Overall Study of Meghna Life Insurance Company Limited

The purpose of this report is to get a clear picture about the current Insurance industry situation of Bangladesh and Meghan Life Insurance Company its brands situation in the market and satisfaction level of agent as well as Customers. This report discloses origin of insurance, market position, risk and review, financial report and requirement of general insurance business. Here discuss different department of Meghna Life Insurance Company Limited.

Introduction

This report is done on the basis of research in different department of Meghna Life Insurance Company Limited.

Meghna Life Insurance Company Limited 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.

The report discloses origin of insurance, market position, risk and review, financial report and requirement of general insurance business.

This is a formal internship report of Meghna Life Insurance Company Limited. There are approximately 44 General Insurance Companies including 17 Life Insurance Company and Meghna Life Insurance Company Limited is one of the most popular life insurance companies on the basis of premium income.

Insurance is nothing but a system of accepting risk of the Insured by the Insurer having consideration in the form of premium to safeguard his interest from any accident. In case of big risk the Insurer needs to transfer the risk to re-insurer. Re-Insurance means spreading of risk of one onto the shoulder of many. In brief, Re-Insurance means Insurance of Insurance. Whilst it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, insurance is a method or process which distributes the burden of loss on number of persons within the group framed for this particular purpose. The concept of grouping together or risk sharing was in existence in very ancient times but gradually developed in its present state through a process of evolution to meet the growing needs of the people in the field of general business and industries

The form of insurance is the concept of such a philosophy of grouping together or risk sharing developed in very ancient times. In the economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of insurance business with the different out look.

There are two types of insurance business are popular visualization.

1. General Insurance or Property and liability insurance.
2. Life Insurance.

Purpose of the Report

The purpose of this project is to get a clear picture about the current Insurance industry situation of Bangladesh and Meghan Life Insurance Company its brands situation in the market and satisfaction level of agent as well as Customers.

Methodology

The reports contain different types of policies and financial data, which clearly express the performance of the Meghna Life Insurance Company Limited.

Secondary source of the data and vital methodology for preparing this report the following methodology is used:

1. Collection of primary data.
2. Analysis of data.
3. Collected secondary data through text, publication, report, journal and internet etc.

How to Collect Data:

We have collected data through:

1. Primary source ( personal interview)
2. Secondary source ( text, journal, web sites, company report)

To conduct the project and analyze each insurance company in terms of their Quality of services, Commission of the agent, customer satisfaction, I have collected both the primary and secondary data.

Primary Data

Both qualitative and quantitative research technique were used to achieve research purpose.

Firstly, a series of interviews was conducted with Agent and Sales Partners of Meghan life insurance company Limited to know that the marketing policy of different company.

Secondly, based on the results of Interview a structured questionnaire was constructed for the qualitative research. A set of 100 questions was developed to collect the information regarding Brand situation (See Appendix to view a sample questionnaire).Most of the questions are open ended and used Liker Scale.

Agent of the company, marketing agent in different zones has been interviewed with this questionnaire. Those respondents are selected zone based.

In addition to that, research firm has also done interaction with the operators directly through front offices. Microsoft Excel was used for quantitative analysis graphically.

Secondary Data

Secondary data sources were the Internet, different published journals, news papers, privies report, other company report and magazines etc.

History of Insurance Business in Bangladesh

Insurance is not a new business in Bangladesh. Almost a century back, during British rule in India, some insurance companies started transacting business, both life and general, in Bengal. Insurance business gained momentum in East Pakistan during 1947-1971, when 49 insurance companies transacted both life and general insurance schemes. These companies were of various origins British, Australian, Indian, West Pakistani and local. Ten insurance companies had their head offices in East Pakistan, 27 in West Pakistan, and the rest elsewhere in the world. These were mostly limited liability companies. Some of these companies were specialized in dealing in a particular class of business, while others were composite companies that dealt in more than one class of business.

The government of Bangladesh nationalized insurance industry in 1972 by the Bangladesh Insurance (Nationalization) Order 1972. By virtue of this order, save and except postal life insurance and foreign life insurance companies, all 49 insurance companies and organizations transacting insurance business in the country were placed in the public sector under five corporations. These corporations were: the Jatiya Bima Corporation, Tista Bima Corporation, Karnafuli Bima Corporation, Rupsa Jiban Bima Corporation, and Surma Jiban Bima Corporation.

The Jatiya Bima Corporation was an apex corporation only to supervise and control the activities of the other insurance corporations, which were responsible for underwriting. Tista and Karnafuli Bima Corporations were for general insurance and Rupsa and Surma for life insurance. The specialist life companies or the life portion of a composite company joined the Rupsa and Surma corporations while specialist general insurance companies or the general portion of a composite company joined the Tista and Karnafuli corporations.

Regulatory frame work of insurance Business Principles of Regulation: Solvency regulation is one of the most important elements in the supervision of insurance companies. The purpose of formulation of appropriate regulation is to maintain efficient, fair, safe and stable insurance market for the benefit and protection of policy holders. International Association of Insurance supervisors (I.A.I.S) had approved several principles on Capital Adequacy and Solvency. Regulatory authority of Bangladesh may follow those principles while framing regulation of solvency margin.

Future regulation may contain the following:

(a) Insurance companies should publicly disclose appropriate qualitative and quantitative information about risk exposures and the components that make up their capital.

(b) Insurance companies ought to formulate and submit a methodology of effective internal control system.

(c) Insurance companies should adopt a comprehensive and appropriate risk management system, supported by a comprehensive monitoring and internal control system.

(d) Required minimum capital of an insurer should be reviewed on a regular basis and be enhanced gradually. Initial paid up capital may be enhanced to make it at par with the neighboring countries.

(e) Prudent accounting standards for life, non-life and tactful companies have to be set as the basis of valuation of assets, liabilities and off balance sheet exposures.

(f) Insurance companies should calculate technical provisions in a reliable and objective manner as prescribed by the regulator. Technical provisions should include allowance for outstanding claims and guaranteed benefits for policies in force, as well as expenses. Adequate provisions must be made for all other liabilities in so far us they are not included in the technical provisions.

Concluding Remarks: The capital adequacy and solvency regimes have to be sensitive to risk. Therefore, this has to be related to the risks faced by an insurer and should remain adequate at all times as the risk changes over time. The required solvency margin should also reflect risks not taken into account in valuing liabilities and requirements on assets. Regulatory authority, therefore, may ensure that an insurer makes adequate provisions for all of its liabilities. The assets of insurers also must be sufficiently diversified and spread and should secure liquidity of the insurance company. Objective and consistent valuation of assets is based on prudent and regimes should address the risk of loss arising from mismatches of the assets and liabilities of the insurer.

Insurance companies must be able to evaluate the risks that they underwrite and to establish an adequate level of premium. A lot of risks are involved in the business of insurers, such as risk of error, evaluation risk, reinsurance risk, operating expense risk, catastrophic risks, excessive growth risk, operational risk, market risks, investment risks etc. While assessing solvency position, the regulatory authority needs to take into account the strategy of risk management of insurer. It may be noted that sound and prudent management strategies to prevent, to monitor and to master risks are basics to maintaining a sound financial position.

There are varieties of ways in which minimum requirements can be imposed on insurance companies as noted here below:

a) The required minimum margin may be computed as a result of one or more fixed ratios of items on the insures account.

b) A minimum margin may be provided to determine an acceptably low probability of insolvency over some time horizon.

c) An insurer may be required to test its capital adequacy against a range of adverse scenarios defined in the regulations.

These systems are based on arbitrary acceptation of time horizon. An insurer operates within a certain socio-economical, political and cultural environment. To keep a solvent position, it needs to take into account of the risk a company is exposed to. If efficient control systems are in place to monitor risk exposure, a company will be able to adapt more quickly to a changing market situation. This means, the company may face a lower probability of ruin in a given time horizon dependent on its risk management system.

It is imperative that the regulatory authority imposes obligations on insurance companies, requiring to have efficient risk management systems in place and to provide for more transparency of their operations. The regulatory authority needs to examine the preventive measures that are available to the insurer for mitigating its risks. The regulatory body then may find out to what extent these preventive measures are supported or required by a regulatory frame work.

The regulatory body needs to examine the technical and others risks a company are exposed to, its operating performance, investment strategy and financial flexibility. The solvency margin should be considered as the last resort after all other measures taken by the insurance company to secure its financial stability have failed. It may be noted that financial analysis cannot be done by the regulatory without having enough people with the required skills. Experienced and qualified Chartered Accountants/Chartered Insurers need to be engaged by the regulatory body in order to ensure thorough examination and analysis of insurer’s financial statements.

Situation of Insurance Business at Present

Specific supervision of solvency, concerning the insurance companies, by the regulatory authority is most important. Practices differ from country to country. In New Zealand solvency or capital adequacy requirements are imposed on life insurance companies. Life insurance companies are required to submit accounts and the actuary’s report to the Government Actuary, who may decode and suggest that a company be placed under court supervision if he feels that its financial position appears fragile.

Non-life insurance companies in New Zealand are supposed to maintain a solvency margin of at least 20 per cent and get rated by approved Rating Agencies. The insurance market in New Zealand is largely regulated. However, other developed countries have specific and strongest regulations governing the supervision of insurance solvency. Throughout the continent of Europe, regulation of solvency supervision is largely harmonized. In Canada and in the United Sates the supervision of insurance solvency has the peculiarity of being regulated not only at the federal level but at the State or Provincial level as well.

Japan has introduced a risk-based solvency supervision system in 1997. The USA adopted risk-based capital adequacy standard in 1992.

The main risks taken into account when determining minimum regulatory solvency margins are technical risks and investment risks. Technical risks comprise of risks of miscalculating premium, technical provisions and the risk of underestimating operating expenses either due to accidental miscalculation or misrepresentation of available data. In some cases premiums can be set too low in order to attract customers. Excessive growth may also entail special risk when it is poorly coordinated.

The main investment risks are depreciation risk and liquidity risk. The basic approach to containing the depreciation risk and the liquidity risk is to apply the principle of diversification i.e. spreading the investment portfolio over reversal asset categories and dispersion. Assets representing the technical provision may be held in shares, bonds, securities, real estate, loans, investments etc. In addition to the principle of diversification and dispersion, principle of localization may also be applied. It may be noted that investment regulations are generally applied in calculation of the statutory solvency margin for life insurance.

Bangladesh Perspective: We know that the assets of an insurance company should at all times be sufficient to cover its liabilities. But the value and yield of assets are continuously influenced by market fluctuations. An interest rate change necessitates a new valuation of yields on the asset side and a new valuation of liabilities. The primary function of an insurer is to manage all its risks in such a way as to be able at all times to meet its commitments to the policyholders and beneficiaries. It is the capacity of an insurer to meet its commitments is known as solvency.

There is no general formula that can be applied across the countries for solvency margin requirement. In Bangladesh, regulatory body has not yet made solvency margin requirement or risk-based capital requirement as mandatory for the insurers. There is also no division between shareholders fund and policyholder’s fund. Presently for the life insurance companies in Bangladesh, the minimum capital requirement is Taka 75 million and for non-life insurance companies it is Taka 150 million, irrespective of the volume of insurance business that an insurer has and the associated risks for each class of assets and liabilities.

Bangladesh is perhaps one of the few countries where neither the risk based capital requirement nor the solvency margin requirement has been prescribed. Therefore, some of the insurance companies in Bangladesh are carrying on business without the required capital to ensure solvency as per the international standard and practices.

In Bangladesh, one multinational life company having the largest pie of market share is operating without the minimum statutory capital and some of the local insurance companies are carrying on business with capital much lower than the minimum required paid up capital. Minimum capital requirement in the neighboring countries is much higher in comparison to Bangladesh. In India, the minimum capital requirement is Indian Rupees 2000 million and in Pakistan it is Pakistani Rupees 500 million.

Current regulations of life insurance Accounts in Bangladesh provide that the value of assets set forth in the balance sheet should be shown at amounts not exceeding their realizable or market value, which need be ascertained from the published quotation or if these is no value, then it is fare value as between a willing buyer and a willing seller. There are no detailed guidelines in the current regulations as to how the items such as valuation of stocks and shares, outstanding premiums, claims due but not yet paid, overdue loans, are to be made. In the absence of specific guidelines, there is lack of uniformity in valuation of such items by life insurers. Policy liabilities are not also integrated with the annual accounts.

In the age of globalization, Bangladesh cannot remain isolated from the rest of the world. Non-insurance financial sector in Bangladesh, especially the banks are moving to adopt International Accounting Standard and financial reporting. Therefore, it is expected that new rules and regulations would be made for insurance sector after promulgation of the proposed new Insurance Act. Considering present situation and reforms required in the insurance sector, it is advisable that the regulatory body will frame specific insurance accounting principles, one for life and the other for non-life. The principles and or the standards should cover investments, premium, acquisition cost (agency commission, brokers commission) claim and reinsurance to ensure consistency in the presentation of financial statements.

For life business, solvency margin be determined based on mathematical reserve and capital at risk. The appointed actuary may be entrusted to determine the amount of solvency margin. For non-life business, solvency margin may be determined based on premium income or claims outstanding. Risk-based capital may be applied at a later Stage.

Problem of Insurance Business in Bangladesh

Physical Hazard:

Physical hazard indicate those dangers of the subject matter of insurance which can be ascertained or identified by mere inspection of the risk. The hazards are apparent in the subject-matter itself.

Marine:

The nature of the cargo, whether these are more susceptible to damage, fragile nature of the cargo like fish, or glass item which are more prone to breakage. Bad quality packing creates more losses.

Voyage itself may be hazardous particularly during monsoon period in our country.

The nature, construction, age, classification and condition of a vessel.

Fire:

Nature and construction of the building. Materials used in the construction and whether such materials are of combustible or non-combustible nature. The system of lighting and heating of the premises. Whether the electrical wirings are in good shape or worn-out. Whether the premises are kept clear. Rubbishes scattered here and there help fire to spread.

Indiscriminate smoking throughout the premises, particularly if it is a factory where inflammable materials are required to be kept, is in itself an example of physical hazard.

Whether the risk is situated near fire brigade, and whether internal fire fighting facilities are there within the premises.

Nature of occupation of the premises, if it is a petroleum or chemical trade the hazard will be more. Nature, construction, occupation of the adjoining premises because fire may travel from the adjoining premises to the insured premises.

Life:

Age and condition of health of the proposer. Family history of any hereditary disease, cancer, tuberculosis, blood pressure, heart disease etc.

History of any illness of the proposer. The occupation of the proposer.

For example: Publican’s factory workers etc. are more hazardous from life insurance point of view.

Accident:

In motor insurance, the age, make, condition previous accidents, are all examples of physical hazard.

In burglary insurance, the construction of the house, condition of doors and windows, existence or otherwise of burglar alarms, nature of contents, reputation or otherwise of the area are all example of physical hazard.

In personal accident insurance, physical hazard relates to age, occupation, health, physical condition etc, of the  proposer.

In liability insurance, the nature contribution, occupation of the premises and history lf past liability are all instances of physical hazard. In property insurance, the concept follows the pattern of fire insurance.

Moral Hazards:

Moral hazard indicates those dangers which relate to character, integrity and mental attitude of the insured. These are not visible and cannot be identified or ascertained by mere inspection of the risk or the subject-matter of insurance.

Carelessness:

It is an implied condition of ass insurance contracts that the insured must take all reasonable precaution in averting or minimizing a loss.

Difficult Insured:

An insured may be always uncompromising and litigation minded

Fraud:

A very unsatisfactory moral hazard exists when a person wants to take out a policy with the intent to make profit.

Over insurance:

Excessive over insurance is apparently an instance of bad moral hazard.

Maintenance:

Bad administration and resultant shabby maintenance of the property is an example of bad moral hazard.

Prospect of Insurance Business in Bangladesh

Prospectuses of insurance during second millennium have been forecasted as very bright because people accept it as essential cover of life. Privatization of insurance brings additional technique of business. it has been assessed in the present chapter and succeeding chapter privatization of insurance .the prospectus of life insurance and general insurance have been analyzed based on performance.

Life insurance

Life insurance business is analyzed under new business individual insurance, rural new business, development of new products, and new business projects under group insurance new business under group superannuation schemes lapsation of policies valuation working result investment operation number of active agent and their business and social responsibilities.

Rural new business

General insurance

The prospectus of general insurance business is analyzed under gross direct premium income investment income profit after tax underwriting experience crop insurance rural insurance and foreign insurance.

Gross Direct Premium Income

Analysis:

Dictionary of Finance and Investment Terms

Fundamental analysis

Evaluation of a company’s stock based on an examination of the firm’s financial statements. It is distinguished from technical analysis, which attempts to predict the market price of a company’s stock based on historical price performance and overall stock market trends. It considers overall financial health, economic and political conditions, industry factors, marketing aspects, management quality, and future outlook of the company. The analysis attempts to ascertain whether stock is overpriced, under priced, or priced in proportion to its market value. Fundamental analysis provides much of the data needed to forecast earnings and dividends. Fundamental analysis tools include horizontal analysis, vertical analysis, and ratio analysis, which give a relative measure of the operating performance and financial condition of the company.

Dictionary of Finance and Investment Terms Technical analysis

Means of predicting stock prices based on historical price and trading patterns; it is not concerned with the financial statistics that are the focus of fundamental analysis. It uses charts (e.g., head and shoulders, rising bottoms) to identify trends in the market or individual securities. Technical analysts believe the market can be predicted in terms of direction and magnitude. Stock prices tend to move with the market because they react to various demand and supply forces. An attempt is made to uncover a consistent pattern in prices or a relationship between stock price changes and other market data. Technical analysts try to predict short-term price changes and then recommend the timing of a purchase or sale. A sample company stock chart follows:

Dictionary of Insurance Terms

Analysis of property and casualty policy

Determination of

(1) Property covered, property excluded

(2) Perils covered, perils excluded;

(3) Location covered, location excluded

(4) Time period the policy is in force

(5) Persons covered, persons excluded

(6) Policy limits

(7) Coinsurance requirements.

Risk classification

Analysis of uncertainty of financial loss. This classification can be according to whether a risk is fundamental, particular, pure, speculative, dynamic, or static. In life insurance the process by which a company determines how much to charge for a policy according to an applicant’s age, occupation, sex, and health.

About Meghna Life Insurance Company Limited 

The main object of Meghna Life was to provide maximum financial security to a person and families by giving modern Insurance facilities. Its other objectives are to turn it into a profitable savings institution through payment of bonus at an attractive rate and enriched servicing and invest the accumulated small savings in the nation building various welfare and profitable projects.In the ninetieth decade some enthusiastic Bangladeshi professionals along with some others of similar state of mind dreamed of establishing a Life Insurance Company in order to participate in the financial activities of the country such as reduction of unemployment, alleviation of poverty and to contribute to the nation for the upliftment of the lot of common people. Eventually due to ceaseless efforts and courageous initiative of the Chairman and some other entrepreneurs, Meghna Life Insurance Co. Ltd. was emerged in 1996.

Meghna Life Insurance Co. Ltd. was accorded formal approval by the Govt. on 5^th May, 1996. It was emerged as the 4^th Private Sector indigenous Life Insurance after a prolonged complicated process of preparatory work under the guidance and leadership of Mr. Nizam Uddin Ahmed, the current and founder Chairman of the Company. It started carrying on the Life Insurance business since 1^st June, 1996. Meghna Life has now consolidated its position on strong footing. A transparent and accountable management is here who are working relentlessly to boost up its position on a prestigious level.

The authorised capital of the company is Tk. 30 crore and paid up capital at present stands at Tk. 9.375 crore.

In 1996 Premium income, Life Fund & Investment was Tk. 3.30 crore, Tk. 0.04 crore & Tk. 2.59 crore respectively and in 2006 such Premium income, Life Fund & Investment increased to Tk. 231.27 crore, Tk. 415.91 crore & Tk. 130.71 crore respectively.From 1996 to 2008 Meghna Life paid 33.47 crore taka as death claim, taka 47.03 crore as survival benefit Tk. 4.78 crore as maturity claims and Tk. 2.42 crore as bonus to the policy holders. This success has been possible due to constant guidance supervision and ceaseless efforts of the Honb’le Chairman and Directors and the present competent management.

It soon made a mark in the Life Insurance arena by not only being the top listed 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 other Insurance products of Loko Bima, Islami Bima (Takaful) Swanirvor Bima and Islami Khudra Bima (Takaful) many of which were the first in Bangladesh. For the first time Hospitalization benefit Insurance product was also introduced by Meghna Life.

Meghna Life has earned reputation in every corner of the insurance Industry. It can take pride of its prestigious achievements which are moulded with transparency, accountability, impeccable working capacity, sincerity, honesty and Sagacity.The Company has diversified its products to match customer’s needs and satisfaction. Currently it provides multifarious Life Insurance products to cater to the aspirations & needs as well as religious beliefs to the clients. There is no iota of doubt that Meghna life will go forward with its new missions and visions in the days to come.

Company Mission

The mission of the Meghna Life Insurance Co. Ltd. provide high quality value adding service to every customer and to; be the recognized leader in Bangladesh in providing such financial Services.

Company Vision

Meghna Life insurance’s vision is committed to assure standard that make every insurance transaction a pleasurable experience. They offer the customers through accuracy, reliability, timely delivery, cutting edge technology.

Values

• Customer focus.
• Respect for individuals.
• Team work.

Objectives of meghna life insurance company

In 1984, the Government had allowed the floatation of insurance companies in the private sector. Such companies started functioning from the middle of 1985.

In all 63 companies 45, in general insurance and 18 in life insurance are now operating in the privet sector in Bangladesh. In the wake of enhancement of business in the private sector, a huge number of policyholders left the Sadharan Bima Corporation and join those organizations. This situation continues. So far, s financial security is concerned Meghna Life Insurance Company is more dependable than all the private insurance companies in case of taking risk are. On the other hand, private companies have the agreements of giving more personalized service to attract and encourage the policyholders in their servicing methodologies. In this context it is essential; to review the servicing system of Meghna life Insurance Company Limited.

The main objective of the study is to reveal the following overall insurance business in Bangladesh along with the specific objectives through review of the policy –holders servicing of Meghna Life Insurance Company Limited.

• To identify the reason of dissatisfaction of the policy holders in the process of servicing.

• To identify the organizational and environmental weakness and futilities of Meghna life connected with the process of servicing

• To prepare necessary recommendations to develop the standard of service.

The above objectives have been focused in the study of the context of Meghna life.

IPO (Initial Public Offer)

Meghna Life Insurance Co. Ltd. offered shares for public subscription as per provision of the Public Issue Rules 1998, the Depository Act. 1999. It has offered for issue 4,50,000 ordinary shares of Tk. 100.00 each at par totaling taka 4,50,00,000/- which opened on 03 July, 2005 and closed on 07 July, 2005 which was over subscribed by 16 times.

Brand Name

Meghna is the brand name of insurance industry, by this term Meghna wants to create customer awareness, attraction and brand identity. Meghna arrange many more promotional campaigns to the market, that’s why it is well known brand. Customers identify it for its promotional activities. It has logo, shamble, design what create attention for customer mind.

Products & Services

Meghna Life Insurance Company Ltd. has introduced innovative and attractive policies with a view to attract different class of people of the country. At present Meghna Life Insurance Company is offering the following policies in other 5 (five) different categories:

• Ordinary Life (Ekok Bima)
• Group Insurance
• Loko Bima
• Islami Bima (Takaful)
• Islami Khudra Bima (Takaful)

Ordinary Life (Ekok Bima) :

Meghna 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, child protection plan, etc. and the aim of 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.

The followings are the Plans of Ordinary Life: (Ekok Bima)

Group Insurance :

This scheme has been designed to make the officials and employees of Meghna Life Insurance Co. Ltd. free from tension and financial hardship. With a very small premium, very large amount of Sum-assured may be taken with regard to the risk of accident and premature death. The arrangement of Group Insurance may be made if at least 10 members are there. In case of group term Insurance there may be 5 members. Premium normally be paid on annual basis. The premium of this insurance may be paid fully or partially by the employees and the employers.

Loko Bima :

Loko Bima Project was emerged on 13th June 1998. The aim and object of Loko Bima Project is to arouse 90%. People of the country towards savings and to make them conscious and self-reliant through Insurance. This project plays a very important role in solving social problems of a large number of people by reduction of unemployment, population control, development of cottage Industry, rural development so to say social backwardness etc. The following are the plans of Loko Bima-

Islami Bima (Takaful) :

The aim and object of Islami Bima (Takaful) is to provide more financial security of the mass people of this country through this project. This project was introduced to turn Life Insurance into a profitable savings arrangement through payment by instalments on the basis of Islami Shariah and transparent and impeccable servicing.

The followings are the Plans of Islami Bima: (Takaful)

The project is conformed to a Shariah Council comprising 15 (Fifteen) members.

Islami Khudra Bima (Takaful) :

The object of Islami Khudra Bima (Takaful) is to create habit of savings for the low income group of people of Bangladesh, ensure profit and savings through modern Insurance facilities and to introduce interest free Islami Bima. These are the following plans-

Supplementary Hospitalization Insurance Benefit

Those who are within the age of 18 to 55 years, they take this Insurance with the principal policy.

Advantages available in the Hospital-

• Staying in the Private room.
• Doctor’s Consultation Fees.
• Diagnosis expenses.
• Surgical Operation expenses.
• Medicine.
• Relevant Services Expenses.

The special characteristic of the scheme:

• This advantage may be taken for wife and children of the policyholder.
• Very less premium.
• Any medical facility is available at home and abroad.
• Facilities of any Govt. Hospital or any other Private Hospital with 50 beds may be available.
• Medical treatment expenses in any extraneous hospitalization will be borne in Bangladeshi Currency.
• Consultation of Doctors may be taken with one’s own choice.
• Rebate of Tax is available.

Rules of payment of medical bill of the Hospital-

• The Company will directly make payment of the Hospital bills subject to admission in the Hospital approved by the company.
• Re-imbursement: If the policyholder himself bears expenses on approved treatment from the Hospital which has no contract with the company, in that case the company will reimburse Hospital bills. But in these cases all the vouchers and papers shall be deposited within 30 days after release from Hospital and the company will arrange reimbursement of those after due scrutiny.

Supplementary Dread Disease Benefit (DDB 50%, 25%)

Disease and old age complicacy is indissolubly linked with human lives. Men can, at anytime be attacked with serious disease and they may not be capable to have proper treatment immediately. In this connection, Meghna Life can provide money for treatment of such fatal diseases by DDB.

Whatever Sum-assured may be, the supplementary Insurance cannot exceed 10 lac as facility.

If the policyholder is attacked with any of the following disease, 25% of the Sum-assured be paid immediately:

1. Heart attack
2. Stroke
3.  Coronary Artinary Surgery
4. Kidney Failure
5. Multiple Sclerosis
6. Paralysis.

Supplementary Accidental Death Benefit (ADB)

This supplementary Insurance may be taken adjoining the Endowment Assurance, Whole Life Assurance, and Term Assurance, Group Insurance or pension scheme. ADB is normally given as supplementary cover with the Principal Insurance policy.

The advantages of taking ADB as supplementary cover with any Life Insurance policy is that if any policyholder dies due to accident the nominee of the insured will be provided with an amount equivalent to the Sum-assured within 90 days. The rate of premium is low in this Insurance as a result the Insured can take this policy as supplementary Insurance on nominal condition.

Supplementary Permanent Disability and Accident Benefit (PDAB)

PDAB policy can be taken for death or disability by physical hurt due to accident.

In case of death the nominee of the Insured will get an additional amount equivalent to principal Sum-assured. An amount equivalent to the Sum-assured is also paid to the nominee of the policyholder instantly if both hands or both legs or both the eyes or one hand and one leg are lost.

In case of fully and permanent disability, the policyholder will be given 10% of the principal Sum-assured for next 10 years since the happening of accident as yearly allowance.

In case of one leg or one hand and an eye are lost, the policyholder will be given 50% of the Sum-assured instantly.

At the maturity, the full Sum-assured is paid.

Different types of life insurance:

Although you may hear about many names for different types of life insurance policies, the majority of policies contain benefits derived from one or more of three basic types. These types are briefly outlined in very general terms below.

Term Life Insurance: Term insurance is issued for a specific period, or “term.” This term usually ranges from 1 to 30 years. You may choose the length of the term that best suits you. Term insurance is considered an “affordable” insurance choice. If you are young with a family and need a large amount of protection without paying high premiums, this type of life insurance may be of interest to you.

Under a Term policy, in case of death during the term of the policy, your beneficiary receives the cash payment equal to the insurance amount, or “death benefit.” The death benefit amount is chosen when you buy the policy. Term insurance protection ends when the period or “term” is over, and only pays out in case of death. For this reason this product type offers higher protection at a lower cost. It is a pure “risk transfer” product.

Term insurance can be divided into three main types: level term, increasing term, and decreasing term. Level term means that the death benefit remains the same throughout the term of the policy. Increasing term means the death benefit gets larger throughout the term of the policy. Decreasing term means the death benefit gets smaller.

Endowment Life Insurance: Endowment life insurance generally guarantees that a sum of money will be available to you or your beneficiaries, whether you live until the policy ends (or “matures,”) or in case of an untimely death. Endowment insurance usually provides a guaranteed death benefit and has a savings component called the “cash value.”

Generally, if you buy an endowment policy and keep it until maturity, it will provide a lump-sum cash payout equal to the insurance amount, or “death benefit.” In case of death before maturity, the death benefit would be paid to your beneficiary.

Endowment insurance can be useful for people who know that they will have to incur a specific expense in the future — like a wedding or college tuition. They know that regardless of what the future may hold, the expense will have to be paid. Endowment insurance allows them to be certain that the money will be there.

Whole Life Insurance: Whole life insurance has many of the same features as Endowment insurance, but it is designed to remain in force during the insured’s entire lifetime. Like Endowment insurance, it provides a guaranteed death benefit, and has a savings component called the “cash value.” As you pay your premiums, a portion of each payment is set aside to create the cash value. The insurance company typically invests the cash value, which continues to grow as long as the policy is in force.

Some of the advantages of a policy’s cash value are that:

• You can cancel or surrender the policy in total or in part and receive the cash value; however, since this is a long-term policy, in the early years the cash value may be small or even equal to zero.
• If you find that you need to skip a premium payment, you can use the cash value to continue your current insurance protection for some time.
• In most cases, you may borrow from the insurance company, using the cash value in your life insurance as collateral.

Other types of whole life insurance:

Universal Life Insurance: Universal life insurance has all the features of Whole life insurance. In addition to those features, it offers flexibility in premium payment and face amount, and it provides current interest rates. Unlike whole life and term, Universal life allows you, after payment of your initial premium, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under traditional whole life policy.

Variable Universal Life Insurance: Variable universal life insurance has all the features of Universal life insurance coverage, but, instead of earning an interest rate, its cash value is linked to non-guaranteed equity investment funds, bond investment funds, or similar investments. Your premiums will be invested in the various investment options that you have chosen, and you assume the investment risks. The amount of the policy benefit is dependent on the performance of your investments.

A number of supplementary benefits can also be added to the various forms of life insurance policies. These additional benefits are usually provided by adding riders to the life insurance policy. The most common supplementary benefits include:

Accidental Death Benefit: If the insured dies because of an accident, the insurer will pay an amount of money in addition to the basic death benefit provided by the life insurance policy.

Waiver of Premium for Disability Benefits: The insurer waives its right to collect premiums that become due while the insured is totally disabled.

Disability Income Benefits: The insurer provides a monthly income benefit to the policy owner insured if he becomes very disabled.

Critical Illness Benefits: The insurer agrees to pay a portion of the policy’s face amount to a policy owner insured who suffers from one of a number of specific, critical illnesses.

Training

The management of Meghna Life Insurance Company Limited. has long been thinking to create technically qualified persons having sound knowledge on Insurance profession by giving them proper training and professional education.There is no alternative to rise up in life without education and Training. Educational qualification is an indispensable part of a person engaged in any profession. Present age is the age of having expertise in any subject matter. One must have sufficient knowledge on the works he has to do. It accelerates his prosperity if he deserves his ability through achieving proper education and training.

With this end in view the management opened a training cell in the company and appointed a senior official to impart professional training to the officials engaged both in the field as well as in the Desk.

From 2001 to 2005 the company conducted different training courses on different subject matters for its officials which are as follows:

30 Training courses were held in different Divisional offices including Head office of the company where 2,285 officials participated. The company also sent its officials to the Bangladesh Insurance Academy where 20 training courses were held and 40 officials participated in those courses.

Besides, Meghna Life also introduced coaching classes since 2001 for the Diploma course conducted by Bangladesh Insurance Academy in its own premises where a good number of officials attended the classes. In the meantime, some of the officials have passed in the examinations. Meghna Life Insurance Company Ltd. during 2001-2005 initiated epoch-marketing steps to professionally train up their officials and to make them fit to handle any technical works smoothly and perfectly.

Business Performances

Meghna Life Insurance Company Ltd. took initiative to bring out a publication titled “Meghna Life” since its inception. At the outset it was a half yearly publication comprising the news and views of the company. From 2000 it is being published yearly. But from Oct., 2004, this publication with the same title “Meghna Life” is being published as a monthly bulletin with a new look and new vision. This Bulletin has aroused much enthusiasm and Zeal amongst the officials specially working in the field. It’s a special publication of its kind which demonstrates Business performances for every month. This is reserved for the officials of Meghna Life only. Other than these, special publications are also brought out in the wake of any seminar, symposium, meetings etc.

Meghna Life has brought out the following publications in Bengali-

Besides Meghna Life also publishes leaflets, Booklets, special issues of different projects detailing different plans and other relevant information.
Library Facilities:

Meghna Life has a mini Library. There are some books on different subjects of Insurance such as Life Insurance, General Insurance, Salesmanship, Insurance law, Re-Insurance, Management and other rare books in the Library.

The officials of Meghna Life Insurance Company have the opportunity to collect books from Library for reading.

Life Insurance Marketing

Life insurance marketing is a concept, which focuses on combinations of overall activities from generating life insurance policies to reach them to the customers. overall activities means policy planning, idea, generating, selecting premium, selecting market, promoting market and transferring policy in exchange of money. To full fill the activities several department are involved such as

• Department on actuarial: which main task is to select rate of primes.
• Department of information technologies: which main task is to transportation of information
• Department of underwriting: which main task is to defining terms and condition
• Department of human resources: which main task is to maintain and development human resources involved in marketing directly or indirectly.
• Account department: which is responsible to keep accounts,
• Department of customer relation: which main task is to maintain good customer relationship?
• Department of marketing: This plays a vital role in existence of the company.

Life insurance marketing in developing countries

In development countries, life insurance industry is likely a poor industry because the sales are lower in any developing country. One main reason behind this is people of the developing countries living under the level of property. Where people cannot full fill their basic needs, there opening life insurance may be looked absurd. Moreover the govt. cannot compel people to insure their lives. This is why; life insurance industry is not expanding there swiftly. However, people of the developing countries are become interested in life insurance through awareness or promotional activates of the insurance companies. The life insurance companies of the developing should restructure their premium payment system. Micro-insurance may be full fill there. If premiums are lower and weekly or monthly installment basis people may be interested more opening policies.

Department of Marketing

Marketing is the main activity to run a business. Without proficient marketing, no organizations can develop. Meghna Life has a well-established marketing department. Its marketing department is divided into two parts such as

• Development Administration
• Sales promotion.

Development Administration:

Development administration is involved with all kinds of development and administrative jobs such as setting and implementing marketing strategies, policy controlling, selecting and controlling marketing people.

Its main job is implementing administrative decisions in actions. Here jobs are target oriented. Therefore, sales promotion & public relation. People may apply own philosophy that will not be contradictory with administrative decisions. a market development people has to assign several tasks such as choosing potential customers, considering their affordability ,under sting nearest competitors philosophy ,recommendation for right product for right timeless.

Marketing Activities of Meghna Life Insurance Company Limited:

 As a well-established company, Meghna Life Insurance Company Limited spends a large amount of money for its marketing activities. Their marketing activity starts from planning and ends to reach the product to its customers. A large number of administrators engaged with these activities. They are always gathering information about their products; promotional activities etc. and analyze them to the side of profitability.

Meghna Life has more than 25000 militant marketing executives who are mostly appointed on commission basis jobs. The marketing executives scattered all over the country they talked to the people about significance of life insurance policy and make them understand why policy with Meghna Life. Sometimes Meghna Life also arrange some social functions like seminar, symposium, conference, celebration and by this Meghna Life sends its massage to the people. Once people are motivated and interest to buy policy. Meghna Life thinks that the day is not to far when people willingly interest to buy policy.

Promotional Activities of Meghna Life Insurance Company Limited

With the term promotion, we mean sales promotion. In the area of marketing the term, promotion has been defined in two ways. In broad sense, sales promotion means improving rate of sales. I.e. it is a system to occupy market. With this philosophy, sales promotion involved with improving product quality, improving packaging so that it can attracts customers. In this sense personal selling and advertisement is the essential parts of sales promotion. In shorter sense, sales promotion means-all kind of activities expert personal selling and advertisement.

According to Luis & Jiglar, “sales promotion is an activity and/or material that act as a direct inducement, offering, added value or incentives for the product to resellers, sales-persons, or customers.”

Meghna Life is concern about promotion of its present market position. At present, it occupies 18.89%market share of the entire market (Ref-controller of insurance Bangladesh) .it really a great achievement for the company. The company conducts its promotional through some methods. Such as-

• Personal Selling: Meghna life appointed a large number of field employees based on commission. They are involved in selling with their own target.

• Incentives for Selling: After completing, the target employees are provided incentive for excess sales. That acts as a sales stimulus.

• Increment or Promotion: Employees are offered increments or promotion based on sales contributions.

• Advertisement: Meghna life sometimes circulars advertisement together TV, Radio or Newspaper.
• cial functions: Meghna life very often takes part in social activities like seminar, symposium, workshop etc.

• Social welfare: Meghna life always stands besides the victim. in any natural disaster it spreads its hands of help. It also encourages education program so it donates a great deal of books at many organization, patronized many kind of game tournament arrangement or sponsor.

• Greetings: Meghna Life provides different types greeting to the customers or to the well-wishers at different occasions like Eid, New Year and Bangali New year etc.

• After sales Services: Meghna Life ensures after sales service. Therefore, it opens customer care department in every servicing center.

Conclusion

The insurance business in now more popular in Bangladesh since its developing day by day and people are becoming more aware of insurance policy. Insurance policies give various types of protection in trade and commerce as well as public property.

Meghna Life Insurance Company Limited stands fifth position in the comparative list among 44 general insurance companies. Meghna Life Insurance’s overseas mediclaim policy became popular for protecting accident in aboard. The insurance company have been tried to improve their image in the mind of the people. Through the market is very much competitive Meghna Life Insurance Co. Ltd. doing well and hold the leadership. Meghna Life Insurance Company Limited .has thus their strong client relationship and try to deep their relationship for long term.

Recommendation:

Meghna Life Insurance Company Limited is one of the best life insurance company providing the best service and technical support to the clients at maximum benefit with minimum cost. Though they provide this service they require some recommendation.

• Claim settlement at quickest possible time.

• Provide high quality value adding services to every customer consistently.

• Designing insurance policies that include strict disciplinary action against all bad activities.

• There must be scope for further development. So, there must be improving the customer relationship.

• Making the planning process more clear of the strategies, goals, action and operational plans in Meghna Life Insurance Company Limited.

• Scanning the national and international environmental for the competitive edge and technological advance in Meghna Life Insurance Company Limited.

• Building a powerful management and marketing organization with strong internal controls.

Meghna Life Insurance Company Limited

Serve Question

Gender: 

Age:

 Education

Approximate monthly income [in BDT]

Marital Status

I am a customer of the Meghna Life Insurance Company

Please put 2 tick marks for each statement in appropriate box where 1- Strongly disagree, 2- Disagree, 3-Neither agree nor disagree, 4- Agree, 5- Strongly Agree

Expectation              Performance

1-5 measured the reliability of the service, 6-8 determined the responsiveness, 9- 12 determined the assurance, 13-16 determined the empathy and the questions from 17-20 measured the tangibility of the organization; 21-24 measured the compliance of the organization to the principle.