NITOL INSURANCE COMPANY LIMITED
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Transcript of NITOL INSURANCE COMPANY LIMITED
WELCOME TO MY PRESENTATION
POLICY CONDITIONS OF MARINE INSURANCE
Nature of Business All kinds of Non-life Insurance
Establishment October 4, 1999
Registration Department of Insurance Govt., People’s Republic of Bangladesh
No of departments 5
Branches 22
Type of Company Public Limited General Insurance Company
Credit Rating Rated ‘A’ for the year 2012 by Credit Rating Information and Services Limited ( CRISL )
Chairman A.K.M. MonirulHoque
Banker Jamuna Bank Limited
Dutch-Bangla Bank Limited
Re-Insurer Sadharan Bima Corporation
Kenya Reinsurance Corporation, Nairobi, Kenya
Asian Reinsurance Corporation, Bangkok, Thailand
Malaysian Reinsurance Berhad, Kuala Lumpur, Malaysia
Reinsurance Broker
J.B. Boda& Co. (S) Pte. Ltd., SingaporeProtection Reinsurance Services, W.L.L. BahrainReliance Composite Insurances Broking Ltd., India.
Tax Advisor
Mr. BibhutiBhushanSaha, FCA
A Brief Overview of Nitol Insurance Company…
• knowing about the various insurance company of Bangladesh
• Learning the procedures to write the financial report
• Evaluate the performance of the insurance companies in terms of its management, profitability, goodwill, feasibility and other banking policies
• Gathering practical knowledge besides theoretical learning.
Objectives of the ReportPrimary Data Sources: • Physical visit • Conversation with official staffSecondary Data Sources: websites,• information published in different
journal and prospectus of company.• The publications of Central Tariff
Committee and Bangladesh Insurance Academy.
• Data on Human Resource Management collected from Internet and different kinds of Books.
Met
hodo
logy
Objectives and Methodology of the Report
Scopes and Limitations of the Report…
Scopes Head Office of Nitol Insurance Co. Ltd.
The rules and regulations of insurance company and it’s activities of HRM. The study focuses on
The principles of insurance
Common contract features
Claim settlement procedure of the insurance policy.
Limitations Lack of proper information.
Lack of in-depth understanding of certain terms and concepts prevented us from going into details.
Lack of vivid research.
Time limitation
Lack of knowledge to use the financial tools perfectly.
Major products of Nitol Insurance Company Can be divided into four Broad Categories…
Fire insurance
Marine insurance
Motor insurance
Miscellaneous insurance
CLASS OF POLICIES
Net Premium NETCLAIMS
FIRE 48,337,799 5,134,618
MARINE 79,045,125 5,198,380
MOTOR 221,415,550 51,661,807
MISCELLANEOUS
16,462,051 2,330,102
TOTAL 365,260,525 64,324,907
Motor Insurance Contract Common features…
• a) Proposal forms.• b) Cover notes. • c) Certificates of motor insurance. • d) Policy forms. • e) No claim discount. • f) Premium. • g) Renewal Procedure. • h) Period of Insurance.
The main features are as follows:
Policy Sections of Motor Insurance..1)
Hea
ding
: • name of the company• address of the
company.
2) R
ecita
l Cla
use: • also known as
preamble. • gives a start for
arriving at the Operative clause. 3)
Ope
rativ
e Cl
ause
: • mentions the scope of cover provided under the policy
• Are followed by exceptions in order to indicate the precise range of cover.
4) S
ched
ule: • name, address and occupation
of the insured, • subject-matter of insurance, • premium and renewal
premium, • period of insurance,• policy number, • renewal date and renewal
premium, • sum-insured
5) A
ttest
ation
Cl
ause
: • also known as signature clause
• appears just below the Schedule.
6) C
ondi
tions
: • appears after Attestation clause or before schedule.
• Includes-• (a) conditions precedent
to contract,• (b) conditions
subsequent to contract, • (c) conditions precedent
to liability,
Potential Products Of Nitol Insurance Co. Ltd…Crop and cattle insurance:• If the company thinks about CSR [Corporate
Social Responsibility], the company can introduce crop insurance.
Entrepreneurial Risk Insurance:• If such kind of insurance were introduced,
the engagement of vast risk with the starting business can be reduced.
Loss of Profit Insurance:• Can insure the loss of the estimated profit
of a company from some particular reasons like economic recession, budget deficit, political instability etc.
Copyright Insurance:• Can insure the loss due to piracy or
hacking of softwares, films, writings etc.
Smartphone Insurance:• Can cover the loss from unexpected
damages of just after buying a product like bending, breaking which are not even repairable or guaranteed.
strengths• Customer Loyalty• Brand name • Quick Claim Settlement• Financial Leverage• Strong Management• Combinations of various services
and products• Long term planning
weaknesses• Tamished Reputation• Bad Acquisitions• Work Inefficiencies• High Staff Turnover• Weak Brand• Lack of Advertising• Lack of knowledgeable employee
Opportunities• New Services• Online Markets• Increasing number of customers• Spreading services considering
customers mindset• Innovation and new markets• Achievement and Int. Recognition• New Technology
Threats• Govt. and IRDA Regulations• Political Risks• Intense Competition• Mature Markets• Intl Competition• Volatile Currencies• Bad Economy• Effect of Religious Sentiment• Govts Budget Deficit
SWOT Analysis..
Corporate Performance AT a Glance…
2013 2012 2011Gross premium 425.99 294.61 348.13Net premium 365.26 216.49 264.18Claims paid 64.32 47.81 52.68Commissions earned 15.69 19.66 23.92Underwriting profit 75.54 53.60 43.68Investment income 38.56 34.77 24.64Pre-tax profit 97.62 72.67 55.85Tax provision 20.38 16.61 18.07Fixed assets 79.65 66.89 73.31Fixed deposits 314.70 261.42 245
(Taka in million)
2011 2012 20130
50100150200250300350400450
The amount of PremiumFigure in Million BDT
Gross Premium Net Premium
2011 2012 20130
10203040506070
Claim PaidFigure in Million BDT
Claim Paid
Investment….
Investment for 2013 Amount (Taka in million)
Bangladesh Gov Treasury bond 25.00
Fixed deposit with banks 314.70
Shares 3.58
Total 343.29
2013 2011 2010
Total assets 769.82 618.65 554.25
Investment 343.29 274.01 257.09
2011 2012 20130
100
200
300
400
500
600
700
800
Investment and Total AssetsFigure in Million BDT
Investment Total Assets
Underwriting..
Selection of Insureds: • The authority selects only those insured whose actual loss experience is not likely to exceed the loss experience
assumed in the rating structure.• It generally insures high-grade factories, and expects that its actual loss experience will be well below average.
Proper Balance within Each Rate Classification: • Nitol Insurance Company maintains class underwriting. • Exposure units with similar loss producing characteristics are grouped together and placed in the same
underwriting class.• Each exposure unit within the class is charged the same rate.
Equity Among Policy Owners: • To attract the policy owners and maintain the principles stated by IDRA, Nitol Insurance Company charge equitable
rates.
The underwriting policy of Nitol Insurance Company is consistent with its objectives. The principles maintained by the company is-
Sources of Underwriting Information and Making Underwriting Decisions…
1.Applicant2.Agent’s report3.Inspection Report4.Physical Inspection5.Physical Examination and attending physician’s report6.MIB report
Important sources of information are following;
The underwriters may take any of the following decisions:1.Accept the application2.Accept the application subject to certain restrictions or modifications3.Reject the application
Claim settlement technique..
• A notice of loss due to insured peril required before the survey • Survey by the insurance representative• Issuance of a claim forms • Seeking information regarding the subject matter including date of loss time, place of fire,
cause of fire particulars of the property affected by the loss such as description, value at the time of fire, salvage value, claim amount and sound value of all the property.
• Seeking necessary documents regarding the claim.• Examining whether the loss in payable or not by evaluating the information collected
regarding the subject matter and the loss occurrence.• Making prompt payment of the claim if payable• Rejection of the claim if not payable
Nitol Insurance Company settles the claims in the following ways:
Some big claims recently paid by Nitol Insurance Company Ltd.
On March 24, 2015;
• Nitol Insurance Company has issued a cheque of 48,89,562tkto Jed A Sweater Ltd. as fire insurance claim.
On March 25, 2015;
• Nitol Insurance Company has issued a cheque of 40,75500tk to Diamond Cement Ltd.
On February 10, 2015;
• Nitol Insurance Company has paid a cheque of 1,50,00,000 tk under fire insurance.
RATIO ANALYSIS… Operating Performance Ratio
2013 2012 2011 2010 2009
Current Ratio 1.34 1.51 1.12 1.27 1.48Expense Ratio .15 .12 .23 10 .20Return on Asset .1 .09 .06 .05 .04Return on Equity .45 .27 .19 .14 .10
Debt to Equity Ratio .94 .80 .80 .75 .98
Earning Per Share Ratio 3.57 2.75 2.002.15
2.76
Graphical presentations of atio analysis
2013 2012 2011 2010 20090
0.20.40.60.8
11.21.41.6
Current Ratio
2013 2012 2011 2010 20090
0.05
0.1
0.15
0.2
0.25Expense Ratio
2013 2012 2011 2010 20090
0.010.020.030.040.050.060.070.080.09
0.1
Return on Asset
2013 2012 2011 2010 20090
0.050.1
0.150.2
0.250.3
0.350.4
0.450.5
Return on Equity2013 2012 2011 2010 2009
0
0.2
0.4
0.6
0.8
1
1.2
Debt to Equity Ratio
2013 2012 2011 2010 20090
0.51
1.52
2.53
3.54
Earning Per Share Ratio
Rate Making: How Insurance Premiums Are Set...
• Rate making (insurance pricing) is the determination of what rates, or premiums, to charge for insurance. A rate is the price per unit of insurance for each exposure unit, which is a unit of liability or property with similar characteristics.• There are 3 methods for determining rates in property and liability insurance: • judgment rating,• class rating,• merit rating.• Merit rating can be further classified as• schedule rating, experience rating, and retrospective rating.
Hull Clauses-
mainly framed with the insurances on vessels
are incorporated in hull policies.
Cargo Clauses-
used in the insurance of goods
are incorporated in cargo policies.
Freight Clauses-
framed in connection with the loss of freight due to maritime perils which may be insured for a period or for a voyage.
Different clauses maintained by Nitol Insurance Company are-
Different clauses maintained by Nitol Insurance Company are-
War
ehou
se to
War
ehou
se
Clau
se-
covers the inland risk. covers the risk from the exporter’s warehouse to the importer’s warehouse.Sometimes, time-limit is inserted in the policy and extra cost is charged.
Devi
ation
Touc
h an
d st
ay
Clau
ses-
Any departure from the specified course or a customary course amounts to deviation. If the ship deviates without lawful excuse the underwriters are relieved of the liability as from the time of deviation. Deviation or delay is excused in some lawful cases.
Assig
nmen
t Cla
use-
Cargo policy is freely assignable.Hull policy is not assignable without the consent of underwriter.The degree of the risk of the subject matter in hull insurance is changed with the ownership of the vessel.
At a
nd F
rom
Cla
use-
applicable in voyage policies insuring hull and freight. determines the time when the actual risk will commence. By inserting the words ‘At and From’ the policy covers the subject matter lying at the port of departure and also from the time the ship starts for. the risk commences from the time of departure and not previous to that when only “From” is added.
Inch
mar
ee C
laus
e-
Protects the shipowners against losses to be included in claims by the assured. Indemnifies for damage to the hull or machinery due to the negligence of the master or crew, explosion or latent defects,Also incorporated in cargo policies.
Runn
ing
Dow
n Cl
ause
s (R
.D.C
)-
Indemnifies for the damage done by his vessel to another vessel. This liability is usually compensated to the extent of three-fourths of the total loss. The assured himself has to bear one-fourth of the lossFull protection can be given deleting the words ‘Three-fourths’ from the clause.
Sue
and
Labo
r Cla
use-
Indemnifies for the cost for averting or minimizing loss or damage. Expenses incurred for the purpose of averting or minimizing any loss not covered by the policy are not recoverable under this clause. Excludes salvage charges.
Rein
sura
nce
Clau
se-
The reinsurer is liable only for claims for which the original underwriter is liable.If the reassured has paid a claim for which he is not legally liable under this policy, the reinsurer is under no obligation to reimburse him. The cost incurred by the original insurer in contesting liability under the original policy, need not be paid by the reinsurer.
Different clauses maintained by Nitol Insurance Company are-
Institute Cargo Clause A (ICC A)• This insurance covers all risks of loss of or damage to the subject matter insured except as provided in clauses 4. 5, 6 and 7
below.• This insurance covers general average and salvage charges, adjusted or determined according to the contract of affreightment
and/or the governing law and practice incurred to avoid in connection to the avoidance of loss from any cause.• This insurance is extended to indemnify the assured against such proportion of liability under the contract of affreightment
“Both to blame collision” clause as is respect of loss recoverable hereunder. In event of any claim by the ship-owners under the said clause the assured agree to notify the underwriter who shall have the right, at their own cost and expense, to defend the assured against such claim.
Institute Cargo Clause B (ICC B)• These clause do not cover all risk. The perils which will be covered are mentioned. • This policy is also called named policy.
• Institute Cargo Clause C (ICC C)• This clause generally covers the loss due to fire perils.
Different clauses maintained by Nitol Insurance Company are-
THANK YOU