1. PREMIER UNIVERSITY
CORPORATE CULTURE IN BANGLADESH,
THE STUDY IN INSURANCE INDUSTRY.
Submitted to
Prof. Dr. Mahfujul hoque chy
Lecturer in premier & Chittagong University
Submitted by, Group-(3)
1. Md.Ismail sohel (Leader) - 3048
2. Ahmed shazed sultan-3072
3. Kalpita prasun talukder-3067
4. Taslima begum-3060
5. Md.Ashraful hoque shohel-3059
6. Tanjina akther- 3030
7. Ananna barua shami-2864
2. Introduction:
The system of shared beliefs, values, customs, and artifacts that the members of society
use to copy with their world and with one another, and that are transmitted from gene
ration through learning.
Corporate culture:
Corporate culture is the total sum of the values, customs, traditions and meanings that
make a company unique. Corporate culture is often called âthe character of an
organizationâ since it embodies the vision of the companyâs founders. The values of a
corporate culture influence the ethical standards within a corporation, as well as
managerial behavior.
Senior management may try to determine a corporate culture. They may wish to impose
corporate values and standards of behavior that specifically reflect the objectives of the
organization. In addition, there will also be an extant internal culture within the
workforce.
Insurance industry:
The basics of insurance are simple - one company offers a guaranteed future payment for
a contracted event. The company offering the guarantee charges a premium for insuring
against the event's occurrence - in doing so, the insurance company is protecting the
client against certain circumstances, says physical capital loss due to a natural disaster.
The insurance company assumes all financial responsibility associated with the clientâs
losses.
Principles of insurance:
Insurance is based on the following two principles:
⢠Principles of co-operation: In insurance the loss is shared by the group of people
who are willing to co-operate.
⢠Principles of probability: The loss in the shape of premium can be distributed only
on the basis of theory of probability. The probability tells what the chances of
losses and what will the amount of losses.
Insurance background of Bangladesh:-
Insurance is not a new idea or proposition to the people of Bangladesh. About half a
century back, during the British regime in the then India. Some insurance companies
started insurance business, particularly life, in this part of world. Since 1971, the
government. In order to make available the fruit of liberation to the general mass
nationalized the insurance industry along with the banks in 1972 by presidential order
No.95. By virtue of this order, save and accept postal life insurance and foreign life
insurance companies (other than the Pakistan companies), all companies and organization
transacting all types of insurance business in Bangladesh came under this nationalization
3. order. At the same time, five insurance corporations were initially established by the
government, viz, jatiya Bima Corporation (National Insurance Corporation), teesta Bima
Corporation (teesta Insurance Corporation), karnaphull Bima corporation (karnaphull
insurance corporation), Rupsa jibon Bima corporation(Rupsa life insurance
corporation)and Magna jibon Bima corporation( Magna life insurance corporation).
On 14th
may, 1973 the insurance corporation Act VI, 1973 was enacted under which the
previous five corporations were abolished and the following two corporations emerged:-
ď Sadharan Bima corporation for general insurance and ,
ď Jibon Bima Corporation for life insurance in Bangladesh.
CURRENT INSURANCE MARKET ENVIRONMENT IN BANGLADESH:
After the emergence of the peopleâs republic of Bangladesh in 1971, the government
nationalized the insurance industry along with the banks in 1972 by presidential order No
95. By the virtue of this order, all companies and organization transacting all types of
insurance business in Bangladesh came under this nationalization order. This was
followed by creation of five insurance companies in the life and non-life sector. Further
changes were brought on 14th
May, 1973. Through the enactment of Insurance
Corporation Act VI, 1973 which led to creation of two Corporations namely Sadharan
Bima Corporation for general insurance and, Jiban Bima Corporation for life insurance in
Bangladesh. In other words Sadharan Bima Corporation (SBC) emerged on 14th
May,
1973 under the Insurance Corporation Act (Act No. VI) of 1973 as the only state owned
organization to deal with all classes of general insurance & re-insurance business
emanating in Bangladesh.
Thereafter SBC was acting as the sole insurer of general Insurance till 1984. Bangladesh
Government allowed the private sector to conduct business in all areas of insurance for
the first time in 1984. The private sector availed the opportunity promptly and came
forward to establish private insurance companies through promulgation of the Insurance
Corporations (Amendment), Ordinance (LI of 1984) 1984.
PRODUCTS AND SERVICES OF INSURANCE INDUSTRY
⢠INSURANCE PRODUCTS
⢠FIRE INSURANCE POLICY
⢠MARINE HULL INSURANCE POLICY
⢠MARINE CARGO INSURANCE POLICY
⢠MOTOR INSURANCE POLICY
⢠HOUSE HOLDER COMPREHENSIVE INSURANCE POLICY
⢠PRODUCT LIABILITY INSURANCE POLICY
⢠BURGLARY INSURANCE POLICY
⢠CONTRACTORâS ALL RISK POLICY
⢠ENGINEERING INSURANCE POLICY
4. ⢠PUBLIC LIABILITY INSURANCE POLICY
⢠AVIATION INSURANCE POLICY
⢠WORKMENâS COMPENSATION POLICY
⢠CASH IN SAFE INSURANCE POLICY
⢠CASH IN TRANSIT INSURANCE POLICY
⢠CASH ON COUNTER INSURANCE POLICY
⢠PERSONAL ACCIDENT INSURANCE POLICY
⢠PEOPLES PERSONAL ACCIDENT INSURANCE POLICY
⢠DREAD DISEASE INSURANCE POLICY
⢠OVERSEAS MEDI-CLAIM (BUSINESS & HOLIDAY) INSURANCE
⢠OVERSEAS MEDI-CLAIM (EMPLOYMENT & STUDY) INSURANCE
⢠EXPORT CREDIT GUARANTEE INSURANCE
⢠LIVESTOCK INSURANCE POLICY
⢠ALL RISK INSURANCE POLICY
⢠FIDELITY GURANTEE POLICY
PROBLEMS OF INSURANCE BUSINESS IN BANGLADESH
ď° Social Problems:
ď§ Centralization: Most of the insurance companies in our country are located
in urban areas and there are few branches in rural areas.
ď° Economic Problems:
ď§ Poor economic condition
ď§ Poor financial position of the insurance companies
ď§ Higher cost of business
ď° Political Problems:
ď§ Political instability
ď§ Lack of proper supervision from the government.
ď§ Problem of planning and administration.
ď° Legal Problems:
ď§ Too much complexity
ď§ Bureaucratic tangles
ď° Other Problems:
ď§ Lack of qualified officials
ď§ Lack of exposure
ď§ Absence of business ethics
ď§ Lack of motivation program towards public
ď§ Lack of information technology
5. PROSPECTS OF INSURANCE BUSINESS IN BANGLADESH
⢠Higher GDP
⢠Increased population
⢠Development of new policy
⢠Scope in non-traditional sector
⢠scope of investment
⢠Agriculture sector
⢠Business sector
⢠Real estate sector
⢠education sector
COMMENTS & SUGGESTIONS:
From the above discussion we can realize that the policy makers within the government
and the insurance company should adopt effective measures in order to make good use of
opportunities and to tackle the threats of ensuring a healthy development of the insurance
industry. The following actions are suggested:
o The insurance companies of Bangladesh should practice marketing
through use of promotional tools such as advertising, sales promotion,
public relation, publicity, personal selling and direct marketing.
o Arrangement of training for insurance personnel.
o Streamlining the services and claim settlement process to overcome the
dissatisfaction of the customers.
o Government should have regulatory body for the surveillance of insurance
companies so that they must perform their business marinating the ethical
standards properly.
o Setup branches in rural areas for maximum coverage.
o Growing awareness through corporate social responsibility (CSR)
Conclusion:
We have described briefly corporate culture and its effect in insurance. Various sides of
insurance and corporation culture are discussed as simply as possible.
References:
ď§ Black, Richard J. (2003) Organizational Culture: Creating the Influence Needed for
Strategic Success, London UK.
ď§ Bligh, Michelle C. (2006) "Surviving Post-merger âCulture Clashâ: Can Cultural
Leadership Lessen the Casualties?" Leadership, vol. 2: pp. 395 - 426.
6. ď§ Kotler, John. 1992 Corporate culture and Performance, Free Press;
ď§ C. Kulp and J. Lhall, Casualty insurance 4th
edition 1968.
ď§ This discussion is adapted from Mehr & Camackâ Principle of Insurance. 6th
edition.
7. ď§ Kotler, John. 1992 Corporate culture and Performance, Free Press;
ď§ C. Kulp and J. Lhall, Casualty insurance 4th
edition 1968.
ď§ This discussion is adapted from Mehr & Camackâ Principle of Insurance. 6th
edition.