Group Name: The Dynamic Eight

SL No Roll NO Name Signature

1 17133031 Sreekanta Saha

2 17133042 Rakibul Islam

3 17133044 MST. Hafsa Akter

4 17133046 Karthik Chandra Barmon

5 17133047 Mazharul Islam

6 17133050 MD. Sabbir Ahmed

7 17133063 Rakibul Hasan

8 15133065 Arafat Rahman

 Introduction
Insurance Industry is playing a significant role in the economic improvement of Bangladesh
through its risk sharing operations which motivate investment in many important businesses. The
government has now embarked on a reform program me in the insurance sector to promote a
vibrant insurance sector in our country. As a first step towards achieving the objective, the
Insurance Act, 2011 in replacement of the previous Insurance Act, 1938, and the Insurance
Development and Regulatory Authority Act, 2011 also has been passed for establishing a
stronger insurance sector in Bangladesh. The commitment of the government to promote
development of the insurance sector is of enormous consequence for its promising future. In
view of the pro-active policy support of the government that the sector has so far received in an
unstinted manner, we are certain that within the next few years we will be able to make insurance
a very important component of the country's financial system. This will go a long way for
eradication of poverty and promoting sustainable economic growth. Insurance serves a number
of valuable functions which are very different from those rendered by other types of financial
intermediaries. The indemnification and the risk pooling properties of non-life insurance
facilitate commercial transaction and the provision of credit by mitigating losses as well as the
measurement and management of risk. The availability of insurance enables risk-adverse
individuals and entrepreneurs to undertake higher risk and activities that yield higher rate of
return, promoting higher productivity and growth. 

Background
There were huge scopes to work in the area of this Assignment. Considering the dead line, and
exposure of the paper has been wide-ranging. The study “The role in economic development of
Insurance Business in Bangladesh” has covered overall scenario of problems and prospects of
insurance industry in Bangladesh. It has measured the living standard of mass people. We have a
chance to work on the financial sector used in modern economic world. By doing the
assignment, we are able to know that the importance of insurance business in the economy. In
the assignment we have showed how the insurance institution face the problems and how they
can overcome the problems in Bangladesh. And what will be the position of insurance business
in nearby decades.

Objectives
Primary objective:

The main objective of this report is to show the scenario of "Role of Insurance companies in
Bangladesh" at a glance.

Secondary objective:

 The research objectives regarding my term paper are – 

 To fulfill the requirement of the course curriculum.
  To find out some major problems of insurance in Bangladesh such as Social, Political,
Economical, Legal, Miscellaneous,
 To earn proper and right knowledge about the insurance business in Bangladesh.
 To know about general insurance & its classification.
 Problem behind the insurance industry future plan of it.
 To know the conditions under when claims are considered and the process of meeting
claim. 
 To know about their revenue, expenditure, profit, business policy, social work etc.
 To observe their development year by year.
 To earn knowledge about reinsurance business. 
 To know how they respond to different parties. 
 To know the importance and necessity of insurance in different sector.

Limitations
1. Preparing the term paper we have faced some obstructions which are:
2. Lack of necessary information in the journals and official publications of insurance
companies.
3. Lack of proper information in the websites of the insurance company.
4. Inexperience and time constraint is the limitation restricting this report from being more
detailed.
5. Secondary data has been collected from the hand books, magazines, whichmay biased to
the insurance business.

Definitions of Insurance Company

According to Investopedia, A business that provides coverage, in the form of compensation

resulting from loss, damages, injury, treatment or hardship in exchange for premium payments.
The company calculates the risk of occurrence then determines the cost to replace (pay for) the
loss to determine the premium amount.

A company, which may be for-profit, non-profit or government-owned, that sells the promise to

pay for certain expenses in exchange for a regular fee, called a premium. For example, if one
purchases health insurance, the insurance company will pay for (some of) the client's medical
bills, if any. Likewise, in life insurance, the company will give the client's beneficiary a certain
amount of money when the client dies. The insurance company covers its expenses and/or makes
a profit by spreading the risk of any one client over the pool of premiums from many clients.
 Types of Insurance Companies

There are many types of insurance companies. It is useful to be aware of the general types, since
the differences can impact the kinds of insurance that a business chooses to buy. The more
common categories of insurance company include:

 Captive insurance company: This is an entity that exists to underwrite the risks of its
parent owner. The concept can also be used to provide insurance for a group of
participating entities. The risk of loss is confined to the captive entity.

 Domestic: This is an insurance company that is incorporated in the state within which it
is domiciled. This entity is considered a domestic insurer within that specific state, and a
foreign insurer within all other states (though it can still be licensed to do business in
other states).

 Alien: This is an insurance company that is incorporated under the laws of another
country. It is considered an alien entity from the perspective of any other country within
which it does business.

 Lloyds of London: This is a business underwriting insurance under the authorization of

the English Parliament. These entities are more likely to issue coverage for more unusual
or high risk items, as well as the usual types of insurance.

 Mutual: The policy holders own this type of business, so earnings are distributed back as
dividends. Losses are not usually charged back to policy holders, based on the terms of
their insurance agreements.

 Stock company: This is an entity organized as a corporation, with shareholders. Any

excess earnings of this type of business may be distributed as dividends to the
shareholders.

An insurance company may also be classified by the type of insurance services that it offers. As
an example, a monoline company issues only a particular type of insurance, while a multiple line
company offers several types of insurance. Further, a financial services company can provide not
only insurance products, but also other types of financial services.

Essential Elements of Insurance Contract

This Act says that all agreements are the contract if they are made by the free consent of the
parties, competent to contract, for a lawful consideration and with a lawful object and which are
not at this moment declared to be void”.

The insurance contract involves—(A) the elements of the general contract, and (B) the element
of special contract relating to insurance.
The special contract of insurance involves principles:

1. Insurable Interest.
2. Utmost Good Faith.
3. Indemnity.
4. Subrogation.
5. Warranties.
6. Proximate Cause.
7. Assignment and Nomination.
8. Return of Premium.

So, in total, there are eight elements of the insurance contract which are discussed below:

General Contract

The valid contract, according to Section 10 of the Indian Contract Act 1872, must have the
following essentialities;

1. Agreement (offer and acceptance),

2. Legal consideration,
3. Competent to make a contract,
4. Free consent,
5. Legal object.

Offer and Acceptance

The offer for entering into the contract may come from the insured.

The insurer may also propose to make the contract. Whether the offer is from the side of an
insurer or the side of the insured, the main fact is acceptance. Any act that precedes it is the offer
or a counter-offer. All that preceded the offerer counter-offer is an invitation to offer. In
insurance, the publication of the prospectus, the canvassing of the agents are invitations to offer.

Legal Consideration

The promisor to pay a fixed sum at a given contingency is the insurer who must have some
return or his promise. It need not be money only, but it must be valuable. It may be summed,
right, interest, profit or benefit Premium being the valuable consideration must be given for
starting the insurance contract. The amount of premium is not important to begin the contract.
The fact is that without payment of premium, the insurance contract cannot start.

Competent to make the contract

Every person is competent to contract;

1. Who is off’ is an age of majority according to the law,

 2. Who is of sound mind, and
3. Who is not disqualified from contracting by any law to which he is subject?

A minor is not competent to contract. A contract by a minor is void excepting contracts for
necessaries. A minor cannot sign a contract. A person is said to be of sound mind to make a
contract if, at the time when he makes it, he is capable of understanding it and of forming a
rational judgment as to its effect upon his interests. A person who is usually of unsound mind,
but, occasionally of sound mind may .make a contract when he is of sound mind. Alien energy,
an undischarged insolvent and criminals cannot agree. A contract made by an incompetent
party/parties will be void.

Free Consent

Parties entering into the contract should enter into it by their free consent.

The consent will be free when it is not caused by—

(1) coercion,
(2) undue influence,
(3) fraud, or
(4) misrepresentation, or
(5) mistake.

When there is no free consent except fraud, the contract becomes voidable at the option of the
party whose consent was so caused. In the case of fraud, the contract would be void.

Legal Object

To make a valid contract, the object of the agreement should be lawful. An object that is,

(i) not forbidden by law or

(ii) is not immoral, or
(iii) opposed to public policy, or
(iv) which does not defeat the provisions of any law, is lawful.

In the proposal from the object of insurance is asked which should be legal and the object should
not be concealed. If the object of insurance, like the consideration, is found to be unlawful, the
policy is void.

Insurable Interest

For an insurance contract to be valid, the insured must possess an insurable interest in the subject
matter of insurance. The insurable interest is the pecuniary interest whereby the policy-holder is
benefited by the existence of the subject-matter and is prejudiced death or damage of the subject-
matter. The essentials of a valid insurable interest are the following:
 1. There must be a subject-matter to be insured.
2. The policy-holder should have a monetary relationship with the subject-matter.
3. The relationship between the policy-holders and the subject-matter should be recognized
by law. In other words, there should not be any illegal relationship between the policy-
holder and the subject-matter to be insured.
4. The financial relationship between the policy-holder and subject-matter should be such
that the policy-holder is economically benefited by the survival or existence of the
subject-matter and or will suffer economic loss at the death or existence of the subject
matter.

The subject-matter is life in the life insurance, property, and goods in property insurance,
liability, and adventure in general insurance. Insurable interest is essentially a pecuniary interest,
i.e., the loss caused by fire happening of the insured risk must be capable of financial valuation.
No emotional or sentimental loss, as an expectation or anxiety, would be the ground of the
insurable interest. The event insured should be one that if it happens, the party suffers financially
and if it does not happen, the party is benefited by the existence. But a mere hope or expectation,
which may be frustrated by the happening to some extent, is not an insurable interest.

Utmost Good Faith

The doctrine of disclosing all material facts is embodied in the important principle ‘utmost good
faith’ which applies to all forms of insurance. Both parties to the insurance contract must agree
(ad idem) at the time of the contract. There should not be any misrepresentation, non-disclosure
or fraud concerning the material. In case of insurance contract the legal maxim ‘Caveat Emptor”
(let the buyer beware) docs not prevail, where it is the regard of the buyer to satisfy himself of
the genuineness of the subject-matter and the seller is under no obligation to supply information
about it. But in the insurance contract, the seller, i.e., the insurer will also have to disclose all the
material facts. An insurance contract is a contract of uherrimae fidei, i.e., of absolute good faith
both parties to the contract must disclose all the material facts and fully.

Principle of Indemnity

As a rule, all insurance contracts except personal insurance are contracts of indemnity.
According to this principle, the insurer undertakes to put the insured, in the event of loss, in the
same position that he occupied immediately before the happening of the event insured against, in
a certain form of insurance, the principle of indemnity is modified to apply. For example, in
marine or fire insurance, sometimes, a certain profit margin which would have earned in the
absence of the event, is also included in the loss. In a true sense of the indemnity, the insured is
not entitled to make a profit from his loss.

Doctrine of Subrogation

The doctrine of subrogation refers to the right of the insurer to stand in the place of the insured,
after the settlement of a claim, in so far as the insured’s right of recovery from an alternative
source is involved. If the insured is in a position to recover the loss in full or in part from a third
party due to whose negligence the loss may have been precipitated, his right of recovery is
subrogated to the insurer on the settlement of the claim. The insurers, after that, recover the
claim from the third party. The right of subrogation may be exercised by the insurer before
payment of loss.

Warranties

There are certain conditions and promises in the insurance contract which are called warranties.
According to Marine Insurance Act, “A warranty is that by which the assured undertakes that
some particular thing shall or shall not be done, or that some conditions shall be fulfilled, or
whereby he affirms or negatives the existence of a particular state of facts.”

Warranties that are mentioned in the policy are called express warranties. Certain warranties are
not mentioned in the policy.These warranties are called implied warranties. Warranties which are
answers to the question arc called affirmative warranties. The warranties fulfilling certain
conditions or promises are called promissory warranties. Warranty is a very important condition
in the insurance contract which is to be fulfilled by the insured. On the breach of warranty, the
insurer becomes free from his liability.

Proximate Cause

The rule; is that immediate and not the remote cause is to be regarded. The maxim is “sed causa
proximo non-remold-spectator”; see the proximate cause and not, the distant cause. The real
cause must be seen while payment of the loss. If the real cause of loss is insured, the insurer is
liable to compensate for the loss; otherwise, the insurer may not be responsible for a loss.

Proximate cause is not a device to avoid the trouble of discovering the real ease or the common
sense cause. Proximate cause means the actual efficient cause that sets in motion a train of events
which brings about result, without the intervention of any force started and worked actively from
a new and independent source. The determination of real cause depends upon the working and
practice of insurance and circumstances to losses. A loss may not be occasioned merely by one
event. There may be concurrent causes or chain of causes. They may occur in a sequence or
broken chain. Sometimes, certain causes arc excepted by (the insurance contract and the insurer
is not liable for the accepted peril.

Assignment or Transfer of Interest

It is necessary to distinguish between the assignment of (a) the subject-matter of insurance, (b)
the policy, and (c) the policy money when payable. Marine and life policies can be freely
assigned but assignments under fire and accident policies, are not valid without the prior consent
of the insurers—except changes of interest by will or operation of law. Moreover, assignments
under fire and accident policies must be made before tine insured parts with his, interest. Once he
has lost interest, the policy is void and cannot be assigned. The life policies can be assigned
whether the assignee has an insurable interest or not. Life policies are frequently charged,
assigned or otherwise dealt with, for they are valuable securities. The marine policy is freely
assignable unless it contains terms expressly prohibiting assignment. It assigned either before or
after a loss. A marine policy may be assigned by endorsement thereon or in another customary
manner.

Return of Premium

Ordinarily, the premium once paid cannot be refunded. However, in the following cases, the
refund is allowed.

By Agreement in the Policy

The assured may pay a full premium while affecting the insurance but it may be agreed to return
it wholly or partly in the happening of certain events. For example, special packing may reduce
risk.

For Reasons of Equity

1. Non-attachment of risk: Where the subject-matter insured or part thereof, has never ten
imperiled, for example, term insurance with returnable premium where the premium is
returned to the policy-holder if death does not occur during the period of insurance.
2. The undeclared balance of on open policy: The policy may be canceled and premium
may be returned for short interest allowed provided there was no further interest in the
policy.
3. The payment of Premium is apportionable. The apportioned part of -the consideration is
refundable when a part of policy interest is not involved. For example, insurance may be
taken for a voyage in stages, each stage being rated separately. In such a case if some
stages are not completed the premium relating to the incomplete stage is returnable.
4. Where the assured has no insurable interest throughout the currency of the risk, the
premium is returnable provided the policy was not attached by way of wagering.

Present scenario of insurance business in Bangladesh

In Bangladesh, the Insurance business, after an early stage of dislocation, adventure and
experimentation through half a century has now being established as a nascent industry
distributed between the public and private sectors. Insurance business evolved in the Indian
subcontinent late in nineteenth century when several business companies started their business
and a few Christian missionaries began to operate mutual funds to serve their own community
members. From Bangladesh perspective insurance business was not a promising sector in its
early age but it is getting its pace day by day with the growth of overall economic condition of
the country. The privatization policy adopted in the 1980s paved the way for a number of
insurers to emerge in the private sector. This resulted in a substantial growth of premium
incomes, competition, improvement in services, and introduction of newer types of business in
wider fields hitherto untapped. Up to 2000, the government has given permission to 19 general
insurance companies and 10 life insurance companies in the private sector. Insurers of the
country now conduct almost all types of general and life insurance, except crop insurance and
export credit guarantee insurance, which are available only with the Shadharan Bima
Corporation. Numerous institutions, associations and professional groups work to promote the
development of insurance business in Bangladesh. Prominent among them is the Bangladesh
Insurance Association (formed on 25 May 1988) having 30members. It aims at promoting,
supporting and protecting the interests and welfare of the member companies. Another example
is Bangladesh insurance academy. Surveyors and insurance agents occupy a prominent position
in the insurance market of Bangladesh. The system of professional brokers has not yet developed
in Bangladesh. A total of 60 insurance companies are operating in Bangladesh till date. Of these
companies, 57 are private, two state-owned and one is foreign. Insurance Directorate, under the
Ministry of Commerce, is the regulatory-body of the country's insurance sector. At present there
are 44 general insurance companies running in Bangladesh. Many other private companies are
about to commence business.

Evolution or History Of Insurance

History of insurance refers to the development of a modern laws and market ininsuranceagainst
risks. In some sense we can say that insurance appears simultaneouslywith the appearance of
human society. We know of two types of economies in humansocieties: money economies (with
markets, money, financial instruments and so on) andnon-money or natural economies (without
money, markets, financial instruments and soon). The second type is a more ancient form than
the first. In such an economy andcommunity, we can see insurance in the form of people helping
each other. For example,if a house burns down, the members of the community help build a new
one.Shouldthesame thing happen to one's neighbour, the other neighbours must help. Otherwise,
neighbours will not receive help in the future.Separate insurance contracts (i.e.,ninsurance
policies not bundled with loans or other kinds of contracts) were invented inGenoain the 14th
century, as were insurance pools backed by pledges of landed estates.These new insurance
contracts allowed insurance to be separated from investment, a separation of roles that first
proved useful in marineinsurance. Insurance became far more sophisticated in post-
Renaissance Europe, andspecialized varieties developed.Toward the end of the seventeenth
century, London's growing importance as acentre for trade increased demand for marine
insurance. In the late 1680s, Mr. EdwardLloyd opened a coffee house that became a popular
haunt of ship owners, merchants, andships’ captains, and thereby a reliable source of the latest
shipping news. It became themeeting place for parties wishing to insure cargoes and ships, and
those willing tounderwrite such ventures. Today,Lloyd's of Londonremains the leading market
(notethat it is not an insurance company) for marine and other specialist types of insurance, butit
works rather differently than the more familiar kinds of insurance.

Top 10 insurance company in Bangladesh

According to the Insurance Companies Act, 1913, the insurance company is that any insurer
being a company, partnership or association which may be wound up. But, since 2010, the only
governing body for regulating and developing the insurance sector of Bangladesh is the
Insurance Development and Regulatory Authority of Bangladesh (IDRA).
As there are many companies in Bangladesh those who are doing the business, we try to order
them in the top ten. From life insurance to car and general insurance, there are almost all types of
insurance in Bangladesh.

1. American Life Insurance Company

One of the earliest insurance companies in Bangladesh is the American Life Insurance Company.
It starts its operation since 1952 in Bangladesh. Although it was an America based insurance
company, they have successfully adopted it to suits the needs and expectations of Bangladeshi
people. These have taken it at the top position in the country. Its new name is now Metlife
Bangladesh.

2. Jiban Bima Corporation

As one of the States owned Bima Corporation in Bangladesh, Jiban Bima Corporation, it has
branches all over the country in Bangladesh. The term ‘Jiban Bima’ has taken from the Bengali
language that means Life Insurance. And many people of Bangladesh prefer to buy policies from
Jiabn Bima as it’s a government organization.

3. Delta Life Insurance Company Limited

Among the private insurance company in Bangladesh, Delta Life Insurance is the first one and
working since 1984. Also, it’s the largest private insurance company in Bangladesh that has
broadened its range of works to abroad. And the company is founded for serving the nation in
insurance service that it can work all over the country.

4. National Life Insurance Company Limited

National Life Insurance is one of the largest insurance companies in Bangladesh, which has
spread across the country. To reach the entire insurable person in Bangladesh, this unique
insurance company started its journey. Apart from these, they are successful also with their direct
beneficial schemes and other offerings.

5. Shandhani Life Insurance Company Ltd:

By their ‘Micro Insurance’ segment, the Shandhani Life Insurance Company is creating a change
in the society. As the insurance company has been working for 25 years in Bangladesh it focuses
on the poor people and low-income people also for purchasing insurance and they provide
smaller insurance and low-cost insurance. This is because very soon it was able to get lots of the
customers of Bangladesh.

6. Meghna Life Insurance Co. Ltd

After establishing in 1996, the Meghna Life Insurance is providing the right price with the
modern facilities. This is one of the largest insurance companies in Bangladesh.

7. Takaful Islami Insurance Ltd:

As Bangladesh is an Islamic country, most of the people of this country are Muslims on focusing
this Takaful Islami Insurance started their journey. Also, they have many schemes, which are
based on Islamic rules. Since the company works in both sectors Life and Non-Life insurance, it
has successfully created a large network all over the country.

8. Pragati Insurance Co Ltd

Because the Pragati Life Insurance is the Non-life insurance company of Bangladesh, it provides
various schemes such as-

 Mediclaim Insurance,
 Accident Insurance,
 Building Insurance,
 Factory based Insurance,
 Aviation Insurance,
 Home Insurance etc

9. Padma Life Insurance Co. Ltd

Although the Padma Life Insurance Company is also an Islamic Insurance company in
Bangladesh, their plans are designed keeping security as well as growth aspects in mind.

10. Sunlife Insurance Co. Ltd

Sunlife Insurance has started its journey by focusing on customer security and benefits from
2000. And it’s working across Bangladesh with success. This is one of the popular insurance
companies in Bangladesh.

Payment of claim procedure of Insurance Company (Life, Fire, Marine)

Life Insurance

Death claim

1. Claim intimation
The nominee needs to inform the insurance company about the death of the insured as
soon as possible. The claim intimation should carry details like date, place and cause of
death.
2. Claim form
Once the death intimation is made to the insurance company, it will record the same and
 ask the claimants to fi ll up a death claim form and submit it along with a list of
documents.
3. Documents
The requisite documents are:
• Death certifi cate
• Original policy document
• Deed of assignments, if any
• Discharge form
If no nomination has been made, the claimant is required to attach proof that he is legally
entitled to make the claim.
4. Process
The insurance company will verify the claim and may ask for additional documents. If
the insurer is satisfi ed with the genuineness of the claim, it will inform the claimant
accordingly and pay the death claim amount.

Maturity & Survival Claims:

The payment by the insurer to the insured on the date of maturity is called maturity payment. The
amount payable at the time of the maturity includes a sum assured and bonus/incentives, if any.
The insurer sends in advance them intimation to the insured with a blank discharge form for
filling various details in it. It is to be returned to the office along with Original Policy document,
ID proof, Age proof if age is not already submitted, Assignment /reassignment, if any and Copy
of claimant’s Bank Passbook & Cancelled Cheque. Settlement procedure for maturity claim is
simple after receipt of completed and stamped discharge form from the person entitled to the
policy money along with policy documents, claim amount will be paid by account payee cheque.

Fire Insurance

Notice of Loss : When the loss. occurs due to fare, the known should give notice to the insurer.
There fore. insurer cannot be liable to meet a claim unless he receives a notice of claim from tie
insured Hence the insurer immediately after the occurrence of a fire should give a notice of loss
to the insurer to register the claim of loss by fare.

2. Evidence of Loss : The notice of loss should be accompanied by the evidence of loss, the time,
place and circumstances under which the loss (inured. He should mention the role played by him
to mitigate the loss. To claim the loss, the insured must have taken necessary stem to mitigate the
loss.

Formal Claim Form: On receipt of notice, the and. sends a claim form to be insurer The insured
should submit this form along with the details and evidence to be insurer to enable the insurer to
determine the claim. This form contains all details of the damaged property and the market value
of the damaged property sometimes the insured is required to send affidavit along with the claim
form.
4. Inspection of Loss. : After receiving the claim form, the loss is inspected by the experts known
as 'Surveyors' or 'Value’s'. The surveyors estimate tie value of loss and send their report to the
insurer, regarding. the nature and causes of fire They also carry out salvage   .

Orations and after taking account the value of salvage is reduced from the about if claim of the
insured agrees to retain the salvage with him.

5. Ascertainment in Loss : After inspection of the site of loss and other information collected, the
surveyors ascertain the total extant of loss to determine the liability of the insurer. While
ascertaining the loss the surveyors take into account the time of fare, number of policies taken
for the said subject-matter and cause of fire. then the surveyors calculate the loss according to the
conditions of the fire policy.

6. Average Clause : In ascertaining the value of loss, the surveys ' have to see that whether the
policy is subject to an average clause. If there is an average clause, the undamaged property is
also to be valued.

In case of average policy the insurer is liable to pay the only such proportion of the loss as the so
insured bears to the total value of the property. ' 

7. Estimation of Claim : If the fire occurs more the one time   ' the currency of one fire policy the
insurer is not liable to pay more the the maximum amount insured unless the insured has paid
extra premium. If the subject-matter of insurance has insured with more than one insurers, the
the claim is to be settled through the use of contribution clause and the liability of each insurer is
limited to a ratable proportion

. 8. payment of Claim : After ascertaining the amount of actual loss the surveyors take a
declaration from the insured regarding the acceptance of claim and the send the she along watts
their report to to: insurer. the insurer then verifies the claim as per the conditions of the policy
nod settles the claim in accordance with the term of fee click. the claim may be settled by cash
payment or replacement of insured property or reinstatement.

Marine Insurance

1. Notice to Insurer 
Intimating insurance company about the loss or damage of goods is the first step to be taken by
the insured under claim of Marine Insurance.

2. Reasonable Care
Ina marine Insurance, it is a condition of the policy that the insured and his agents should act as
if the goods are uninsured and should take all such measures and actions as may be reasonable
and necessary to minimize the loss or damage

3. Survey and Claim

Survey and claim is the next step to be followed under procedures and formalities to claim
Marine Insurance under export and import goods. In a Marine Insurance, at the time of taking
delivery, if any package shows signs of outward damage, insured or his agents must call for a
detailed survey by the ship surveyors and lodge the monetary claim with the shipping company
for the loss or damage to the packages. A certified marine surveyor can be appointed at the
location where damaged cargo is available.

4. Outward Condition
When the outward condition of the packages is apparent, the insured takes delivery
unsuspectingly. After reaching warehouse, one opening the packages, they find damages to
goods. In such an event, the insured and or agent should immediately inform the insurance
company and call for the ship surveyor for detailed survey.

5. Missing Packages
In case any package is found missing, the insured must lodge the monetary claim with the
insurance company and its baileys (shipping company) and obtain a proper acknowledgement
from them. This is one of the formalities to claim Insurance under import export of international
trade.

6. Time Limit
In a Marine Insurance, the time limit for filing suit against the shipping companies is one year
from the date of discharge of goods, which may change as per the rules and regulations of
insurer.
 7. Documents Required
The following documents are to be submitted by the insured to enable the insurance company to
settle the claims expeditiously :

 Original insurance Policy or Certificate.

 Copy of Billing Lading.
 Survey report / Missing certificate.
 Original Invoice and Packing List together with shipping specification or weight notes.
 Copies of Correspondence exchanged with the carriers or bailees.
 Claim Bill.

Factors affecting the rate of premium in terms of Insurance (Life, Fire,

Marine)
Life Insurance

Some of the criteria for determining your life insurance premiums are outside your control, while
others are things you can remedy with simple lifestyle choices. The following are some of the
biggest factors that insurers consider when pricing out policies:

1. Age – this is the number one factor behind life insurance premiums, so you’re better off
taking out a policy before it’s too late.
2. Gender - women, on average, live nearly five years longer than men, meaning they pay
longer so enjoy lower rates.
3. Smoking - puts you at a higher risk for all sorts of health ailments, so it’s a red flag for
insurance companies.
4. Health - a medical exam includes height and weight, blood pressure, cholesterol and
other key metrics. Some companies do offer no exam policies, but you can expect to pay
more.
5. Lifestyle – regular recreational high-risk activities involve risk, along with a few
professions, and if that’s you, you may pay more. i.e. skydiving, scuba diving, vehicle
racing.
6. Family medical history – it’s your gene pool and a family history of stroke, cancer or
other serious medical conditions may predispose you to these ailments and lead to higher
rates.
7. Driving record - the last 3-5 years carry the most weight, so if you’ve improved your
driving habits, you may benefit with a more favorable price.

Fire Insurance
 Insurers will determine the price of coverage after assessing the fire risks of your business—and
if you are at too a high risk, they may decline to issue you coverage at all. When insurance
companies perform inspections to determine a structure's fire rating, they will consider the
following factors:

1. Construction materials: Older structures or those made from highly-combustible

materials will naturally cost more to insure than structures made from fire-resistant
materials. The use of flammable materials in walls or stairways will likely impact the fire
rating, while installing fire-resistant interior walls and secure fire doors can lead to
discounts on premiums.
2. Fire protection measures: Owners can significantly lower their insurance costs and their
risks of a blaze by installing fire suppression systems such as automatic sprinklers, fire
extinguishers, and automatic alarms.
3. Location: Buildings in urban areas usually have better fire ratings than those surrounded
by trees or further away from municipal fire protection and response. Business will likely
have more positive fire ratings if they are located within 500 feet of a fire hydrant.
4. Occupancy: The uses of a building can greatly affect its fire rating, especially if there are
multiple businesses or tenants in the same property. If a retail shop shares one of its walls
with a restaurant, the restaurant’s high fire risk will impact the fire rating of the entire
building.
5. Exposure: Even if your business is the sole occupant of the structure, external fire
hazards can affect your fire rating. For example, if your business is located near a hotel,
lumberyard, industrial property, or sits close to another structure, you may share the
increased fire risks of nearby properties.

Marine Insurance

The premium cost will increase or decrease in accordance to the estimates made by the insurance
company. The premium is estimated on the basis of the following parameters:

 Nature of the goods

 Value of the goods
 Inherent risks your products may possess
 Route, construction, and type of the vessel
 Destination to which your goods will travel
 Any political risk, strike, riots, and civil commotion that could hamper the delivery of
goods
 Any inherent risk that your products may possess
 Historical Data of incidents with the insured and overall
Some of the parameters are explained below:
1. Natural forces: While some natural disasters are permanent, some are seasonal. Some
ports are also known for insufficient depth, absence of good anchorage and lack of protection
against tides.
2. Construction and type of the vessel: The quality and fitness of the vessel play an
important role. The underwriter would be keen to know the vessel with respect to its owner,
material used in construction, structural strength and adaptability to carry different types of cargo
and its age.
3. Nationality of the vessel: It is essential for the insurer to know because it discloses the
dependency of countries upon the ocean trade. The nationality of the vessel shows the
skillfulness of the masters and crew. Also, the premium rates depend on the age of the vessel,
risks covered and transit.
4. Policy conditions: Various clauses may be added to limit or increase the insurer’s
liability. Some policies may cover total loss, or some may cover the partial loss. On the basis of
the coverage, the premium will be decided.

Problems of Insurance Companies in Bangladesh

For the development of economic infrastructure of a developing country like Bangladesh, there is
a great role of insurance. But the insurance business in our country is not satisfactory. Though
insurance industry has very prospect in the economy but for some reasons it’s totally failed to
achieve its goal. If we want to know the reasons behind this hen we should look forward the
following according to Bangladesh General Insurance Company Ltd. In this report the major
problems in performing insurance business has been classified into some major criteria which are
social, economic, political, legal and other reasons. The actual problems are discussed in detail
within these criterions. Mainly these reasons are:
Social Problems
Less Public awareness: A vast majority of people especially in rural areas are left outside the
insurance coverage. This mainly results from the unawareness among the people. Even a large
portion of people don’t have the minimum idea of insurance. People are not aware of the benefits
from the insurance policy and a great number of people believe that insurance business is
nothing but cheating and assume that insurance policy is quite unnecessary. This negative
attitude from the people is lessening the importance of absorbing insurance policy in a large
extent.
Centralization: Most of the insurance companies in our country are located in urban areas and
there are few branches in rural areas. They think that they might have better scope for
performing their business as the economic condition of the urban is better than the rural areas.
They don’t think that the large number of our population reside in rural areas and if branches are
expanded in rural areas then the business can thrive if proper motivation policy is taken to aware
the mass people of the rural areas. Thus this centralization policy acts as an obstruction for the
growth of insurance business in our country.
Economic Problems
Weak Economy: The development of insurance business depends to the development of
economy of deferent sectors. But in Bangladesh there are many lacking to the development of
economy. Our export income in limited and 78%income come from cloths and nightwear sector.
So the types of economy are not suitable for insurance business. Bangladesh is one of the poorest
countries in the world and most of the people in this country live under extreme poverty level.
All of these people fight hard to earn their livelihood and are marginal in relation to the
expenditure with the income. It is quite impossible for them to save some money for future need.
Therefore they are quite unable to give the amount to the insurer which is called as premium and
regarded as safety or precautionary measures against any accident. The number of people who
can bear the premium to the insurance company is very few in regard to those mentioned above.
Therefore the overall poor economic condition is creating obstacle to flourish the insurance
business in Bangladesh.
Poor financial position of the insurance companies: Most of the insurance companies of our
country are facing financial problems. Recently government is trying to take initiative to close
some of the insurance companies because they are not maintaining the minimum standards. They
are investing their money in poor securities and business which is vulnerable regarding getting
back the money with profit. As a result most of the insurance companies are suffering from loss
years after years and for poor financial condition the insurance companies are also unable to
expand their branch which is a barrier for the growth of insurance business in Bangladesh.
Weakness in Industrial Sector:  BANGLADESH is an agricultural country; the industrial sector
of their country is poor. In our country 9.71% are industrial labor from the total labor force. In
2004-2005 industrial productivity was only 28.88%of the total national productivity. This
focuses the weakness of our industrial sector. So these types of weakness are one of the main
barriers of insurance business.

Political problems
Political instability: Political instability is a major problem in Bangladesh. For the instability in
politics, many disruptive situations are often created which are bad for any businesses. The
people who operate various businesses in our country often experience various types of
inconvenience in running their business. Insurance business is not an exception 0of this. Political
instability and inconsistency of political courses are a serious problem for the insurance business.
Lack of supervision from the government: Lack of surveillance from government ministry
encourages many insurance companies to follow some unethical practices like make harassment
to policy holder and showing less in the financial statement. This not only destroying the
reputation of the well-known insurance companies but also creates negative impact in the mind
of the people about insurance. Besides this government sometimes impose some conflicting rules
and regulation without discussing with insurance companies governing body. It creates conflict
among insurance companies with government and act as one of the main hindrances of growing
insurance business.
Other problems

Lack of capital:  The broadness of insurance business is helpful to survey. It needs to establish
many branches in different country. It requires lots of capital. But lack of capital in our country
creates the problem of insurance business.
Lack of skilled staff: There needed a lot of educated and skilled staff for insurance business. But
Insurance companies perform their activities by recruiting marketing agent and they try to
convince the people to take a policy. Most of the cases the agents are not properly trained and
they don’t know the right process to catch potential people to make their policy holders.
Therefore these field level agents are unable to fulfill their target and act as a constraint in the
insurance business. Lack of skilled and trained staff the insurance business in our country is not
wide.
Limitations of insurance knowledge: The scope of education about insurance is so much little in
our country. The education about insurance is very limited in syllabus of our primary and higher
education. It is a hindrance in our insurance business.
Lack of training:  The people who are concerned with insurance business are not trained. There
are no sufficient institutions in our country to give training to employees and entrepreneur.
Spread of insurance business in Bangladesh failed for lack of proper training by the employees
specially the field employees of insurance companies. Still there are not enough training centers
to provide proper training regarding insurance activities for the officials of insurance company.
Though there is one insurance training center in Bangladesh it totally failed to achieve its target
in insurance field.
Insufficient service: The insurers or companies are not able to give the proper services to the
insured people. In Bangladesh insurance company people failed to provide better service to the
mass people that’s why the people who want to take the insurance policy they loss their interest
from insurance. At same time in foreign country insurance workers goes to customer’s house and
offices regularly to aware themselves and influence them to take insurance policy. In that’s case
Bangladesh insurance company people are not that much expert. So the people are not interested
to involve themselves and their properties with insurance business.
When Promises Do Not Match Delivery: Customers perceived that organizations are delivering
low-quality service when a gap appears between promised levels of service and the service that
are actually delivered. This gap is created when advertising, personal selling or public relations
Over-promise or misrepresent service levels. Service delivery versus external communication
may occur as a result of inadequate horizontal communications and propensity to over-promise.
The discrepancy between customer expectations and employees’ perceptions: The discrepancy
between customer expectations and employees’ perceptions rely as a result of the differences in
the understanding of customer expectations by front-line service providers. 

Prospects of Insurance Business in Bangladesh

As well as the problems mentioned above, there are many good signs for the insurance business
in Bangladesh. The factors that can facilitate the insurance business in our country are discussed
below. These facts can be measured as the prospective fields for insurance business in
Bangladesh.
Increased population: There is a big opportunity lies ahead for the insurance companies as the
population of our country are increasing day by day. Although most of people of our country live
under extreme poverty level and want to avoid insurance policy number of potential policy
holders in Bangladesh is growing with growth of the population. There is somewhat relationship
between growing populations with the number of public vehicle. As we know all public vehicle
must have an insurance policy. So growing population also increase the motor insurance too.
That is growth in population opens greater scope for every kind of insurance business that results
in growing prospect for insurance companies.
Higher GDP: The GDP of our country is increasing than the previous years which results in
increase of per capita income. So this growing GDP and income holds bright prospects for
insurance companies. The major problem is the incapability of our people to pay the premium
charged by the insurance companies. . With the growth in the income more and more people are
now willing to take an insurance policy for safeguarding themselves from any danger.
Developing mass awareness about insurance: People are now much more conscious about
their safety. So they are encouraged to take an insurance policy for making their life free from
any unexpected occurrence. Increase in literacy rate is helping predominantly to create
awareness among the people regarding taking insurance policy. Besides these insurance
companies are also trying to eradicate the negative attitude of people towards the insurance
company by organizing various programs such as seminars, programs including social
responsibilities etc.
Micro insurance: Micro insurance can be a great prospective area for the insurance business in
our country. Most of the people of our country are unable to have costly and long term insurance
policies. Micro insurance can be provided to individual personnel or to small business owners
against little insurance premiums and with easy terms and conditions. When they will afford to
minimize their risks at a lower price, they will take that opportunity and they will become to get
used to it. This can cover a huge portion of the society who can be a prospective target market
for this business.
Health Insurance: The insurance companies of Bangladesh can be developed health insurance
policy as large scale like other developed and developing countries. That increases the scope of
insurance business in Bangladesh. Though there are some insurance companies created this at
small range but that not enough to meet the crying need of health insurance in nearby decades. 
Scope in non-traditional sector:
 Nowadays, along with traditional insurance services, they can offer various non-traditional
insurance services to their customer. Target market of insurance company may expand and they
can offer different types of non-traditional insurance services such as, personal accident
insurance, travel insurance, burglary insurance and pension scheme.
Scope of investment:
Insurance companies can usually make more profit from investment activities than from their
regular insurance business. The private insurance companies are realizing this fact and playing
role in the financial market. Insurance companies are making large investment in government
bonds, ICB projects and in private sector business. There are opportunities to enhance profit
through effective and efficient money management by employing capable and experienced
personnel. Scope of investment expansion persists in the areas leasing, housing, health and
money market.
Service diversification: Insurance is not just a tool of risk coverage. It is also an attractive
instrument of savings. The mixture of risk coverage with savings gives the opportunity for
innovative product designing which means service diversification. In a dynamic insurance
market one can expect to see new products being promoted at regular intervals. So far very little
efforts have been taken to innovative and introduce need oriented insurance services in response
to existing threats. The prospect of the insurance business in various sectors that affect our
economy can be differentiated in the following way.
Business sector: Nowadays in Bangladesh the SME plays an important role in the economic
development. But they are deprived from taking loans from bank for large amount. If insurance
business focuses this section in Bangladesh they are able to contribute more in the economy
.Thus insurance business has a bright prospect in business sector in a developing country like
Bangladesh
Education sector: Insurance companies can provide different types of scheme to expand
education plan insurance. In Bangladesh the higher educational facilities is not as rich as
developed countries. It is very costly except public sectors educational institutions. So, education
sector should create vast facilities for insurance business in future. Finally, if the above steps can
be taken, more and more people in Bangladesh will be interested in buying insurance.

Recommendations
In our country the problems that exist in insurance business cannot be overcome over aright .It
needs long term planning. Besides making the people aware the insurance businessman should
come forward with govt. to make this business famous. Coming from the existing problems
following steps should be taken to make this business famous.
Spread of insurance education: To make the insurance business people should be made aware
about the helpless & necessity of insurance. For this purpose effective steps must be taken too
speared of insurance education.
Publicity & increase of awareness:  We know by proper publicity it is easy to market anything.
Insurance is one type of unsought goods. So, people are not so much aware of it. High publicity
and insurance knowledge can led the people to make insurance policy more and more. Mass
publicity activities are very essential to overcome from unwillingness wrong idea, doubt &
unbelief of the people this country. The people media can provide an effective help regarding
country interest.
Increase of training facilities: To continue the insurance business effective standard training
facilities must be arranged for the manager & workers who are employed in this business.
Insurance business is very complex and technical. To perform this business properly, obviously
it needs vast knowledge regarding its performance. To achieve vast knowledge training has no
alternative. So training is very necessary to overcome problem in insurance.
Formulation of effective Principles: Long term formulation of effective principles is
compulsory to continue the insurance business successfully. To run the insurance smoothly, it is
mandatory to implement the principles strictly. If everyone follows principles and rules,
achieving goal is possible.
Uphold the interest of policy holder: Success of this type of business is depended on the trust
of insured persons. To gain the trust insurance companies should come forward to compensate
the real injured as soon as possible.
Govt. monitoring system: The private insurance companies are not so much aware about the
govt. rules and regulations. For this reason, sometimes unreal competition created in the market.
So, proper govt. monitoring system should be introduced. 
Now-a-days people of Bangladesh are so much aware of their future. They try their best level to
be insured themselves against any type of hazard. It is a good sign for insurance market in
Bangladesh. Every insurance company also tries to overcome the problems. So we can hope that
if the insurance company can overcome every problems regarding insurance marketing in
Bangladesh then the insurance marketing in Bangladesh will be facilitated.

Conclusion
In present insurance is too much important to the business and individual sector. Most of the
companies provide more or less same services. For this reason the competition is increasing day
by day between the insurance companies. On the other hand some new insurance companies are
going to start businesses in the competent market. BGIC need to develop their some productive
sectors. In present, a company cannot establish properly without developing information
technology. People search their desires requirement through Internet so, insurance companies
need to develop Web address to increase both foreign and local investors. So we have discussed
about both the problem and prospects of insurance business in Bangladesh. The progress of
insurance business depends on the progress of economic condition .Insurance business also faces
many problem. So if we develop economic condition as well as overcome the problems, it will
help a lot to flourish this business in our country. 

Bibliography
Books:
 “Elements of insurance” by Azizul Huq Chaudhuri,
 “Higher Banking & Insurance” by Khalekuzzaman
 “Principles and Practice of Insurance” by M.N. Mihsra.
Website:
 http://www.sbc.gov.bd  
 http://www.jbc.gov.bd
 http://www.bankersbd.com/bangladesh-insurance-company.html 
Other:
 ‘Annual Reports’ (2007 to 2011) Different Insurance Companies of Bangladesh. 
 Thoroughly Revised Edition 2010&2011Magazines and reports. 
 Bangladesh General Insurance Company Ltd, Annual Report 2010.
 Insurance Journal 1993 Insurance Journal 1997Banglapedia.