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-


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.


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.


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