.
Bangladesh declared independence from the Pakistani rules on March 26, 1971 following which
she had to witness a bloody liberation struggle with the occupation forces lasting for 9 months
before they were defeated. Insurance business which was exclusively carried on in private sector
before independence was nationalized after liberation in 1972 primarily to address the emerging
situation of eroding public confidence in the industry that was left staggeringly short of resources
in the face of huge losses caused by the war of liberation. After a series of experimentation, a
state-owned body, namely Jiban Bima Corporation (JBC), established in May, 1973 for
transacting the life insurance business, took over the assets and liabilities under life portfolios of
all erstwhile private insurance companies and started business in its own name.
However, things did not improve; rather, in many respects became more exacerbating and the
Government then thought it better to allow private sector participation in insurance business.
Since inception, Delta Life set before itself a high standard of all round performance coextensive
with professional soundness and proficiency.
7
2.1.2 Vision:
We will be the premier life Insurance Company in Bangladesh.

We will serve our customers with respects and will provide the best solution of their
needs.
We will be a Company with qualified professional who will work together as a team and
serve with dignity and the highest level of integrity. We believe an excellence and
customers with service beyond their expectations.
Adding value will be the operative words of our organization.
2.1.3 Goal:
Provide financial security to our customers with insurance policies that are most suitable
for them
Make life insurance an easy saving instrument and a profitable one with attractive bonus
and improved customer service
Collect small savings from the people of our country and invest the accumulated savings
in profitable nation building enterprises.
2.1.4 Values: TRUEST
Teamwork
Respect for all people
Unquestionable integrity
Excellence inverting we do
Speed in servicing
Truthfulness
8
2.2 Background of the Delta Life Insurance Company Limited At a glance:
10 November 1986 Year of establishment of the company
17 February 1986 Signing of First Policy
February 1988 Launching of Grameen Bima
8 October 1993 Launching of Gono Bima
7 February 1994 Inauguration of Delta Care Hospital Plan
13 September 1995 Listed in Dhaka Stock Exchange
6 December 1995 Listed in Chittagong Stock Exchange
March 2001 Membership of Global Network for banking Innovation in
Microfinance
4 January 2003 Merging of Gono and Grameen Bima
30 January 2012 Silver Jubilee of the company
7 July 2013 Incorporation and commencement of Business of DLIC
Securities
2.3 Ordinary Life Insurance:
Delta Life offers a wide variety of ordinary life product/plans ranging from the most common
endowment type to more modern and sophisticated plans like endowment with open term,
pension plan with built in provision for increasing pension, increasing protection with provision
for premium refund etc. The plans have been designed keeping in view the diverse and
multifaceted needs of the insuring public belonging to different strata of the society. Some of the
popular plans are briefly described below.
9
2.3.1 Popular Plans of Ordinary Life Insurance:
I. Endowment plan with and without profits:
The most common and widely popular, this plan provides for a fixed sum at end of a particular
term or at earlier death of the assured. The plan is available under both options i.e. with profit
and without profit. This is a straightforward coverage allowing a person to plan his future needs
for security and projected savings through means of insurance. Ds for security and projected
savings through means of insurance.
II. One-two-three endowment plan with profits:
This plan provides for high security at earlier death of the assured before expiry of term (10 & 20
years) or the sum assured at expiry of the term. The plan provides for double the sum assured at
premature death due to illness or treble the sum assured if death occurs directly as the result of an
accident along with accrued bonuses till death or maturity as the case may be.
III. Installment payment plans with or without profit:
a) Three payments plan Given for terms like 12, 15, 18, 21 years with or without profits this plan
provides for one fourth of the sum assured upon expiry of each one third of the term and on
death at any time 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.
b) Bi-annual payment plan 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:
Table-1: Instalment plan
Policy Amount of When Payable Sum Assured

Term Installment Payable on Maturity
10 Years 20% Upon expiry of 4th, 6th, 8th years 40%
15 Years 15% Upon expiry of 4th, 6th, 8th, 10th 12th years 25%
10
20 Years 10% Upon expiry of 4th, 6th, 8th, 10th, 12th, 25%
14th, 16th & 18th years
Source: Secondary Data
Notwithstanding the payment of any number of installments, the policyholder remains covered
for full risk and on death occurring before maturity, full sum assured is payable.
* The higher numbered table refers to without profit premium rates.
IV. Premium back term Insurance Plan without Profits:
These are comparatively low cost plans. These plans provide for payment of sum assured in case
of premature death within the term or refund of all premiums paid at end of term. Under Table-
59(A), sum assured keeps on increasing at 8% p.a. on each successive policy anniversary and
such increased sum is paid at death during the term. On survival up to the end of term, all
premium paid during the term is paid. Under Table-65(A) a guaranteed profit equal to 10% of
sum assured is paid along with full premium at end of term as survival benefit. On death before
maturity, the sum assured is payable.
V. Pension Plan:
without profits. Under plan pensions are provided at quarterly intervals 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 for remaining term of 10
years. Before pension starts, if the assured policyholder dies, 10 times the annual pension is paid
as a lump-sum to his nominee and the policy is terminated upon such payment. There is another
plan (Table-72D) that while providing for full protection against premature death as described
above, provides for pension from a designated age as elected by the policyholder at an increasing
rate i.e. pension will increase at 10% at intervals of two years. Payment of pension is guaranteed
for at least ten years and thereafter as long as the pensioner lives.
Both these pension plans provide for waiver of premium in case of permanent and total disability
due to accident before commencement of pension.
11
VI. Child Educational Protection Plan with Profits:
Multiple benefits in the form of scholarships, monthly annuities etc. in addition to sum assured
are available under these plans. Under one plan (Table-11) sum assured or a part thereof is also
payable to the policyholder in case the child dies prematurely.
VII. Tri-dimensional Policy:
Built-in benefits for payment of 50% sum assured immediately if critical illness is diagnosed.
Premium and the sum assured will thereafter be halved and the policy continues. Under this plan,
a spouse may also be covered for major disease benefits.
VIII. Moving Term Plan:
Policies under the plan are initially issued and are to be taken for a minimum term (6 to 10 years)
as elected by policy holder. Any time within this minimum term if death occurs, full sum assured
is payable. At the expiry of the minimum term, the policy may be surrendered for full refund of
premiums paid. However, the policyholder need not terminate his policy at end of the minimum
specified period. The policy will automatically continue till age 65 years of the policyholder
unless he terminates it earlier. The survival benefit comprises of refund of all premiums paid
along with bonuses. In case of premature death the nominee(s) is paid the sum assured plus all
premiums paid till death, or all premiums paid with profit accrued till death whichever is greater.
IX. Single Premium Multiple Security Plan:
It is a single Premium Policy offering multiple security for five years term. It covers natural
death, permanent and partial/total disability and seven major diseases. Premiums are based on
the age of the proposer. This plan perfectly suits the needs of the executive class.
2.3.2 Policy Conditions:
Surrender Value: After payment of two full years' premium, the policy acquires cash surrender
value which is quoted on request unless stated in the policy itself.
12
Loan: At any time after a cash surrender value is available under the policy and while the policy
is in force, the policyholder may obtain, subject to the company's existing rules, a loan on the
policy up to 90% of the cash surrender value.
Age Proof: Age of life assured as declared while applying for the policy has to be authenticated
with an age proof document acceptable to the company. The company reserves the right to
require proof of age of the life assured before paying any claim under the policy if not admitted
earlier.
Settlement Option: Payee may elect to receive the proceeds of the policy in installments instead
of in a single sum, in such a manner as may be agreed upon with the company.
Suicide: Should the life assured commit suicide, whether the assured be then sane or insane,
within two years from the commencement date or from reinstatement of the policy, then the
liability of the company shall be limited to the refund of all premiums paid under the policy less
indebtedness, if any, at the time of such death.
Bonus: Delta Life pays attractive bonuses to its with-profit policies. The present rate of policy
bonuses are as following:
a) A compound reversionary bonus @ 5% of paid up sum assured. This bonus is not paid on the
installments withdrawn (under Table-03, 04) from the date of such withdrawal.
b) A simple reversionary bonus ranging from Tk. 10 to Tk. 15 per thousand sum assured per year
depending on term.
c) A terminal bonus equal to 12% to 15% of sum assured at maturity of policy depending on
terms if the policy would have been in force for at least 4/5th of its term.
Average Rate of Bonus:
On the basis of the three types of bonuses, the Company now pays bonus on Tk. 100,000 Sum
Assured for with-profit endowment products according to the following chart
13
Table-2: Average Rate of Bonus
Term of Policy Total Bonus at Maturity Average Rate per Thousand Sum Assured per year
10 Years Tk. 54,068 Tk. 54.068
15 Years Tk. 84,050 Tk. 56.033
20 Years Tk. 1,18596 Tk. 59.298
The above mentioned rate is not applicable for all products. Please contact your nearest Service
Center for more information on vested bonus for your policy
2.4 Gono Grameen Bima:
Delta Life first launched Micro-insurance product in 1988 through its Grameen Bima Project
(GRB) to cater to the necessity of economic protection against premature death and of disability
as well as providing a way for regular savings for the poor and low income group of people
living in villages. Later it started another project in 1994, namely, Gono Bima (GNB) for the
urban poor and the low income class. These projects are now merged under the name of Gono-
Grameen Bima Project (GN-GRB). The initial problems apart, the project started to yield
impressive results right from the beginning by creating great interest among the target population
who could not even perceive an institutional arrangement through which the ever present
problems of insecurity of life could be addressed. To suit the needs and pockets of the target
people, and for efficient management of these portfolios, some of the age-old traditional
concepts of carrying on life insurance business had to be diluted and in some cases replaced by
simple and straightforward practices. Yet, the results are so encouraging that Delta Life is now
regarded far and wide as the undisputed leader espousing the cause of welfare of teeming
millions and its experiences are now used to advantage not only by indigenous companies but
also other micro-savings organizations abroad.
2.4.1 Target Group and the Product:
In GN-GRB the formalities are minimum. Insurance Cover is given under Group Insurance
concept. A person interested in a policy submits a simple two-page proposal form; it is signed or
thumb imprinted by him or her. There is no need for medical check-up. The person needs to be
14
between 18 and 45 years of age, have a monthly income of Tk. 5,000.00 (US $100.00) or less, be
of good health and supply a Declaration of Good Health (DGH) at the time of submitting the
Proposal form. Death through pregnancy complications within the first year of the policy and
death through suicide in the first year of the policy are not covered under an "exclusion clause".
Simple endowment with profit policies are offered for 10 and 15 years term both with premium
payment mode being weekly or monthly. Premium rate is the same irrespective of age at entry.
Besides this plan, new plans like three-payment plan with 12 and 15 years term and double
protection endowment plan have recently been introduced.
2.4.2 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. There is one group policy document for the policyholders of each
Thana or Block. For individual policyholders the passbook serves as policy document.
2.4.3 Micro Investment (Loan):
GN-GRB gives small project loans to its policyholders on a group liability basis. No collateral is
required. There is 20% service charge on the loans, which is calculated at a flat rate and added to
the principal amount. The loan, together with the service charge, is repayable in 12 equal
monthly instalments. The repayments are collected from door to door by the organizers. Recently
a decision has been taken to establish small collection booths in the villages. A person must be a
policyholder and pay premiums for atleast one year before being eligible for a loan. The
maximum loan given is Tk. 5,000.00 (US $100.00) per policyholder. The loans are for income
generating activities (IGA) only. Policyholders form a committee of 5 to 7 members. 3
policyholders selected by the committee are given the first loan. After recovery of 3 instalments
from each of the first three borrowers, the next 3 are given their loans and so on. As a general
rule, 60% of the premium income of an area and 40% of the repaid loan of an area are available
for loan in that area. Also 100% of premium collection of a committee is available for loan to
that committee.
15
2.5 Group Life Insurance:
Group Insurance is an instrument for providing life insurance coverage (protection) to a number
of individuals under a single contract (policy) who are associated together for a common interest
other than insurance. It is the most cost effective means to provide immediate financial support
to an insured member and/or his family in case of devastating events like-death, disability,
disease as well as retirement. Group Insurance has already established its importance as a
component of "Employee Benefit Package" in Bangladesh. Exclusive features of Group
Insurance are:
Insurance coverage to a number of individuals under a single contract

Simple insurable conditions
Easy administrative procedure
Prompt claim settlement
Affordable premium
Tax exemption on premium
Delta Life offers a host of Group-Life Insurance schemes from which an organization/ employer
may choose for benefits of its members/employees, as may best serve their interest according to
organizational setup.
To be treated as a group, the following criteria need to be fulfilled.
A "Group" Should comprise of at least 15 members

It should be a legitimately organized body
Group clients of Delta Life Insurance Company Limited include:
Semi-Government organization, autonomous bodies
Private, Non-Government Organizations (NGO's)
Educational & Financial Institutions
Public Limited Companies
Associations, Business organizations etc.
Group Life Insurance Schemes offered by Delta Life are of two types:
16
Traditional Schemes: For insurance coverage of members/employees of a Group
Exclusive Schemes: For insurance coverage of clients of Financial Institutions
2.5.1 Traditional Scheme:
These are the commonly offered "Group-Life Insurance" schemes and are also known as Basic
Schemes: These are:
2.5.1.1 Short Term Contract:
Group Term Life Insurance Scheme (GT)

Group Term Life with Premium Refund Scheme (GTR)
2.5.1.2 Long Term Contract
Group Endowment Life Insurance Scheme (GEN)

Group Pension Scheme (GP)
There are several variants of Basic Schemes. Examples of two variants of GTR are
GTR-100/10: Group Term Life with 100% Premium Refund after 10 years
GTR-50/10 : Group Term Life with 50% Premium Refund after 10 years
Salient features of the Basic Schemes:
Group Term Life (GT)

Insurance coverage worldwide round the clock
Contract, Initially for three years and is Renewable
Simple Claim procedure
Prompt claim settlement upon death of an insured
Option to alter sum assured at any time
Exclusion & Inclusion of members under coverage at any time
Premium Rate- comparatively lowest among the basic schemes
Option for supplementary covers to enhance benefit
Profit Sharing options for large groups
17
Group Term Life Insurance with Premium Refund (GTR):

Contract, initially for ten/fifteen years
Reasonable Premium Rate, but higher than GT Scheme
Refund of basic premium (full/partial) on completion of term or retirement
Payment of Surrender Value in case of Policy discontinuation & exclusion
Conversion Privilege to take Individual Life Insurance Policy in lieu
Group Endowment Life Insurance (GEN):

Continuous Contract, unless terminated by either party
Premium rate-age dependent and variable
Payment of sum assured as per contract on retirement
Payment of Surrender Value in case of discontinuation
Conversion Privilege to take Individual Life Insurance Policy in lieu
Group Pension Scheme
Provides for quarterly/yearly pension based on last salary

Continuous Contract, unless terminated by either party
Scope for taking "Death in Service" benefit
Scope of taking "Joint life last survivor pension" benefit
Scope for life pension with/without guaranteed payment period
18
Premium rate- age dependent and variable
Payment of Surrender Value in case of discontinuation
Supplementary Covers:
To provide insurance protection against few devastating conditions other than death, and to
enhance insurance benefit in case of sudden accidental death, several Supplementary Covers are
offered along with basic schemes. Supplementary covers include:
Accidental Death Benefit (ADB): Provides for double sum assured in case of accidental death.
Permanent and Total Disability Benefit (PTD): Provides for full sum assured on happening of
defined risks.
Permanent & Partial Disability Benefit (PPD): Provides for certain percentage of the sum
assured as per schedule on happening of the defined risks.
Dismemberment Benefit (DB): Provides for a certain percentage of Sum Assured as per
schedule on happening of the defined risks. It is only offered with ADB.
Major Disease Benefit (MDB): Provides for 25% or 50% of S.A. upon diagnosis of a few
specific life threatening diseases
Exclusive Schemes:
These are schemes, especially designed for financial institutions, in order to secure their
investment and adorn the product to make it attractive to customers as well as to protect interest
of the client. Few examples are:
Home Loan Insurance: e.g.; Scheme for "Home Loan Borrowers" of Delta Brac Housing
Depositor's Insurance: e.g.; Scheme for "Smart Plant" Depositors of Dhaka Bank Ltd
Premium:
For traditional schemes: Premiums are usually payable annually in advance before
commencement of insurance.
19
For exclusive schemes: A single premium is payable for the whole period of coverage before
commencement of insurance.
**Details about the schemes are provided with "Insurance Proposal"
How to get a Group Life Insurance Proposal?
For Proposal: fill in the Proposal Request Form and send it to us at our contract address
For Quotation: fill in the "Proposal Request Form" and send it to us at our contract address
accompanied by the list of members to be insured with following details
Table-3: Proposal form
S1# Name Designation Date of Birth Sum Assured

*If sum assured depends on salary, mention salary and desired multiple to determine Sum
Assured
Claims are settled to the concerned organization.
2.5 Health Insurance:
Health Insurance is now considered indispensable in developed countries. In the present

financial-social perspective of Bangladesh as well, Health Insurance has now become an
essential, dependable, acceptable and the most cost effective means to make the modern
treatment facilities affordable to all socio-economic classes of people, especially the fixed
income group. As a pioneer of Health Insurance in Bangladesh, Delta Life Insurance Company
offers several Health Insurance Schemes, which are as follows:
Hospitalization (In-patient) treatment coverage plans
Hospitalization Insurance Plan (Group)- offered to Members of a group and their

dependents (if desired)
20
Hospitalization Insurance Plan (Individual) offered to an Individual as well as his or her
dependent family members also known as "Delta Care Hospitalization Plan".
Out-patient treatment coverage plans:
Out-patient Insurance Plan - Offered as an adjunct to Group Hospitalization

Out-patient Management Plan - Offered as an adjunct to Group Hospitalization
Overseas treatment coverage plan for travelers:
Overseas Medicliam Policy (OMP) A pre-requisite for visa application offered only to
Individuals traveling abroad.
Hospitalization Insurance Plans:
Covers in-patient (Hospitalization) treatment expenses of an insured member
21
Chapter-3
Tasks and Activities
22
3.1 Tasks and Activities:
I worked in two parts in Delta Life Insurance Company Ltd. These are Cell-1 and Service
Center. The environment of my organization is quite beautiful. The employees of the
organization are so much cooperative. Total working history is described with department wise.
3.2 Cell-1:
Cell-1 worked for first year activity of a policy. There are several departments in cell-1. This are-
Underwriting ( U/W) Department

Commission Department
Accounts Department
IT Department
Policy Department
3.2.1 Underwriting (U/W) Department:
Underwriting is the most important part of life insurance company. If an underwriter makes a
wrong decision, it affects into the company. An underwriter should have experience, sense and
sincerity. One policy stars from this department. I practically have filled much policy summary
form. If policy amount is 1 to 500000, this underwriter makes decision. But If policy amount is
500001-5000000, it will go to the head office and If policy amount is greater than 5000000, it it
will go to the Apollo Munich Insurance company, Mumbai. Total process showed in a table.
Fig: Underwriting Activities
Input Proposal Checking the requirements Fill up the Decision by

number according to the GI policy the underwriter
summary entry
Go through PR/BM entry in the Go through the A/C Calculate the policy
the IT policy summary for PR/BM premium
FPR issue FPR check & Go through the policy

seal with sign department for Dolil Source: Table Desk Work
23
3.2.2 Commission Department:
In this company, there are two parts. One is Management/ Admin and other is Development.
This department works for development people. The policy is-
Fig: Development people rank
FA UM BM CRM JAVP AVP JVP VP JSVP
EVP SVP
Source: Table Desk Work
From this rank FA, UM and BM get commission from the company. If policy year are-
Year Commission in %
10-11 22%
12-14 25%
15-19 32%
20 & Above 35%
Note: This commission pay according to Insurance Development & Regulatory Authority
Bangladesh (IDRA).
3.2.3 Accounts Department:
Accounts Department worked for daily and monthly collection or expense. It has two part. One
is Daily Collection Statement (DCS) and another is Daily Expense Statement (DES). They also
distributes the salary of the employee. It works in the own website.
24
Fig: Daily Collection Statement Activity
DCS Summary( Full Bank Statement Credit Voucher Journal

Month) Reconsolution
Fig: Daily Expense Statement Activity
DES Summary Similarity check in Bank Statement Credit Voucher

Register and Summary Register
3.2.4 IT Department:
IT Department is worked in issuing FPR and policy number.
3.2.5 Policy Department:
Policy Department is worked for issuing Dolil with name, age and policy number. The process is
given below-
Fig: Process of Policy Department
Setting FPR file schedule Dolil endorse Checking Stamping

according to policy no. policy no.
Record File in the Dolil Counter

record room Dispatched Sign
25
3.3 Service Center:
Service center is worked for renewal activities. If anyone do late to give premium with due time,
employee of service center takes decision for next requirement. It has several department. These
are Claims department, Accounts department, Alteration department. Claims department works
for maturity, surrender and loans.
3.3.1 Claims department:
Claims department is worked for maturity, surrender and loan. When Policy holder claims for
maturity or surrender, claims officer pay their amount with calculating in the medium of issuing
check. Its average payment period is one month.
3.3.2 Alteration department:
Alteration department is worked for any alteration like policy amount changing, renew Dolil etc.
26
Chapter- 4
Financial Statement Analysis
27
4.1 Ratio Analysis:
Quantitative analysis of information contained in a companys financial statements. Ratio

analysis is based on line items in financial statements like the balance sheet, income statement
and cash flow statement; the ratios of one item or a combination of items - to another item or
combination are then calculated. Ratio analysis is used to evaluate various aspects of a
companys operating and financial performance such as its efficiency, liquidity, profitability and
solvency. The trend of these ratios over time is studied to check whether they are improving or
deteriorating. Ratios are also compared across different companies in the same sector to see how
they stack up, and to get an idea of comparative valuations. Ratio analysis is a cornerstone of
fundamental analysis. Ratio points out the operating efficiency of the firm i.e. whether the
management has utilized the firms assets correctly, to increase the investors wealth. It ensures a
fair return to its owners and secures optimum utilization of firms assets.
Ratio analysis helps in inter-firm comparison by providing necessary data. An inter firm
comparison indicates relative position. It provides the relevant data for the comparison of the
performance of different departments. If comparison shows a variance, the possible reasons of
variations may be identified and if results are negative, the action may be initiated immediately
to bring them in line. Yet another dimension of usefulness or ratio analysis, relevant from the
View point of management is that it throws light on the degree efficiency in the various activity
ratios measures this kind of operational efficiency.
a) Liquidity Ratios
b) Leverage Ratios
c) Profitability Ratios
d) Activity Ratios
e) Market Ratios
4.1.1 Liquidity Ratios:
Liquidity ratios measure a firms ability to meet its current obligations. These include:
28
Current Ratio:
Current Ratio = Current Assets / Current Liabilities
This ratio indicates the extent to which current liabilities are covered by those assets expected to
be converted to cash in the near future. Current assets normally include cash, marketable
securities, accounts receivables, and inventories. Current liabilities consist of accounts payable,
short-term notes payable, current maturities of long-term debt, accrued taxes, and other accrued
expenses. Current assets are important to businesses because they are the assets that are used to
fund day-to-day operations and pay ongoing expenses.
Table-4: Current Ratio
Year 2014 2013 2012

Current Asset 36622816949 29500117360 26247925470
Current Liability 1819779782 1845941306 1339709679
Current Ratio 20.12 15.98 19.59
Source: Primary Data
Fig: Current Ratio of Delta Life Insurance Company Ltd.
25
20
15
10
Current Ratio 5
0
2014 2013 2012
Year
Source: Annual Report of Delta Life Insurance Company Ltd.
29
The current ratio for the year 2012, 2013 & 2014 is 19.59, 15.98 & 20.12 respectively, compared
to standard ratio 2:1 this ratio is more higher which shows high short term liquidity efficiency at
the same time holding more than sufficient current assets mean efficient use of resources.
Sales to Working Capital:
Sales to Working Capital = Sales / Working Capital
Sales to working capital give an indication of the turnover in working capital per year. A low
working capital indicates an unprofitable use of working capital.
Table-5: Sales to Working Capital
Year 2014 2013 2012

Sales 37690241423 35414665656 31585092463
Working capital 34803037167 27654176054 24908215791
Sales to Working Capital 1.083 1.281 1.268

Fig: Sales to Working Capital of Delta Life Insurance Company Ltd
1.3
1.25
1.2
Sales to Working 1.15

Capital 1.1
1.05
1
0.95
2014 2013 2012
Year
Source: Annual Report of Delta Life Insurance Company Ltd
30
This liquidity ratio for the years 2012, 2013 & 2014 is 1.083, 1.281 & 1.268 times respectively,
compared to standard ratio 2:1 this ratio is lower which shows low short term liquidity efficiency
at the same time holding less than sufficient current assets mean inefficient use of resources.
Working Capital:
Working Capital means a measure of both a company's efficiency and its short-term financial
health. The working capital is calculated as:
Working Capital= Current Asset- Current Liabilities
The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has
enough short term assets to cover its short term debt. Anything below 1 indicates negative W/C
(working capital). While anything over 2 means that the company is not investing excess assets.
Most believe that a ratio between 1.2 and 2.0 is sufficient. Also known as "net working capital".
Table-6: Working Capital Ratio
Year 2014 2013 2012

Current Asset 36622816949 29500117360 26247925470
Current Liability 1819779782 1845941306 1339709679
Working Capital 34803037167 27654176054 24908215791

It is very clear from the above calculations that the working capital of the company is gradually
increasing over the years, which shows good short term liquidity efficiency.
4.1.2 Leverage Ratios:
By using a combination of assets, debt, equity, and interest payments, leverage ratios are used to
understand a company's ability to meet it long term financial obligations. Leverage ratios
measure the degree of protection of suppliers of long term funds. The level of leverage depends
on a lot of factors such as availability of collateral, strength of operating cash flow and tax
treatments. Thus, investors should be careful about comparing financial leverage between
companies from different industries. For example companies in the banking industry naturally
operates with a high leverage as collateral their assets are easily collateralized. These include:
31
Debt Ratio:
Debt Ratio = Total Debt / Total Assets
The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of
funds provided by the creditors. The proportion of a firm's total assets that are being financed
with borrowed funds. The debt ratio is calculated by dividing total long-term and short-term
liabilities by total assets. The higher the ratio, the more leverage the company is using and the
more risk it is assuming. Assets and liabilities are found on a company's balance sheet.
Table-7: Debt Ratio
Year 2014 2013 2012

Total Debt 36443796378 29897760084 27671287791
Total Assets 37682296378 30888760084 27717287791
Debt Ratio 0.967 0.968 0.998
Fig: Debt Ratio of Delta Life Insurance Company Ltd
1.005
1
0.995
0.99
0.985
0.98
Debt Ratio
0.975
0.97
0.965
0.96
0.955
0.95
2014 2013 2012
Year
32
Calculating the debt ratio, we came to see that this company is highly leveraged one.
Debt to Equity Ratio:
Debt to Equity Ratio = Total debt / Total Equity
The debt to equity ratio is the most popular leverage ratio and it provides detail around the
amount of leverage (liabilities assumed) that a company has in relation to the monies provided
by shareholders. As you can see through the formula below, the lower the number, the less
leverage that a company is using. The debt to equity ratio gives the proportion of a company (or
person's) assets that are financed by debt versus equity. It is a common measure of the long-term
viability of a company's business and, along with current ratio, a measure of its liquidity, or its
ability to cover its expenses. As a result, debt to equity calculations often only includes long-
term debt rather than a company's total liabilities. A high debt to equity ratio implies that the
company has been aggressively financing its activities through debt and therefore must pay
interest on this financing.
Table-8: Debt to Equity Ratio
Year 2014 2013 2012

Total Debt 36443796378 29897760084 27671287791
Total Equity 1238500000 991000000 46000000
Debt to Equity Ratio 29.43 30.17 601.5
33
Fig: Debt to Equity Ratio of Delta Life Insurance Company Ltd
700
600
500
Debt to Equity 400

Ratio 300
200
100
0
2014 2013 2012
Year
We can see from the above calculations that this ratios continuously decreasing in the last three
years.
Current Worth to Net worth Ratio:
Current Worth to Net worth Ratio= Current Worth / Net worth Ratio
We can calculate current worth and net worth by using following formulas:
Current Worth = Total Current Assets Total Current Liabilities
Net Worth = Total Assets - Total Liabilities
Table-9: Current Worth to Net worth Ratio
Year 2014 2013 2012

Current Worth 34803037167 27654176054 24908215791
Net worth 1238500000 991000000 46000000
Current Worth to Net worth Ratio 28.1 27.91 541.5
34
Fig: Current Worth Ratio of Delta Life Insurance Company Ltd
600
500
400
Current Worth
300
Ratio
200
100
0
2014 2013 2012
Year
We can see from the above calculations that this ratios continuously decreasing in the last three
years. In 2012 it was 541.5, in 2013 it was 27.91 and in 2014 it was 28.1.
Total Capitalization Ratio:
Total Capitalization Ratio = Long-term debt / long-term debt + shareholders' equity
The capitalization ratio measures the debt component of a company's capital structure, or
capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a
company's operations and growth. Long-term debt is divided by the sum of long-term debt and
shareholders' equity. This ratio is considered to be one of the more meaningful of the "debt"
ratios - it delivers the key insight into a company's use of leverage.
Table-10: Total Capitalization Ratio
Year 2014 2013 2012

Long-term debt 34624016596 28051818778 26331578112
long-term debt + equity 35862516596 29042818778 26377578112
Total Capitalization Ratio 0.965 0.966 0.998
35
Fig: Total Capitalization Ratio of Delta Life Insurance Company Ltd
1.01
1
0.99
Total 0.98
Capitalization
Ratio 0.97
0.96
0.95
0.94
2014 2013 2012
Year
It is obvious from the above calculations that there is a strictly stable in this ratio over the years.
4.1.3 Profitability Ratios:
Profitability is the net result of a number of policies and decisions. This section of the discusses
the different measures of corporate profitability and financial performance. These ratios, much
like the operational performance ratios, give users a good understanding of how well the
company utilized its resources in generating profit and shareholder value. The long-term
profitability of a company is vital for both the survivability of the company as well as the benefit
received by shareholders. It is these ratios that can give insight into the all-important "profit".
Profitability ratios show the combined effects of liquidity, asset management and debt on
operating results. These ratios examine the profit made by the firm and compare these figures
with the size of the firm, the assets employed by the firm or its level of sales. There are four
important profitability ratios that I am going to analyze:
36
Net Profit Margin:
Net Profit margin = Net Profit / Sales x 100
Net Profit Margin gives us the net profit that the business is earning per dollar of sales. This
margin indicates the profit after all the costs have been incurred it shows that what % of turnover
is represented by the net profit. An increase in the ratios indicates that a firm is producing higher
net profit of sales than before.
Table-11: Net Profit Margin
Year 2014 2013 2012

Net Profit 36154795025 33061109736 29366780578
Sales 37690241423 35414665656 31585092463
Net Profit Margin 98.54 95.61 95.43
Fig: Net Profit Margin of Delta Life Insurance Company Ltd
120
100
80
Net Profit Margin 60
40
20
0
Net Profit Margin
Year
Therefore, the Net Profit Margin was 95.43% in 2012, increase to 0.18% in 2013 and then
decrease to 2.93% in 2014.
37
Return on Assets:
Return on Assets (ROA) = Profit after Taxation / Average Total assets x 100
ROA measures of a company's profitability, equal to a fiscal year's earnings divided by its total
assets, expressed as a percentage. This is an important ratio for companies deciding whether or
not to initiate a new project. The basis of this ratio is that if a company is going to start a project
they expect to earn a return on it, ROA is the return they would receive.
Simply put, if ROA is above the rate that the company borrows at then the project should be
accepted, if not then it is rejected.
Table-12: Return on Assets
Year 2014 2013 2012

Net income 1000425789 835761671 810780116
Total Average Assets 37682296378 30888760084 27717287791
ROA 0.959 1.07 1.06

Fig: Return on Assets of Delta Life Insurance Company Ltd
1.08
1.06
1.04
1.02
1
Return on Assets
0.98
0.96
0.94
0.92
0.9
1 2 3
Year
Return on assets increased in 2013 and it was maximum in year 2013.
38
Return on Equity (ROE):
Return on Total Equity = Profit after taxation x 10
Return on Equity measures the amount of Net Income earned by utilizing each dollar of Total
common equity. It is the most important of the Bottom line ratio. By this, we can find out how
much the shareholders are going to get for their shares. This ratio indicates how profitable a
company is by comparing its net income to its average shareholders' equity. The return on equity
ratio (ROE) measures how much the shareholders earned for their investment in the company.
The higher the ratio percentage, the more efficient management is in utilizing its equity base and
the better return is to investors.
Table- 13: Return on Equity
Year 2014 2013 2012

Net income 36154795025 33061109736 29366780578
Total Equity 1238500000 991000000 46000000
ROE 29.19 33.36 638.4

Fig: Return on Equity of Delta Life Insurance Company Ltd
700
600
500
400
Return on Equity
300
200
100
0
1 2 3
Year
39
The Return on Equity was maximum in 2012 but decreased in 2013 and went down more in
2014. This again may have happened due to the issue of more long-term debt in 20013 and 2014.
4.1.4 Activity Ratios
Activity ratio are sometimes are called efficiency ratios. Activity ratios are concerned with how
efficiency the assets of the firm are managed. These ratios express relationship between level of
sales and the investment in various assets inventories, receivables, fixed assets etc.
Total Asset Turnover:
Total Asset Turnover = Total Sales / Total Assets
The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales
in dollars by assets in dollars. Asset turnover measures a firm's efficiency at using its assets in
generating sales or revenue - the higher the number the better. It also indicates pricing strategy:
companies with low profit margins tend to have high asset turnover, while those with high profit
margins have low asset turnover.
Table- 14: Total Asset Turnover
Year 2014 2013 2012

Total Sales 37690241423 35414665656 31585092463
Total Assets 37682296378 30888760084 27717287791
Total Asset Turnover 1 1.147 1.14
40
Fig: Total Asset Turnover of Delta Life Insurance Company Ltd
1.2
1.15
1.1
Total Asset
1.05
Turnover
0.95
0.9
2014 2013 2012
Year
The Return on Equity was maximum in 2012 but decreased in 2013 and went down more in
2014. This again may have happened due to the issue of more long-term debt in 2013 and 2014.
4.1.5 Market Ratios
Market Value Ratios relate an observable market value, the stock price, to book values obtained
from the firm's financial statements.
Earnings Per Share- EPS:
Earnings Per Share = Profit after Taxation/Number of Shares
The portion of a company's profit allocated to each outstanding share of common stock. Earnings
per share serve as an indicator of a company's profitability. Earnings per share are generally
considered to be the single most important variable in determining a share's price. It is also a
major component used to calculate the price-to-earnings valuation ratio.
41
Table- 15: Earnings Per Share
Year 2014 2013 2012

Profit after Taxation 1000425789 835761671 810780116
Number of Shares 123750000 123750000 4500000
Earnings Per Share 8.084 6.754 180.2

Fig: Earning Per Share-EPS of Delta Life Insurance Company Ltd
200
180
160
140
120
Earning Per
100
Share-EPS
80
60
40
20
0
2014 2013 2012
Year
Price / Earnings Ratio:
Price / Earnings Ratio = Stock Price Per Share/Earning Per Shares
The Price-Earnings Ratio is calculated by dividing the current market price per share of the stock
by earnings per share (EPS). (Earnings per share are calculated by dividing net income by the
number of shares outstanding.) The P/E Ratio indicates how much investors are willing to pay
per dollar of current earnings. As such, high P/E Ratios are associated with growth stocks.
(Investors who are willing to pay a high price for a dollar of current earnings obviously expect
high earnings in the future.) In this manner, the P/E Ratio also indicates how expensive a
42
particular stock is. This ratio is not meaningful, however, if the firm has very little or negative
earnings. The Price-Earnings Ratio is calculated by dividing the current market price per share of
the stock by earnings per share (EPS). (Earnings per share are calculated by dividing net income
by the number of shares outstanding.) The P/E Ratio indicates how much investors are willing to
pay per dollar of current earnings. As such, high P/E Ratios are associated with growth stocks.
(Investors who are willing to pay a high price for a dollar of current earnings obviously expect
high earnings in the future.) In this manner, the P/E Ratio also indicates how expensive a
particular stock is. This ratio is not meaningful, however, if the firm has very little or negative
earnings.
Table- 16: Price-Earnings Ratio
Year 2014 2013 2012

Stock Price Per 10 10 10
EPS 8.084 6.754 180.2
Price-Earnings Ratio 1.237 1.481 0.056

Fig: Price/Earning Ratio of Delta Life Insurance Company Ltd
1.6
1.4
1.2
1
Price/Earning
0.8
Ratio
0.6
0.4
0.2
0
1 2 3
Year
43
The P/E ratio was 0.056 times in 2012 and increased further to as high as 1.481 times in the
following year. However, in 2014 it declined to 1.237 times which is an alarming signal for the
potential investors.
3.2 Common Size Analysis:
The term "trend analysis" refers to the concept of collecting information and attempting to spot a
pattern, or trend, in the information. In some fields of study, the term "trend analysis" has more
formally-defined meanings. Although trend analysis is often used to predict future events, it
could be used to estimate uncertain events in the past. Financial statement information is used by
both external and internal users, including investors, creditors, managers, and executives. These
users must analyze the information in order to make business decisions, so understanding
financial statements is of great importance. Several methods of performing financial statement
analysis exist. I will discuss two of these methods: horizontal analysis and vertical analysis.
4.2.1 Horizontal Analysis:
Horizontal analysis is the comparison of historical financial information over a series of

reporting periods, or of the ratios derived from this financial information. The intent is to see if
any numbers are unusually high or low in comparison to the information for bracketing periods,
which may then trigger a detailed investigation of the reason for the difference. The analysis is
most commonly a simple grouping of information that is sorted by period, but the numbers in
each succeeding period can also be expressed as a percentage of the amount in the baseline year,
with the baseline amount being listed as 100%.It is a procedure in fundamental analysis in which
an analyst compares ratios or line items in a company's financial statements over a certain period
of time. The analyst will use his or her discretion when choosing a particular timeline; however,
the decision is often based on the investing time horizon under consideration.
44
Table-17: Horizontal Analysis of Balance Sheet
Horizontal Analysis
Delta Life Insurance Company Ltd
Balance Sheet
As the Dcember 31 2014,2013,2012
Horizontal Analysis
2014 2013 2012
Assets 2014 2013 2012
Loan
On insurers 667275484 591515642 509955906 130.85 115.9 100
polices within
their surrender
value
Investment
Statutory 15000000 15000000 2000000 750 750 100
deposit with
Bangladesh
Bank
Bangladesh 1087658820 8747225969 8385482195 129.71 104.3 100
Govt. Treasury
Bond
Shares listed on 9916201374 6301694232 5131994379 193.22 122.7 100
stock exchanges
Debentures and 307095470 456571210 476518717 64.446 95.81 100
bonds
Mutual Fund 10000000 10000000 30000000 33.333 33.33 100
Central 3138890 3138890 3138890 100 100 100
Depository
Bangladesh Ltd.
45
DLIC Securities 399999910 399999910 320200000 124.92 124.9 100
Limited
Investment 1008507427 450816503
Property
Other loans 84714026 85698840 91154267 92.935 94.01 100
Agents' balance 43738 34597 3461053 1.2637 0.999 100

Outstanding 537446216 548650428 646608173 83.118 84.85 100
Premium
Collection in 86716514 96931160
hand
Interest, 884714219 856571106 806813031 109.66 106.1 100
dividends and
rents accruing
but not due
Advances and 1237817198 949435460 785420077 157.6 120.8 100
deposits
Sundry deptors 71121188 70896104 55089341 129.1 128.6 100
Cash and bank

balances
On fixed 9170495604 8811861312 7652567484 119.84 115.1 100
deposits with
banks
On current 287494840 307345828 384335639 74.803 79.96 100
account with
banks
On SND 1041156498 764003551 947127835 109.93 80.66 100
account with
banks
46
Cash in hand 1826214 1695431 1353853 134.89 125.2 100
Cash in transit 14016757 29652458 11823448 118.55 250.7 100
Branch petty 1447102 1378729 2881182 50.226 47.85 100
cash
Other accounts
Fixed assets( t 1050850491 1378756931 1456667484 72.141 94.65 100
cost less
accumulated
depreciation)
Stamps, 8628938 9885793 12694837 67.972 77.87 100
printing and
stationary in
hand
Total Assets 3768229638 30888760084 2771728779 135.95 111.4 100
1 4
Share Capital and

Liabilities
Shareholders' Capital
Authorized
500000000 5000000000 5000000000 5000000000 100 100 100
ordinary shares
of Tk. 10 each
Issued, subscribed and paid-up

123750000 1237500000 990000000 45000000 2750 2200 100
ordinary shares
of Tk. 10 each
fully paid up
47
Dividend 1000000 1000000 1000000 100 100 100
equalization
reserve
Life Insurance 3052920342 28051818778 2633157811 115.94 106.5 100

fund 2
Fair Value 4094813104
change Account
Estimated 475416245 704635592 665191938 71.471 105.9 100

liabilities in
respect of
outstanding
claims, whether
due or intimated
Amount due to 36909668 41237585 67197302 54.927 61.36 100
other persons or
bodies carrying
on insurance
business
Sundry 1077316584 835582888 329371461 327.08 253.6 100
creditors
Provision for 82827488 83399711 73363920 112.9 113.6 100
doubtful debts
Reserve for 135638742 170747611 192184968 70.577 88.84 100
unexpected risk
Premium 11671055 10337919 12400090 94.121 83.37 100
deposits
Total share 3768229637 30888760084 2771728779 135.95 111.4 100

capital and 8 1
48
liabilities
Source: Annual Report
Table-18: Horizontal Analysis of Profit and Loss Account
Horizontal Analysis
Profit and Loss Account
As the December 31 2014,2013,2012
2014 2013 2012 Horizontal Analysis
2014 2013 2012
Balance of fund 28051818778 26331578112 23282041204 120.49 113.1 100
beginning of the
year
Adjustment mde 208255502 236693681 107622750 193.51 219.9 100
during the year
First Year 576686965 461967190 371198513 155.36 124.5 100
premium( OL)
First Year 423738824 373794481 439481594 96.418 85.05 100
premium(
GN_GRB)
Renewal premium( 2154083201 2125491329 2100825850 102.54 101.2 100

OL)
Renewal premium( 1935272063 1908281303 1761099104 109.89 108.4 100
GN_GRB)
Group life 240456743 329276557 253611545 94.813 129.8 100

insurance premium
Health insurance 114033431 148082400 160575350 71.016 92.22 100
premium
49
Gross Premium 5444271227 5346893260 5086791956 107.03 105.1 100
Reinsurance -39138673 -49951329 -57365054 68.227 87.08 100
premium
Net Premium 5405132554 5296941931 5029426902 107.47 105.3 100
Interest, dividend 3002764079 2677563111 2327639110 129 115 100

& rents
Other Income 21844721 36127150 27682381 78.912 130.5 100
Total 36689815634 34578903985 30774412347 119.22 112.4 100
First year
premium, where
the maximum
premium paying
period is
Single 62235461 54319012 39127779 159.06 138.8 100
Four years 6254 69838 24626 25.396 283.6 100
Five years 264227 794041 1907326 13.853 41.63 100
Six years 100213 176139 133871 74.858 131.6 100
Seven years 154283 143329 268491 57.463 53.38 100
Eight years 136649 199481 182533 74.863 109.3 100
Nine years 198228 45545 60963 325.16 74.71 100
Ten years 321526647 280280673 326121651 98.591 85.94 100
Eleven years 9869943 11145062 10290786 95.91 108.3 100
Twelve years or 605933884 488588551 432562090 140.08 113 100
over( including
throughout life)
1000425789 835761671 810680116 123.41 103.1 100
Claims under
policies( including
50
provision for
claims), less
reinsurance
By death 168386861 290426378 198712875 84.739 146.2 100
By maturity 1724905487 1602465862 1584915505 108.83 101.1 100
By survival 585943828 545195395 507657519 115.42 107.4 100
by hospitalization 78981797 142919044 69301485 113.97 206.2 100
By others 465259 5231218 3555305 13.086 147.1 100
By surrenders 174665186 95619378 82607186 211.44 115.8 100
Annuities 708405 677023 617740 114.68 109.6 100
Bonus in Cash 1196620019 766385540 376596797 317.75 203.5 100
Profit commission 15910755 27818187 18902430 84.173 147.2 100

3946587597 3476738025 2842866842 138.82 122.3 100
Expenses of management
Commission
(a) Commission to 540124285 443193569 506653082 106.61 87.47 100
Insurance
agents(less that on
reinsurance)
(b) Allowances and 250390424 310388247 123821179 202.22 250.7 100
commission
Salaries etc. 445029866 435148180 413390239 107.65 105.3 100

Traveling and 9153021 8620584 10798099 84.765 79.83 100
conveyance
Director's fees 730250 1097500 1048000 69.68 104.7 100
Auditors' fees 491250 460000 1000000 49.125 46 100
Medical fees 1923163 1346224 2150635 89.423 62.6 100
Legal and 1945516 5227702 6507451 29.897 80.33 100
51
professional fees
Insurance policy 11186405 8945935 9395437 119.06 95.22 100

stamp
Advertisement and 7974158 10603252 9406597 84.772 112.7 100
publicity
Printing and 14916173 14852166 16624741 89.723 89.34 100
stationery
Office rent 70900276 90454290 84390181 84.015 107.2 100
Bank charges 38557347 42371015 43383914 88.875 97.67 100
Repairs and 10202270 9110628 5610590 181.84 162.4 100
maintenance
Car fuel, 30041349 27382636 27383272 109.71 100 100
maintenance &
repairs
Group insurance 5264082 5138256 5336752 98.638 96.28 100
Papers and 499063 470874 515950 96.727 91.26 100
periodicals
Telephone, telex & 13685563 14882322 15080772 90.748 98.68 100
electricity etc.
Training & 1423934 1281641 1734769 82.082 73.88 100
recruitment
expenses
fees & 5657974 8727711 7050083 80.254 123.8 100
subscriptions
Donations 30000 1370819 4598268 0.6524 29.81 100
Entertainment 352668 451574 2714139 12.994 16.64 100
Staff welfare 1658511 2123640 26383926 6.2861 8.049 100
Insurance 3574975 2442359 2190938 163.17 111.5 100
premium (general)
52
Postage & telegram 3174395 3196197 3362088 94.417 95.07 100
Uniform & liveries 894134 811302 841774 106.22 96.38 100
Development 15942508 15799660 13199916 120.78 119.7 100
expenses
prize & awards 16168465 4407423 1137964 1420.8 387.3 100
Conference 7569610 6845749 8180779 92.529 83.68 100
Company 18714127 17903772 18474420 101.3 96.91 100
registration (
renewal) fees
Stamps 3174099 4341258 2147778 147.79 202.1 100
Staff transport 1449589 2550724 2004020 72.334 127.3 100
expenses
AGM/EGM 1816331 3693365 3352467 54.179 110.2 100
expenses
Silver jubilee 3933682 26242547 0 14.99 100
CDBL related 830617 8219993 1519002 54.682 541.1 100
charges
1535446398 1517794249 1407631769 109.08 107.8 100
Other expenses
Depreciations 30839405 32240086
Provision for 12209336 50656 0 24102 100
doubtful debts
Reserve for 135638742 170747611 192184968 70.577 88.85 100
unexpired risk
Provision for 155700000 372355900
income tax
Appropriations
Dividend 356400000 945000000
Balance of the fund 30529203492 28051818778 26331578112 115.94 106.5 100
53
at the end of the
year
Total 36689815634 34578903985 30774312347 119.22 112.4 100
4.2.2 Vertical Analysis:
It is a method of financial statement analysis in which each entry for each of the three major
categories of accounts (assets, liabilities and equities) in a balance sheet is represented as a
proportion of the total account. The main advantages of analyzing a balance sheet in this manner
are that the balance sheets of businesses of all sizes can easily be compared. It also makes it easy
to see relative annual changes in one business. When using vertical analysis, the analyst
calculates each item on a single financial statement as a percentage of a total. The term vertical
analysis applies because each year's figures are listed vertically on a financial statement. The
total used by the analyst on the income statement is net sales revenue, while on the balance sheet
it is total assets. This approach to financial statement analysis, also known as component
percentages, produces common-size financial statements. Common-size balance sheets and
income statements can be more easily compared, whether across the years for a single company
or across different companies.
Table-19: Vertical Analysis of Balance Sheet
Vertical Analysis
Balance Sheet
As the December 31 2014,2013,2012
2014 2013 2012 Vertical Analysis
Assets 2014 2013 2012
Loan
On insurers polices 667275484 591515642 509955906 1.770 1.915 1.8398
within their 8 5
surrender value
54
Investment
Statutory deposit 15000000 15000000 2000000 0.039 0.048 0.0072
with Bangladesh 8 6 2
Bank
Bangladesh Govt. 1087658828 8747225969 8385482195 28.86 28.31 30.253
Treasury Bond 0 4 8 6
Shares listed on 9916201374 6301694232 5131994379 26.31 20.40 18.515
stock exchanges 5 1 5
Debentures and 307095470 456571210 476518717 0.815 1.478 1.7192
bonds 1 1
Mutual Fund 10000000 10000000 30000000 0.026 0.032 0.1082
5 4 4
Central Depository 3138890 3138890 3138890 0.008 0.010 0.0113
Bangladesh Ltd. 3 2 2
DLIC Securities 399999910 399999910 320200000 1.061 1.295 1.1552
Limited 5 4
Investment 1008507427 450816503 2.676 1.459
Property 3 5
Other loans 84714026 85698840 91154267 0.224 0.277 0.3288
8 4 7
Agents' balance 43738 34597 3461053 0.000 0.000 0.0124

1 1 9
Outstanding 537446216 548650428 646608173 1.426 1.776 2.3328
Premium 3 2 7
Collection in hand 86716514 96931160 0.230 0.313
1 8
Interest, dividends 884714219 856571106 806813031 2.347 2.773 2.9108
and rents accruing 8 1 7
but not due
55
Advances and 1237817198 949435460 785420077 3.284 3.073 2.8336
deposits 9 7 8
Sundry debtors 71121188 70896104 55089341 0.188 0.229 0.1987
7 5 5
Cash and bank balances

On fixed deposits 9170495604 8811861312 7652567484 24.33 28.52 27.609
with banks 6 8 4
On current account 287494840 307345828 384335639 0.762 0.995 1.3866
with banks 9 3
On SND account 1041156498 764003551 947127835 2.763 2.473 3.4171
with banks 4
Cash in hand 1826214 1695431 1353853 0.004 0.005 0.0048
8 5 8
Cash in transit 14016757 29652458 11823448 0.037 0.096 0.0426
2 6
Branch petty cash 1447102 1378729 2881182 0.003 0.004 0.0103
8 5 9
Other accounts
Fixed assets ( t cost 1050850491 1378756931 1456667484 2.788 4.463 5.2554
less accumulated 7 6 5
depreciation)
Stamps, printing 8628938 9885793 12694837 0.022 0.032 0.0458
and stationary in 9
hand
Total Assets 3768229637 3088876008 2771728779 100 100 100
8 4 1
Share Capital and Liabilities

56
Authorized
500000000 ordinary 5000000000 5000000000 5000000000 13.26 16.18 18.039
shares of Tk. 10 9 7 3
each

123750000 ordinary 1237500000 990000000 45000000 3.284 3.205 0.1623
shares of Tk. 10 5
each fully paid up
Dividend 1000000 1000000 1000000 0.002 0.003 0.0036
equalization 7 2 1
reserve
Life Insurance fund 3052920349 2805181877 2633157811 81.01 90.81 95.000

2 8 2 7 6 6
Fair Value change 4094813104 10.86
Account 7
Estimated liabilities 475416245 704635592 665191938 1.261 2.281 2.3999

in respect of 6 2 2
outstanding claims,
whether due or
intimated
Amount due to 36909668 41237585 67197302 0.097 0.133 0.2424
other persons or 9 5 4
bodies carrying on
insurance business
Sundry creditors 1077316584 835582888 329371461 2.858 2.705 1.1883
9 1 3
Provision for 82827488 83399711 73363920 0.219 0.27 0.2646
doubtful debts 8 9
57
Reserve for 135638742 170747611 192184968 0.36 0.552 0.6933
unexpected risk 8 8
Premium deposits 11671055 10337919 12400090 0.031 0.033 0.0447
5 4
Total share capital 3768229637 3088876008 2771728779 100 100 100

and liabilities 8 4 1
Comparisons:
Financial trend analysis is an applied, practical approach for monitoring the financial condition
of any company through the use of financial indicators. I shall use technique to compare previous
three-year period data and observes how they change. This would permit an assessment of the
current financial condition.
4.2.3 Trend Analysis
A firm's present ratio is compared with its past and expected future ratios to determine whether
the company's financial condition is improving or deteriorating over time. Trend analysis studies
the financial history of a firm for comparison. By looking at the trend of a particular ratio, one
sees whether the ratio is falling, rising, or remaining relatively constant. This helps to detect
problems or observe good management.
58
Table-20: Trend Analysis
Trend Analysis
Delta Life Insurance Company Ltd.
Performance Area 2014 2013 2012 Trend
a) Liquidity Ratios
Current Ratio 20.12486198 15.98107007 19.59224889 Increase in 2014
Working Capital 34803037167 27654176054 24908215791 Increase in 2014
Sales to Working 1.082958399 1.280626318 1.268059211 High in 2013
Capital
b) Leverage Ratios
Debt Ratio 0.967133107 0.967917132 0.998340386 Leverage remain
same
Debt to Equity Ratio 29.42575404 30.16928364 601.5497346 Drops in leverage in
2014
Current Worth/Net 28.10095855 27.90532397 541.482952 Higher in 2012
worth Ratio
Total Capitalization 0.965465335 0.965877968 0.998256095 Leverage remain
Ratio same
c) Profitability Ratios
Net Profit Margin 2.7267125 95.61063517 95.42596702 Lower profitability
in 2014
Return on Assets 0.959463687 1.07032816 1.059511335 Remain same
Return on Equity 29.19240616 33.36136199 638.4082734 Higher in 2012
d) Activity Ratios
Total Asset Turnover 1.000210843 1.146522734 1.139544847 Higher efficiency
2013
59
e) Market Ratios:
Earnings Per Share- 8.0842488 6.753629665 180.1733591 Higher in 2012
EPS
Price/Earnings Ratio 1.23697331 1.480685275 0.055502101 Higher in 2013
Summary:
Financial Statement Analysis is a method used by interested parties such as investors, creditors,
and management to evaluate the past, current, and projected conditions and performance of the
firm. This report mainly deals with the insight information of Delta Life Insurance Company Ltd.
In the current picture where financial volatility is endemic and financial intuition is becoming
popular, when it comes to investing, the sound analysis of financial statements is one of the most
important elements in the fundamental analysis process. At the same time, the massive amount of
numbers in a company's financial statements can be bewildering and intimidating to many
investors. However, through financial ratio analysis, tried to work with these numbers in an
organized fashion and presented them in a summarizing form easily understandable to both the
management and interested investors. It is required by law that all private and public limited
companies must prepare the financial statements like, income statement, balance sheet and cash
flow statement of the particular accounting period. The management and financial analyst of the
company analyze the financial statements for making any further financial and administrative
decisions for the betterment of the company. Therefore, I select this topic, so that I have done
some financial analysis that will certainly help the management of review their performance and
also assist the interested people like investors and creditors. That as a financial analyst how can I
make any important financial decision by analyzing the financial statements of the company.
Because, it is the primary responsibility of the financial managers or financial analyst to manage
the financial matters of the company by evaluating the financial statements. I am also providing
some important suggestions and opinions about the financial matters of the business.
60
Chapter-5
Findings and Recommendations
61
5.1 Findings:
While working at Delta Life Insurance Company Ltd., Cell-1 and service center, I have attained
to the newer kind of experience. After the collecting and analyzing of data I have got some
findings. These findings are completely from my personal point of view. Those are given below.
Company is in very good position because of its asset strength and life fund.
There is most strength point is no loan from any institution.
As an insurance company, I have talked personally that they seem to believable
institution. There is no fraud.
Life fund is as stable as IDRAs rule.
It has skilled employee to serve the policy holder.
5.2 Recommendations:
Though the market is so much competitive, but the performance of the team of Delta Life
Insurance Company Ltd. is really satisfactory. Their offerings, services, post purchase behavior
with their valuable clients, regular notifications sent to the customers, organized way of making
policies, available agencies or branches, available customer care services through the whole
world etc. are helping them to capture the maximum amount of customers in this field. Some
recommendations for the organization are-
When I worked as an intern, I see many customer dont know when premium period. When they
come into the company, they feel hesitate like in the claims department. Man power should
increase in the claims department.
Every employee are unhappy about their salary, it should increase.

Company should increase customer awareness about insurance sector.
Computerized system and latest communication devices are the most important elements
for the coming year for Delta Life Insurance Company Ltd.
62
5.3 Conclusion:
Delta Life insurance Company is one of the leading insurance Company in Bangladesh. The
performance of Delta life Insurance company is getting better day by day. Its premium, assets,
claims meeting, utilization of income is getting better in last three years. The study is about the
financial of Delta Life Insurance Company Ltd., its cash payments, claims meeting, premium
collection, service offered, products etc. The study also has showed that the factors are related
with the investors, customers and cost furthermore, the study has identified that the DLICL
customer (both Clients and beneficiaries) are influenced by most of the same factors. Here Delta
life insurance Company limited could improve its marketing strategy for customer satisfaction.
Overall we can see that Delta Life Insurance Company Ltd. is one of the progressive Insurance
Company in Bangladesh for its servicing and its better performance.
63
Bibiography
1. http://www.investopedia.com/terms/l/liquidityratios.asp
2. http://www.investopedia.com/terms/w/workingcapital.asp
3. http://www.deltalife.org/pdf/Annual_Report_2014.pdf
4. http://www.accountingtools.com/horizontal-analysis
5. http://www.idra.org.bd/
6. http://www.investopedia.com/terms/r/ratioanalysis.asp
7. http://www.aaii.com/journal/article/16-financial-ratios-for-analyzing-a-companys-strengths-
and-weaknesses.touch
8. http://study.com/academy/lesson/liquidity-ratio-definition-calculation-analysis.html
9. Annual Report 2014
10. Annual Report 2012
i
Appendix

Balance Sheet
As the Dcember 31 2014,2013,2012
2014 2013 2012

Assets
Loan
On insurers polices within their 667275484 591515642 509955906
surrender value
Investment
Statutory deposit with Bangladesh 15000000 15000000 2000000
Bank
Bangladesh Govt. Treasury Bond 10876588280 8747225969 8385482195
Shares listed on stock exchanges 9916201374 6301694232 5131994379
Debentures and bonds 307095470 456571210 476518717
Mutual Fund 10000000 10000000 30000000
Central Depository Bangladesh Ltd. 3138890 3138890 3138890
DLIC Securities Limited 399999910 399999910 320200000
Investment Property 1008507427 450816503
Other loans 84714026 85698840 91154267
Agents' balance 43738 34597 3461053

Outstanding Premium 537446216 548650428 646608173
Collection in hand 86716514 96931160
Interest, dividends and rents 884714219 856571106 806813031
accruing but not due
Advances and deposits 1237817198 949435460 785420077
Sundry deptors 71121188 70896104 55089341
Cash and bank balances

On fixed deposits with banks 9170495604 8811861312 7652567484
On current account with banks 287494840 307345828 384335639
On SND account with banks 1041156498 764003551 947127835
Cash in hand 1826214 1695431 1353853
Cash in transit 14016757 29652458 11823448
Branch petty cash 1447102 1378729 2881182
ii
Other accounts
Fixed assets( t cost less accumulated 1050850491 1378756931 1456667484
depreciation)
Stamps, printing and stationary in 8628938 9885793 12694837
hand
Total Assets 37682296378 30888760084 27717287791
Share Capital and Liabilities

Authorized
500000000 orninary shares of Tk. 10 5000000000 5000000000 5000000000
each

123750000 ordinary shares of Tk. 10 1237500000 990000000 45000000
each fully paid up
Dividend equalization reserve 1000000 1000000 1000000
Life Insurnce fund 30529203492 28051818778 26331578112

Fair Vlue change Account 4094813104
Estimated liabilities in respect of 475416245 704635592 665191938

outstanding claims, whether due or
intimated
Ammount due to other persons or 36909668 41237585 67197302
bodies carrying on insurance
business
Sundry creditors 1077316584 835582888 329371461
Provission for doubtful debts 82827488 83399711 73363920
Reserve for unexpected risk 135638742 170747611 192184968
Premium deposits 11671055 10337919 12400090
Total share capital and liabilities 37682296378 30888760084 27717287791
iii
Profit and Loss Account
As the Dcember 31 2014,2013,2012
2014 2013 2012
Balance of fund begining of the 28051818778 26331578112 23282041204

year
Adjustment mde during the year 208255502 236693681 107622750
First Year premium( OL) 576686965 461967190 371198513

First Year premium( GN_GRB) 423738824 373794481 439481594
Renewal premium( OL) 2154083201 2125491329 2100825850

Renewal premium( GN_GRB) 1935272063 1908281303 1761099104
Group life insurance premium 240456743 329276557 253611545

Health insurance premium 114033431 148082400 160575350
Gross Premium 5444271227 5346893260 5086791956

Reinsurance premium -39138673 -49951329 -57365054
Net Premium 5405132554 5296941931 5029426902
Interest, dividend & rents 3002764079 2677563111 2327639110

Other Income 21844721 36127150 27682381
Total 36689815634 34578903985 30774412347
First year premium, where the
maximum premium paying
period is
Single 62235461 54319012 39127779
Four years 6254 69838 24626
Five years 264227 794041 1907326
Six years 100213 176139 133871
Seven years 154283 143329 268491
Eight years 136649 199481 182533
Nine years 198228 45545 60963
Ten years 321526647 280280673 326121651
Eleven years 9869943 11145062 10290786
Twelve years or over( including 605933884 488588551 432562090
throughout life)
iv
1000425789 835761671 810680116
Claims under policies( including
provision for claims), less
reinsurnce
By death 168386861 290426378 198712875
By maturity 1724905487 1602465862 1584915505
By survival 585943828 545195395 507657519
by hospitalization 78981797 142919044 69301485
By others 465259 5231218 3555305
By surrenders 174665186 95619378 82607186
Annuities 708405 677023 617740
Bonus in Cash 1196620019 766385540 376596797
Profit commission 15910755 27818187 18902430

3946587597 3476738025 2842866842
Expenses of management
Commission
(a) Commission to insurnce 540124285 443193569 506653082

agents(less that on reinsurnce)
(b) Allowances and comission 250390424 310388247 123821179
Salaries etc. 445029866 435148180 413390239

Traveling and conveynce 9153021 8620584 10798099
Director's fees 730250 1097500 1048000
Auditors' fees 491250 460000 1000000
Medical fees 1923163 1346224 2150635
Legal and proffesional fees 1945516 5227702 6507451
Insurance policy stamp 11186405 8945935 9395437
Advertisement and publicity 7974158 10603252 9406597
Printing and stationery 14916173 14852166 16624741
Office rent 70900276 90454290 84390181
Bank charges 38557347 42371015 43383914
Repairs and mintenance 10202270 9110628 5610590
Car fuelll, maintenance & repairs 30041349 27382636 27383272
Group insurance 5264082 5138256 5336752

Papers and periodicals 499063 470874 515950
v
Telephone, telex & electricity etc. 13685563 14882322 15080772
Training & recruitment expenses 1423934 1281641 1734769
fees & subscriptions 5657974 8727711 7050083

Donations 30000 1370819 4598268
Entertainment 352668 451574 2714139
Staff welfare 1658511 2123640 26383926
Insurance premium (general) 3574975 2442359 2190938
Postage & telegram 3174395 3196197 3362088
Uniform & liveries 894134 811302 841774
Development expenses 15942508 15799660 13199916
prize & awards 16168465 4407423 1137964
Conference 7569610 6845749 8180779
Company registration ( renewal) fees 18714127 17903772 18474420
Stamps 3174099 4341258 2147778

Staff transport expenses 1449589 2550724 2004020
AGM/EGM expenses 1816331 3693365 3352467
Silver jubilee 3933682 26242547
CDBL related charges 830617 8219993 1519002
1535446398 1517794249 1407631769
Other expenses
Depreciations 30839405 32240086
Provision for doubtful debts 12209336 50656
Reserve for unexpired risk 135638742 170747611 192184968
Provision for income tax 155700000 372355900
Appropriations
Dividend 356400000 945000000
Balance of the fund at the end of the 30529203492 28051818778 26331578112
year
Total 36689815634 34578903985 30774312347
vi

Internship Report On: Financial Analysis of Delta Life Insurance Company LTD

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Internship Report

Date of Submission: 10/09/2015

Mr. Mrinal Kanti Paul

Ahsanullah University of Science and Technology

Subject: Letter of Transmittal

Mrinal Kanti Paul

Ahsanullah University of Science and Technology

I would like to thank Harun-or-Rashid, AVP, Development, who providing me relevant

The development of a country depends up on the consolidate development of all infrastructures

1.1 Origin of the report........................................................................................................2

1.2 Objective of the Study...................................................................................................2

1.3 Scope of the study..........................................................................................................3

1.4.1 Sources of Data.....................................................................................................3

1.4.1.1 Primary Sources........................................................................................3

1.4.1.2 Secondary Sources....................................................................................3

1.5 Data Processing and Analysis........................................................................................3

2.1 Company History...........................................................................................................6

2.1.1 Industry Overview................................................................................................7

2.1.4 Values: TRUEST..................................................................................................8

2.2 Background of the Delta Life Insurance Company.......................................................9

2.3 Ordinary Life Insurance................................................................................................7

2.3.1 Popular Plans of Ordinary Life Insurance............................ ............................10

2.3.2 Policy Conditions...............................................................................................12

2.4.1 Target Group and the Product............................................................................14

2.4.2 Policy Documents..............................................................................................14

2.4.3 Micro Investment (Loan)...................................................................................15

2.5 Group Life Insurance..................................................................................................16

2.5.1 Traditional Scheme............................................................................................13

2.5.1.1 Short Term Contract...............................................................................17

2.5.1.2 Long Term Contract..............................................................................17

2.5 Health Insurance.........................................................................................................20

3. Tasks and Activities.........................................................................................................22

3.1 Tasks and Activities.....................................................................................................23

3.2.1 Underwriting (U/W) Department........................................................................23

3.2.2 Commission Department.....................................................................................24

3.2.3 Accounts Department...........................................................................................24

3.2.5 Policy Department................................................................................................26

3.3 Service Center..............................................................................................................26

3.3.1 Claims department..............................................................................................26

3.3.2 Alteration department.........................................................................................26

4.1 Ratio Analysis....27

4.1.1 Liquidity Ratios.....28

4.1.2 Leverage Ratios.........31

4.1.3 Profitability Ratios.... 36

4.1.4 Activity Ratios.......40

4.1.5 Market Ratios... 41

4.2 Common Size Analysis.44

4.2.1 Horizontal Analysis....44

4.2.2 Vertical Analysis....54

4.2.3 Trend Analysis....58

5. Findings and Recommendations...................................................................................61

1.2 Objective of the Study:

The main objectives of the study are-

To observe the daily activities of Delta Life Insurance Company Ltd.;

1.4.1 Sources of Data:

1.4.1.1 Primary Sources:

Observation of total service operation.

1.4.1.2 Secondary Sources:

Delta Life Insurance Company Ltd. Annual Report

Different books and periodicals related to the insurance sector

1.5 Data Processing and Analysis:

2.1.1 Industry Overview:

We will be the premier life Insurance Company in Bangladesh.