Swot Analysis on Reliance Insurance Bangladesh

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Overview, Swot Analysis, Profitability Analysis

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Swot Analysis on Reliance Insurance Bangladesh

  1. 1. Prepared& Presented By Kazi Mashfiq Uddin Ahmed ID: 100306003 Department of Business Administration
  2. 2. BACKGROUND OF FORMATION: • Following emergence of Bangladesh as an independent nation in 1971, insurance industry was nationalized along with banking and major industrial sectors of jute, textile, sugar and other heavy industries. Under the nationalized scheme, only two corporations in the name and style of Sadharan Bima Corporation (General Insurance Corporation) and Jiban Bima Corporation (Life Assurance Corporation) were set up by the Government for carrying on general and life insurance business respectively. Starting with gradual liberalization of investment in industry and commerce, insurance business was also allowed in the private sector From 1985. As a result, a number of companies were set up. RELIANCE INSURANCE LIMITED was the fourteenth in line to start general insurance business in the private sector. The Company was incorporated on 20th March 1988 and was allowed to commence business by virtue of the Certificate of Commencement of Business issued by the Registrar of Joint Stock Companies on 22nd March 1988. The Company obtained Certificate of Registration issued by the Controller of Insurance on 7th April 1988.The company was subsequently listed in the stock Exchanges of Bangladesh in 1995.
  3. 3. Corporate Vision • Company’s vision is to become the premier insurance organization and the insurer of first choice in Bangladesh with a sound reputation for dependability, professionalism and the highest standard of customer services. • Building profitable and socially responsible financial institution focused on Market and Business with Growth potential, thereby assisting Reliance Insurance Company and stakeholders to build a just, enlightened, healthy democratic and poverty free Bangladesh.
  4. 4. Corporate Mission • Grow significantly and achieve significant non- life insurance market share. • Continue delivering attractive returns to our shareholders. Become a caring organization and employer of choice. • Invest in top quality human resources and develop full potentials of employers by providing continued training and insurance education. • Bring innovation in insurance products and selling techniques. 
  5. 5. 1. Sustained growth in Small & Medium Enterprise sector 2. Continuous low-cost deposit Growth with controlled growth in retail assets. 3. Continuous endeavor to increase non-funded income 4. Achieve efficient synergies between the Insurance Company’s branches, SME unit offices and Reliance Insurance Company field offices for delivery of remittance and Insurance Company ’s other products and services. 5. Manage various lines of business in a full controlled environment with no compromise on service quality. 6. Corporate Assets to be funded through self-liability mobilization. Growth in Assets through syndications and investment in faster growing sectors.
  6. 6. Objectives • The objectives and principles of Investment operations of the Insurance Company  are: • To invest fund strictly in accordance with the principles of Islamic Sharia’ah. • To diversify its investment portfolio by size of investment, by sectors (public & private), by economic purpose, by securities and by geographical area including industrial, commercial & agricultural.
  7. 7. • To ensure mutual benefit both for the Insurance Company and the investment-client by professional appraisal of investment proposals, judicious sanction of investment, closes and constant supervision and monitoring thereof. • To make investment keeping the socio-economic requirement of the country in view.
  8. 8. Particulars 2010 2009 2008 2007 2006 Gross Premium 1241.00 1,041.13 1,101.53 827.53 743.83 Net Premium 618.07 430.25 453.20 353.66 293.18 Net Claims 137.68 105.09 103.68 85.60 70.92 Investment & Other Income (Gross) 153.68 114.94 61.14 42.42 43.02 Underwriting Profit 161.00 56.78 96.32 76.56 45.10 Net Profit before tax 287.23 146.30 137.93 100.68 70.18 Paid –up Capital 304.20 234.00 180.00 150.00 150.00 Total Reserves 1114.55 821.63 637.68 543.98 505.40 Total Assets 2262.94 1,880.29 1,467.92 1196.97 1065.80 Cash & Bank Balances 791.88 759.87 598.82 463.12 350.68 Investment in share & debenture 330.36 190.52 198.53 169.52 171.86 Dividend in Percentage cash) Dividend in Percentage Bonus) - - - - - 30% - 20% 15% - Earning Per Share 71.55 51.71 59.97 44.26 34.78 Book Value Per Share 384.64 407.03 382.33 101.83 101.00 Shareholder Equity 1170.09 952.44 688.20 152.75 151.72 Number of Employees 335 325 305 279 283 RELIANCE AT A GLANCE
  9. 9. NATURE OF BUSINESS: The Company carries on the business of all types of insurance except life assurance. It has now 32 (thirty two) branches, one local office with the Head Office at Dhaka. The Company's main business operations are being carried out in the following areas: (a)Underwriting of Fire Insurance. (b)Underwriting of Marine (Cargo & Hull) Insurance. (c) Underwriting of Motor Insurance. (d)Underwriting of Overseas Mediclaim & Holiday Insurance. (e)Underwriting of Miscellaneous Insurance. (f) Underwriting of Public Issue of Shares & Debentures. (g)Investment of Shares & Debentures.
  10. 10. Mr. Shamsur Rahman is a member of the Board of Directors and former Chairman of Reliance Insurance Limited. He is a Director of Bangladesh Lamps Limited (licensed manufacturers of PHILIPS lighting products), Mediastar Limited (Publishers of Prothom Alo), Mediaworld Limited (Publishers of The Daily Star), ABC Radio (FM Radio Station). Mr. Rahman is a Director and current Chairman of Reliance Insurance Limited. MR. SHAMSUR RAHMAN Chairman, Reliance .:: Chairman's Profile
  11. 11. Managing Director & CEO Akhtar Ahmed, ACII Executive Director Enamul Haque Khandker, FIPM Head, HR & Administration Division Md. Khaled Mamun, ACII Head, Specialized Underwriting and Marketing Deputy Executive Director Md. Anisur Rahman, MBA, ABIA, DAIBB Head, Operations Md. Sabir Ahmed, FCA, FCS CFO and Company Secretary Deputy Executive Vice President Shahadat Hossain Chief, Reinsurance Md. Israfil Chief, Branch Co-ordination & Development Golam Sarower Incharge, Internal Audit & Control
  12. 12. Senior Vice President Md. Jashim Uddin Chief, Accounts Nirmal Chandra Roy Chief, New Product & Services Md. Nazrul Islam Chief, HR & Admin Deputy Senior Vice President Md. Mahbubur Rahman (Anis) In-charge, Information Technology Md. Masud Rana Chief, Finance Vice President Kazi Altaf Hussain Chief, Specialized Underwriting Abdul Motin Chief, Policy Issuing Section Syed Qayem Hussain Chief, Marketing Services & Health Plan Asiqur Rahman Chief, Claims Dept Deputy Vice President Md. Zahurul Haque Chief, Share Deptt Md. Abul Kalam Azad Chief, Software-IT Division Shamsul Alam Chief, Hardware- IT Division Assistant Vice President Lutful Jewel Chief, Admin & General Service Deptt
  13. 13. Organ gram
  14. 14. .:: Products of RELIANCE Fire Insurances: • Fire Insurance (including Allied Perils) • Industrial All Risks (IAR) • Property Damage All Risks (PDAR) Marine Cargo Insurances : • Marine Cargo Insurance transit by Steamer or Powered Vessel • Marine Cargo Insurance transit by Rail/Lorry/Truck • Marine Cargo Insurance transit by Inland Rail or Road • Marine Cargo Insurance transit by Inland Cargoes (water borne) • Marine Cargo Insurance transit by Air Cargo
  15. 15. Marine Hull Insurance •Total Loss Only (TLO) •Institute and Inland Time Clauses Hull (ITC) Engineering Insurances •Machinery Insurance (Machinery Breakdown) •Deterioration of Stock (DOS) •Boiler and Pressure Vessel (BPV) •Electronic Equipment Insurance (EEI) •Contractor's All Risks (CAR) •Work Plant (WP) •Oil & Gas Well Drilling Equipment Package (OGD) •Contractors Plan & Machinery (CPM) •Hotel Owners All Risks (HOAR)
  16. 16. Miscellaneous Insurances •Burglary •Cash in Safe •Cash in Transit •Cash on Counter •Cash in Premises •Fidelity Guarantee •All Risks •Personal Accident •Personal Accident (air Travel) •Product Liability (PRL) •Public Liability (PL) •Workmen's Compensation •Employers Liability •Marine Terminal Operators Liability (MTOL) •Commercial General Liability (CGL) •Comprehensive General Liability •Hole in One Insurance/Event Cover •Business Interruption •Overseas Medical and Holiday Insurance including Study and Employment •Health Plan Scheme ( Hospitalization) •Critical Illness
  17. 17. Motor Insurances •Motor Insurances for Motor Cycle/ Scooter •Motor Insurances for Private Vehicle •Motor Insurances for Commercial Vehicle
  18. 18. Community Company aim to be a good corporate citizen and to work in partnership with the community. They have participated while the nation in a crises of natural disaster. Customers Company determines customer’s needs and have a commitment to provide high quality services to meet them. Environment The Company reports annually our direct and indirect contributions to improving the environment. Health & Safety Company is committed to provide a healthy and safe working environment for our staff and visitors. Human Rights Company respects the Universal Declaration of Human Rights and are guided by its principles. The company strictly follows non-discriminatory policies in all its procedures such as recruitment and promotions and has in place a performance management system that rewards employees based on merit and contribution. Standards of Business Conduct Company is committed to ensuring our business is conducted in all respects according to high ethical, professional, and legal standards and follows good corporate governance practices. Suppliers The Company’s suppliers are carefully assessed and approved against established criteria. Suppliers are managed as partners in our operations and we arrange seminars with surveyor companies to improve communication and provide technical skills training. In addition, to ensure compliance with our high service quality standards, satisfaction surveys are conducted regularly to measure service performance. Workforce The Company holds a biannual Employee Focus Survey, which focuses on the drivers of business performance, in particular employee engagement and customer focus. The company's aim is to be as an employer of choice by engaging its staff and providing them with the necessary skills and opportunities to contribute to the company's success and fulfill their potential. .:: Corporate Social Responsibility
  19. 19. .:: Services Our Services to the customers & Complaints and Suggestions: Services to the customers: Striving for customer service excellence has always been our first priority at Reliance Insurance Limited. Our customers' needs, including the location and size of our customer operations, are at the center of our business management and planning processes; from the design and formulation of insurance policies, to the definition of claims procedures. Our goals are to always attend to walk-in customers with regards to enquiries, purchasing new classes of insurance, renewal of insurance and issuing cover notes and receipts; to guide customers on claims procedures; to provide complete product information to customers for their better understanding; and to make recommendations to customers in order for them to make an informed choice. We are committed to customer service excellence and our mission is backed by investment Complaints and Suggestions Whilst we strive for customer service excellence, a complaint department has been established by Marketing Services Department. If you wish to make a complaint or suggest ways we can improve our services, we are hereby ready to assist.
  20. 20. 0 100 200 300 400 500 600 700 Net Premium Analysis in Taka Bdt. (crore) 2010 2009 2008 2007 2006 Net Premium Analysis 6 1 8 . 0 7 4 3 0 . 2 5 4 5 3 . 2 0 3 5 3 . 6 6 2 9 3 . 1 8
  21. 21. 0 20 40 60 80 100 120 140 160 180 Underwriting Profit in Crore 2010 2009 2008 2007 2006 Underwriting Profit Analysis 161.00 crore 56.78 crore 96.32 crore 76.56 crore 45.10 crore
  22. 22. 0 100 200 300 400 500 600 700 800 900 Cash & Bank Balances Analysis in Taka Bdt. (crore) 2010 2009 2008 2007 2006 Cash & Bank Balances Analysis 7 9 1 . 8 8 7 5 9 . 8 7 5 9 8 . 8 2 4 6 3 . 1 2 3 5 0 . 6 8
  23. 23. 2010 2009 2008 2007 2006 335 325 305 279 283 Number of Employees
  24. 24. 0 500 1000 1500 2000 2500 Total Assets in Taka Bdt.(Crore) 2006 2007 2008 2009 2010 2262.94 crore 1,880.29 crore 1,467.92 crore 1196.97 crore 1065.80 crore Total Asset Balances
  25. 25. 0 50 100 150 200 250 300 350 400 450 book value per share in Taka BDT. 2010 2009 2008 2007 2006 384.64 407.03 382.33 101.83 101.00 Book Value Per Share Analysis
  26. 26. 0 10 20 30 40 50 60 70 80 Earning Per Share in Taka BDT. 2006 2007 2008 2009 2010 34.78 Tk 44.26 Tk. 59.97 Tk. 51.71 Tk. 71.55 Tk. Earning Per Share Analysis
  27. 27. SWOT Analysis STRENGTH Weaknesses Opportunities Threats Strong corporate identity Strong employee bonding and belongings Huge Capital High charges of L/C Discouraging small entrepreneurs Absence of strong marketing activities Distinct operating procedures Country wide network Increasing industries Wide Area of business Upcoming Insurance Company’s/ Branches Similar products are offered by other Insurance Company s Political In Sustainability Changes in regulation and Government Policies
  28. 28. Strengths • Strong corporate identity: According to the customers, Reliance Insurance Company  Insurance Company is the leading provider of financial services identity worldwide. With its strong corporate image and identity, it has better positioned itself in the minds of the customers. This image has helped Reliance Insurance Company  Insurance Company  grab the personal Insurance Companying sector of Bangladesh very rapidly. Strong employee bonding and belongings: Reliance Insurance Company Insurance Company employees are one of the major assets of the company. The employees of Reliance Insurance Company Insurance Company have a strong sense of commitment towards organization and also feel proud and a sense of belonging towards Reliance Insurance Company Insurance Company. The strong organizational culture of Reliance Insurance Company Insurance Company  is the main reason behind its strength.
  29. 29. Huge Capital & Assets: Reliance Insurance Company has huge Amount of reserve Assets and a large Amount of Capital. So They are Very much capable for investing into the large business sector. Reliance is Capable to run and support wide range of businesses. Weaknesses High charges of L/C: Presently Reliance Insurance Company Insurance Company charges same rates for all types of import L/C. But for import L/C of exports-oriented industry, Reliance Insurance Company Insurance Company should reduce the charge of L/C. As a result, exporter will be benefited and the country will earn more foreign exchange. The commission often even rises up to 30%.
  30. 30. Discouraging small entrepreneurs: Reliance Insurance Company Insurance Company provides clean Import Loan to most of its solvent clients. But they usually do not want to finance small entrepreneurs whose financial standing is not clean to them. Absence of strong marketing activities: Reliance Insurance Company Insurance Company currently don't have any strong marketing activities through mass media e.g. Television. TV ads play vital role in awareness building. Reliance Insurance Company Insurance Company has no such TV ad campaign. Although they do a lot of CSR activities compared to other Insurance Company s.
  31. 31. Opportunities Distinct operating procedures: Repayment capacity as assessed by Reliance Insurance Company Insurance Company of individual client helps to decide how much one can borrow. As the whole lending process is based on a client's repayment capacity, the recovery rate of Reliance Insurance Company Insurance Company is close to 100%. This provides Reliance Insurance Company Insurance Company financial stability & gears up Reliance Insurance Company Insurance Company to be remaining in the business for the long run. Country wide network: The ultimate goal of Reliance Insurance Company Insurance Company is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase Reliance Insurance Company Insurance Company profitability but also will secure its existence in the long run.
  32. 32. Increasing industries In Bangladesh Number of industries are establishing day by day and these are a great opportunities for expanding the business for Reliance. The export and import oriented sectors and businesses are widening up in Bangladesh. Entrepreneurships are expanding and these are great opportunities for expanding the businesses for Reliance. Wide Area of Business: In our country the business sectors are wide and varities are there. The Range of business is Wide cause number of sectors are there to involve. Because different types of industries are establishing Day by Day. So it’s a great opportunity to grab these sectors and to enter these sectors by capturing these entrepreneurs.
  33. 33. Threats: Upcoming Insurance Company s/Branches: The upcoming private, local, & multinational Insurance Company s posse’s serious threats to the existing Insurance Companying network of Reliance Insurance Company. It is expected that in the next few years more commercial Insurance Company s will emerge. If that happens the intensity of competition will rise further and Insurance Company s will have to develop strategies to compete against and win the battle of Insurance Company s. Similar products are offered by other Insurance Company s Now-a-days different foreign and private Insurance Company s are also offering similar type of products with an almost similar profit margin. So, if all competitors fight with the same weapon, the natural result is declining profit. Political In sustainability: Due to the political In sustainability the situation of the country doesn’t remains stable. And this is a great threat for expanding or operating the business activities. If political violence continues the overall situation of the economy goes down and economic growth begins to slow down. And this is a great threat for expanding the business.
  34. 34. Changes in Government Policies and Regulatory Authority Changes In government policies are a great threat for the business. New policies or changes in tax patterns cause a great threat for the business. Besides that the New policies taken by IDRA ( Insurance Development & Regulatory Authority Bangladesh) are also a great threat for the business. As for example: now a days Commission system has reduced to only 15% By IDRA for which company is loosing their customers. Besides that increase in government Taxes and VAT are also the threats. Recommendations Good Communication has to be build up to grab the new customers and also with the existing customers. Marketing Sectors should be developed more strongly by providing skilled and efficient employees. More Dynamic and efficient employees should be hired or appointed to the marketing sector. E-Business facilities should be widen up. Premium charges should be more favorable.
  35. 35. Conclusion • A lot of new commercial Insurance Company has been established in last few years and these Insurance Company s have made this sector very competitive. So new Insurance Company’s have to organize their operations according to the need of the market. Insurance Companying sectors no more depends on a traditional method of Insurance Companying. In this competitive world, this sector has trenched its wings wide enough to cover any kind of financial service anywhere in this world. The major task for Insurance Company s to survive in this competitive environment is by managing its assets and liabilities in an efficient.

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