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Internship Report On Popular Life Insurance Company
Internship Report On Popular Life Insurance Company
On
Life Insurance Activities:
A Case Study on Popular Life Insurance Company Limited
Submitted To
Supervised By
Submitted By
Date of Submission
LETTER OF SUBMISSION
Dear Sir,
I have the honor to inform you that, I have completed my internship report on “Life
Insurance Activities: A Case Study on Popular Life Insurance Company Ltd.” for
the purpose of partial fulfillment for the degree of Bachelor of Business
Administration with a major in Marketing.
As your valuable suggestions and guidance, I have tried my best to prepare the report
properly. I sincerely believe that, you will find this report very significant and
informative.
I therefore, pray and hope that you would be kind enough to accept this report and
oblige thereby extends your co-operation and advice.
Sincerely Yours,
LETTER OF DECLARATION
I, hereby declare that, this internship report is not a copy of another person's report.
The study is original in nature. I have tried my best to make this report informative as
well as descriptive. I also ensure that, this report has not been submitted to any other
person earlier and will not be submitted to anybody in future.
LETTER OF ACCEPTANCE
He has reviewed all the relevant information and issues of primary and secondary
sources. I rely on the honesty of Saurabh Biswas in producing the report and hence
recognize the originality of his research work presented in the report.
Topic Page No
1.1- Background of the Study 04
1.2- Objectives of the Study 04
1.3- Methodology of the Study 04
1.4- Scope of the Study 05
1.5- Limitations of the Study 05
1.6- Problem Statement 05-09
Topic Page No
3.1- Corporate Information 18-20
3.2- Objectives 20
3.3- Popular Life Insurance Company's 21
Products & Services Policies
Chapter 7: Findings
Topic Page No
Findings 42-43
References 48
Appendix 49-50
EXECUTIVE SUMMARY
It is a great pleasure for me that I have completed report on "Life Insurance Activities:
A Case Study on Popular Life Insurance Company Ltd". My Internship report
contains all the information about my work experience with Popular Life Insurance
Company, which was established in September 26 th, 2000. I Shall try to discuss and
include introduction, history, objective, status, mission and financial analysis etc.
Popular Life Insurance Company Ltd. has been playing an important role in the
economic development of the country. Since the beginning, Popular Life Insurance
Ltd. set an outstanding standard to gain the popularity among all classes of people.
Popular Life started micro life insurance-cum-savings products basically went to the
poor people. Day by day the company is gaining much popularity among the
customers as it always try to maintain good relationship with its customers.
At the beginning of this report in chapter 1, I tried to give an introduction about the
background, objective, scope, methodology of this study. There are also some
problem statements included.
In chapter 2, I tried to write about the history of insurance industry and the
development of insurance industry in Bangladesh.
In chapter 3, I tried to give some brief information about the company overview of
Popular Life Insurance Company Limited and their product details.
In chapter 4, I tried to elaborate the literature review of this study including many
definitions, advantages, disadvantages of life insurance.
In chapter 7, I tried to explain the findings that I found after analyzing the activities of
this company.
In chapter 8, I tried to give some recommendations on how the company can improve
its service toward its customers and last but not the least, this includes a conclusion of
this report.
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Popular Life insurance Company is one of the leading insurance Companies in
Bangladesh. The performance of Popular life Insurance company is getting better day
by day. Its premium, assets, claims meeting, utilization of income is getting better in
last five years. The study is about the activities of Popular Life Insurance Company
limited, its cash payments, claims meeting, premium collection, service offered,
products etc. The study also showed that the factors are related with the customer
perceived risk and customer’s value.
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CHAPTER 1
INTRODUCTION
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1.1 Background of the Report
Insurance is a system of spreading the risk of one to the shoulders of many. It can be
defined as a co-operative device to spread the loss caused by a particular risk over a
number of persons who are exposed to it and who agree to ensure themselves against
that risk. It is a contract whereby the insurers, on receipt of a consideration known as
premium, agree to indemnify the insured against losses arising out of certain specified
unforeseen contingencies or perils insured against. It can play an important role in a
country’s economy. It is an old form of financial practice of sharing risk, which was
introduced in this area in mid-18th century.
Primary data have been collected from head to head interview with some important
employees of this organization.
Secondary data have been collected from internet, different books, various journals
and annual report of this organization.
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1.4 Scope of the Study
By using this study, any individual would be able to have an idea about the principles
& procedures of setting up a life insurance policy, the performance of Popular Life
Insurance Company Ltd. and the impact of insurance business in our society.
In this report, the major problems in performing insurance business has been
classified into some major criteria which are social, economic, political, legal and
other reasons. The actual problems are discussed in detail within these criterions.
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Centralization:
Most of the insurance companies in our country are located in urban areas and there
are few branches in rural areas. They think that they might have better scope for
performing their business as the economic condition of the urban is better than the
rural areas. They don’t think that the large number of our population reside in rural
areas and if branches are expanded in rural areas then the business can thrive if proper
motivation policy is taken to aware the mass people of the rural areas. Thus this
centralization policy acts as an obstruction for the growth of insurance business in our
country.
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Problems of Economic Bases and Effective Principle:
Before independence insurance business was control by private company. But after
independence maximum insurance company take over by the government. For that
reason government changed the company management, policy and applies new rules
and regulations which system was very tricky and uncomfortable for the mass people.
Political Instability:
Political instability is a major problem in Bangladesh. For the instability in politics,
many disruptive situations are often created which are bad for any businesses. The
people who operate various businesses in our country often experience various types
of inconvenience in running their business. Insurance business is not an exception of
this. Political instability and inconsistency of political courses are a serious problem
for the insurance business.
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1.6.4 Legal Problems
Traditional Method:
Still Bangladesh insurance company using or follows traditional methods on
insurance policy. Whereas foreign companies are using modern systems like
computerized system. Our local company does not want to change themselves.
Lack of Exposure:
Another main problem in the country is that the media is unconcerned to send the
right message regarding insurance to the people. As a result, a large portion of
population is completely unaware about the insurance policy. Another problem is that
the insurance company does not provide adequate information in the company’s
websites which can fulfill the queries of their potential customers and satisfy
themselves to buy an insurance policy.
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Absence of Business Ethics:
Some insurance companies create harassment on the policy holders or sometimes on
the dependents of the policy holders when they want back their money after death or
maturity. The insurance companies show different causes in order to make delay to
return back the money at expected time. Sometimes they are eager to pay less than the
desired amount by creating various circumstances such as they try to say that the
disaster of the subject matter of the policy is not responsible due to their activities.
Besides this, some field officials also create some illegal acts. They often try to give
false information to the people for buying a policy. And these kind of illegal acts
create bad reputation to the insurance companies and hindrance the overall insurance
business. Those who are harassed by the insurance companies discourage other not to
take an insurance policy.
Insufficient Service:
In Bangladesh insurance company people failed to provide better service to the mass
people that’s why the people who want to take the insurance policy they loss their
interest from insurance. At same time in foreign country insurance workers goes to
customer’s house and offices regularly to aware themselves and influence them to
take insurance policy. In that’s case Bangladesh insurance company people are not
that much expert.
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CHAPTER 2
2.1- Introduction
2.2- History & Development of Insurance
2.3- Development of Insurance in Bangladesh
2.4- Implication of Five Forces Model (By Michael E.Porter) in Insurance
Industry of Bangladesh.
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2.1 Introduction
Insurance is a system of spreading the risk of one onto the shoulders of many. Whilst
it becomes somewhat impossible for a man to bear of 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 the loss on a number of persons within the
group formed for this particular purpose.
Marine Insurance:
Marine is the oldest form of insurance and came first in the list. This type of insurance
probably began in northern Italy sometime during the 12th & 13th century and
gradually the concept was rather transferred to or taken over by the United Kingdom.
During the 13th / 14th century the Italian merchants went to UK and along with the
merchandise carried with them the trading customs including the concept of marine
insurance. Marine insurance as such was not being practiced as a separate specialized
entity during that time since it were the merchants who used to transact marine
insurance business side by side with their general trading activities.
Fire Insurance:
After marine insurance fire insurance developed in present form. It had been observed
in Anglo-section Guild form for the first time where the victims of the fire hazards
were given personal assistance by providing necessaries of life. It had been originated
in Germany in the beginning of sixteenth century. The fire insurance got momentum
in England after the great fire in 1666 when the fire losses were tremendous.
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Life Insurance:
The third in the list of development is the life insurance business. The earliest policy
of which there is a record dates back to 1583. During this period only short term
polices were used be issued meaning that only at the death of the life assured during
the term period the money was to be paid. On survival nothing was payable. In 1693
Halley introduced the mortality table giving a definite value to risk of death. In 1974,
the life Assurance Act was passed in the British parliament requiring the presence of
insurable interest before one could affect a life policy on the life of another. All these
gradually gave life assurance a sound, systematic and scientific basis as we see in the
present day.
By virtue of the order, save and except postal life insurance and foreign life insurance
companies (other than the Pakistani companies), all companies and organizations
transacting all types of insurance business in this country came under this
nationalization. Five insurance corporations were basically established, Viz.
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with this 4 corporation whilst life companies or the life portion of a composite
company joined the Rupsa and Surma, the general companies or the general portion of
a composite company joined the Teesta and Karnaphuli. Formation of two
corporations Although the basic idea behind creating 2 corporations in each main
branch was to encourage competition even under a nationalized system, it was
observed soon that the unnecessary administration expenses for maintaining these two
corporations in each front and are apex institution.
Therefore, on 14th May, 1973 the structural arrangement under nationalization was
changed vide act VI 1973. The previous 5 corporation were abolished and instead 2
corporations were established, Viz.
For transacting general insurance business only. The two general insurance
corporations were merged under it.
For transacting life insurance business only. The two life insurance corporations were
merged under it. In the sector, postal life insurance business and corporation of life
business by foreign companies (other than Pakistan) are still permitted as before. This
is the present structure under which the insurance business in transacted in this
country. Insurance is not altogether a new idea in this country, but somehow it could
not flourish much. Now however, there is enough provision for tapping the untapped
resource and potentialities. During the Pakistan or Pre-Pakistan period this market
was basically a production market dealing only in limited conventional types of
insurance business both in life and general. Consideration used to be missing as to
what type of policy would suit best the requirement of the people. Hence, even though
there was tremendous growth prospect, it never gained momentum in the past. Lake
of proper technical know-how of the insurance personnel and the general ignorance of
the public as to the importance of insurance business were also partly responsible for
extremely slow growth of insurance activities in the past.
It should be remembered by the students that the insurance industry had to pass
through a number of difficult during the initial stages after nationalization. However,
the handicaps were kept under constant review by the government on the management
of the industry and remedies are gradually being implements to accelerate the growth
and progress.
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Year Establishment/Act Authority
1 March,1972 P.O. 19/1972 Adoption of Ministry of Commerce,
Insurance Act in Bangladesh Bangladesh
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2.4 Implication of Five Forces Model (By Michael E. Porter) in
Insurance Industry of Bangladesh
The change of entry by potential competitors depends on the barriers to entry. The
higher the barriers are, the lower is the chance to entry by the potential competitors. In
this respect, Bangladesh government has not given permission to establish any
insurance company except ALICO. As such, the insurance companies of Bangladesh
are enjoying better facilities and benefits, but to allow the foreign insurance
companies are dependable on the wishes of Bangladesh government. So our own
insurance companies are always remaining anxious if Bangladesh government permits
insurance companies of foreign countries, then they will be in the face of hard
competition.
The extent of rivalry depends on the function of three factors, such as, a) competitive
structure, b) Demand conditions and c) Exit barriers. Competitive structure refers to
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the number and size of companies in an industry. Structures vary from fragmented to
consolidate. Growing demand is good for existing companies because it gives
opportunities to the existing companies to expand operation. Exit barriers could be
economic, strategic and even emotional. In the light of above discussion the insurance
companies of Bangladesh are better in their competitive structure, demand condition,
but the spoken in the last exit least number of barrier.
Buyers can be viewed as a competitive threat when they force down prices or demand
higher quality products and better services. Alternatively weak buyers give a company
the opportunity to raise prices and earn greater profits. The bargaining power of the
policy holders of insurance companies of Bangladesh are mostly limited. As such they
are enjoying better facilities.
When the product that suppliers sell has few substitutes and is important to the
company.
When there are close substitutes, they pose strong competitive threat. It results in
reduction in price by limiting profitability. In this regard the insurance companies of
Bangladesh are mostly in safe condition, As insurance is the substitute of its own
itself.
Chapter 3
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COMPANY OVERVIEW
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Popular Life Insurance Co. Ltd. established on September 26, 2000. Since the
beginning, Popular Life Insurance Ltd. set an outstanding standard to gain the
popularity among all classes of people. Popular Life started micro life insurance-cum-
savings products basically went to the poor people.
Corporate Information
Company name : Popular Life Insurance Co. Limited
Year of Establishment : 2000
Date of Incorporation : 26th September, 2000
Registered Office : Peoples Insurance Bhaban
36 Dilkusha C/A (3rd Floor),Dhaka-1000.
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M.A, LLB, Advocate, Supreme Court of Bangladesh
Board of Directors
Bankers
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Argani Bank Ltd. Exim Bank Ltd.
Dhaka Bank Ltd. Pubali Bank Ltd.
Al-Arafah Islami Bank Ltd. Jamuna Bank Ltd.
Bangladesh Krishi Bank Janata Bank Ltd.
Islami Bank Bangladesh Ltd. The City Bank Ltd.
3.2 Objectives
Knowledge:
To perfectly combine global expertise blended with local knowledge to remain as
pioneer life insurer.
Care:
To provide a world class customer service, which is responsive, personalized human
and empathetic.
Honesty:
To ensure honesty and trust in every cornerstone through integrity.
Excellence:
Aimed to be focused on the value of continuous improvement of human resources and
the organization by striving for the highest standards of quality in every aspect of its
modus operandi.
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Popular Life Insurance Company provides several types of policies to its customers.
Generally they divided their policies in two categories.
Individual Micro
Ekok Bima Al-Amin Bima
There are several types of policies that the company served to its policy holders like
extra care. These are:
Chapter 4
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LITERATURE REVIEW
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Insurance is the equitable transfer of the risk of a loss, from one entity to another in
exchange for payment. It is a form of risk management primarily used to hedge
against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a
company selling the insurance; the insured, or policyholder, is the person or entity
buying the insurance policy. The amount of money to be charged for a certain amount
of insurance coverage is called the premium. Risk management, the practice of
appraising and controlling risk, has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's promise
to compensate (indemnify) the insured in the case of a financial (personal) loss. The
insured receives a contract, called the insurance policy, which details the conditions
and circumstances under which the insured will be financially compensated.
Auto insurance
Auto insurance protects the policyholder against financial loss in the event of an
incident involving a vehicle they own, such as in a traffic collision.
Gap insurance
Gap insurance covers the excess amount on your auto loan in an instance where your
insurance company does not cover the entire loan. Depending on the companies
specific policies it might or might not cover the deductible as well. This coverage is
marketed for those who put low down payments, have high interest rates on their
loans, and those with 60 month or longer terms. Gap insurance is typically offered by
the finance company when any person first purchase his/her vehicle. Most auto
insurance companies offer this coverage to consumers as well.
Health insurance
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Health insurance policies cover the cost of medical treatments. Dental insurance, like
medical insurance, protects policyholders for dental costs. In most developed
countries, all citizens receive some health coverage from their governments, paid for
by taxation. In most countries, health insurance is often part of an employer's benefits.
Long-term disability insurance covers an individual's expenses for the long term, up
until such time as they are considered permanently disabled and thereafter. Insurance
companies will often try to encourage the person back into employment in preference
to and before declaring them unable to work at all and therefore totally disabled.
Casualty insurance
Casualty insurance insures against accidents, not necessarily tied to any specific
property. It is a broad spectrum of insurance that a number of other types of insurance
could be classified, such as auto, workers compensation, and some liability
insurances.
Life insurance
Life insurance provides a monetary benefit to a decedent's family or other designated
beneficiary, and may specifically provide for income to an insured person's family,
burial, funeral and other final expenses. Life insurance policies often allow the option
of having the proceeds paid to the beneficiary either in a lump sum cash payment or
an annuity. In most states, a person cannot purchase a policy on another person
without their knowledge.
Property insurance
Property insurance provides protection against risks to property, such as fire, theft or
weather damage. This may include specialized forms of insurance such as fire
insurance, flood insurance, earthquake insurance, home insurance, inland marine
insurance or boiler insurance.
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Life insurance (or commonly life assurance, especially in the Commonwealth) is a
contract between an insured (insurance policy holder) and an insurer or assurer, where
the insurer promises to pay a designated beneficiary a sum of money (the "benefits")
in exchange for a premium, upon the death of the insured person. Depending on the
contract, other events such as terminal illness or critical illness can also trigger
payment. The policy holder typically pays a premium, either regularly or as one lump
sum. Other expenses (such as funeral expenses) can also be included in the benefits.
Life policies are legal contracts and the terms of the contract describe the limitations
of the insured events. Specific exclusions are often written into the contract to limit
the liability of the insurer; common examples are claims relating to suicide, fraud,
war, riot, and civil commotion.
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Life insurance provides an infusion of cash for dealing with the adverse financial
consequences of the insured's death.
Life insurance enjoys favorable tax treatment unlike any other financial
instrument.
Death benefits are generally income-tax-free to the beneficiary.
Death benefits may be estate-tax free if the policy is owned properly.
Cash values grow tax deferred during the insured's lifetime.
Cash value withdrawals are treated on a first-in-first-out (FIFO) basis, therefore
cash value withdrawals up to the total premiums paid are generally income-tax
free.
Policy loans are income tax free.
A life insurance policy may be exchanged for another life insurance policy (or for
an annuity) without incurring current taxation.
Chapter 5
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INSURANCE ACTIVITIES OF
POPULAR LIFE INSURANCE COMPANY
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Generally, Popular Life Insurance Company Limited offers two types of Life
Insurance policies to its customers. These are:
I. Endowment plan with profits (Tables-01) The most common and widely popular,
this plan provides for a fixed sum at end of a particular term or at earlier on death of
the assured. This is a straightforward coverage allowing a person to plan his future
needs for security and projected savings through means of insurance i.e. for security
and projected savings through means of insurance.
a) Biennial payment assurance plan (Tables-02) - is given for 10, 15 & 20 years' term and
provides for payment of a portion of sum assured bi-annually after expiry of the 4th year of
the policy, if the policyholder is then living. The amount of installment and when payable is
shown in the table below
b) Three payment endowment assurance plan (Tables-03) Given for terms like 12, 15,
18, 21, 24 years with profits this plan provides for one fourth of the sum assured upon
expiry of each one third of the term and on death at anytime within the term the full
sum assured - payment of one or all the installments notwithstanding. In case of
survival to the end of the term remaining portion of the sum assured along with profits
is paid after deducting the installments already paid.
c) Four payment endowment assurance plan (Tables-04) - is given for 12, 16, 20, 24
& 28 years term with profits. This plan provides 15% sum assured upon expiry of one
fourth of the term, 20% sum assured upon expiry of two fourth of the term, 25% sum
assured upon expiry of three fourth of the term and the remaining 40% of the sum
assured along with accrued profits is paid at maturity.
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d) Five payment endowment assurance plan (Tables- 05) - is given for 10, 15, 20, 25
& 30 years term (with profit). This plan provides 10% sum assured upon expiry of
one fifth of the term, 15% sum assured upon expiry of two fifth of the term, 20% sum
assured upon expiry of three fifth of the term, 25% sum assured upon expiry of four
fifth of the term, and the remaining 30% of the sum assured along with accrued profits
is paid at maturity.
III. Money back term assurance without profits (Table- 06) - This plan is
comparatively low cost plans. This plan provides full sum assured in case of
premature death within the term or refund of all premiums paid at end of term.
IV. Child protection plans with profits (Table - 07,09) : Multiple benefits in the form
of scholarship, monthly annuity etc. in addition to sum assured are available under
these plans. Under one plan (Table-07) sum assured or a part thereof is also payable to
the policyholder in case the child dies prematurely.
V. Assurance cum Pension and Medical Benefit plan (Table - 08) - without profits.
Under this plan pensions plus medical benefit are provided from an age designated by
the policyholder for life, guaranteed for a minimum period of 10 years i.e. if the
pensioner dies anytime within 10 years his designated nominee will get pension plus
medical benefit for remaining term of 10 years. Before pension starts, if the assured
policyholder dies, 10 times the annual pension plus 10% of medical benefit be paid as
a lump-sum to his nominee and the policy is terminated upon such payment.
VII. Single Payment Endowment Assurance with profit (Table No. 10): It is a single
Premium Policy offering for either 10 or 15 years term. Full sum assured along with
accrued bonus be paid either normal tenure of the policy expires or on death anytime
before date of maturity. Premiums are based on the age of the proposer. This plan
perfectly suits the needs of the executive class.
I. Islami DPS Akok Bima with profits (Tables-28) Based on our socio economic
prospective, Popular Life introduced monthly basis small saving scheme. The
prospective of this plan to facilitate the rural low income group to have certain
amount of money at the end of specified period. Premium starts from Tk. 200 to Tk.
3000 and term of the policy is given for 12, 15, 18 & 20 years term only.
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II. Islami Deposit Pension with profits (Table - 57) - This plan aims at low income
people of our society. This plan provides full sum assured along with bonus in case of
premature death or successful completion of term.
III. Small savings term deposit scheme with profits (Table - 51, 55, 56) : Sum assured
ranging from Tk. 6000 to Tk. 60,000. Term of the policy is given for 12, 15 and 18
years. Full sum assured is provided along with accrued bonus in case of premature
death of the policy holder or at the end the policy term.
Policy Documents
Upon acceptance of the proposal, a pass book is issued to the policyholder detailing
all terms and conditions of the policy. The pass book serves as the purpose of
recording of all payments made by him towards the policy. For individual
policyholders the passbook serves as policy document.
5.4 The process by which Popular Life Insurance Company formulate life
insurance contract
Popular Life Insurance Company serves policy by its agents. In this process agents
first find out a people who have a probability to take policy and then try to convince
him. If the person is satisfied then agent gives him a policy form to make the policy.
Offer of Proposal:
First of all, the company gives offer to a person with all information that’s he need to
know. If anybody wants to create a policy then he has to collect a form of application
as his wish and give a proposal to the company to create a policy by this form.
Consideration of Proposal:
After this, the company consider this proposal. For this reason they collect some
information's to justify the probability of risk of the proposal.
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Collection of Medical Report:
In the next step, the company collects all kinds of information about the fitness of the
person and collect medical certificate and test report from him.
In this step the company collects more information if they need. They collect
information from the closer person of propose, from the personal doctor of propose
and from other trustable source.
Proof of Age:
To consider the proposal, company need to justify the age of the person. For this
reason they collect the birth certificate and other related documents of proof.
Selection of proposal:
In this step company select the proposal by justifying all information like medical
certificate, birth certificate, agents reports etc.
Acceptance of offer:
Then, the company accept the offer and announce the amount of premium to propose.
Insurance of Policy:
In the last step, the company collect money from the person and give him the policy
and the cover note.
a) Age
b) Physical condition
c) Personal History- 1) Health record, 2) Past habit, 3) Previous occupation,
4) Insurance history
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d) Family History
e) Occupation
f) Residence
g) Present habits
h) Morals
i) Race and Nationality
j) Sex
k) Economic Status
l) Defense Service etc.
For this, they collect above risks from various sources because it is not possible to get
all information from one source and this are:
a) The proposal form
b) Medical Examiner’s Report
c) Agent’s Report
d) The Inspection Report
e) Private Friends Reports
f) Attending physicians
g) Medical Information Bureau
h) Neighbors and Business Associates
i) Commercial Credit investigation Bureau etc.
After collecting the risks the company confirm the following principles in their risk
management practices and then accept the offer of proposal and announce the amount
of premium to propose.
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5.6 Settlement of Claim
Image and goodwill of the corporation largely depend on early settlement of claims.
Popular Life Insurance Company fulfill the claim in this situation.
1. Payment of claim after certain period. That means corporation fulfills the claim if
the policy is matured. It may be 10, 15, or 20 years.
2. Payment of claim after the death of insured: Company pay insured money after the
death of the policy holder according to the contract of the policy here need—
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that they consider the risks and opportunities while taking business decision and pay
good dividend every year.
The social spectrum under which they operate desires that they carry on their business
responsibility and positively contribute to the society and the environment. In this
instance, Popular Life Insurance Company involves itself in many activities that are
considered corporate social responsibility. Business is not only for making profits but
also do something good for the society so that the environment of the society is
become good. In the time of social responsibility, Popular Life Insurance Company
always tried to perform active roles and help the society by providing the required
service.
In this regard, Popular Life Insurance Company Limited has gained a good brand
image among its customers. For this reason the popularity of this company is
increasing day by day. As Popular Life Insurance Company Limited always cares for
its customers and they are increasing their facilities so that customer can access more
features in less time and with no harassments. Popular Life Insurance Company
always tried their best to settle the claims of their customers in a possible short time.
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CHAPTER 6
ANANLYSIS OF
POPULAR LIFE INSURANCE COMPANY'S ACTIVITIES
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Popular Life Insurance Company's business started with the creation of product or
service and ended with the attempt to sell it. Popular Life should start with the
knowledge of the market. So, it is necessary to find out what is needed, what will be
sold, only then should return the operation to create the product or service.
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Year wise Premium Cumulative Investment
Cumulative Life fund
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6.2 Last 5 Years Business Performance
TAKA TAKA %
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PROPERTY AND ASSETS
Loan 51,881,677 56,334,384 (7.90)
On insurer's policies within their surrender value 3,584,577 3,656,984 (1.98)
Home loan
48,297,100 52,677,400 (8.32)
Statutory deposit with Bangladesh Bank & Jamuna 15,000,000 15,000,000 0.00
Bank
Treasury bond 10,824,100,000 7,324,100,000 47.79
Membership of DSE & CSE 151,313,110 151,313,110 0.00
Shares and debentures 2,146,272,671 2,179,701,367 (1.53)
House property 3,260,656,544 3,265,797,998 (0.16)
Investment in subsidiary company 1,010,215 1,010,215 0.00
Interest, dividend and rents accruing but not due 1,670,032,550 1,517,131,518 10.08
Advance and deposits 352,374,423 343,165,118 2.68
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6.4 SWOT Analysis of Popular Life Insurance Company Ltd.
Opportunity:
♣ Huge business area.
♣ Introducing on line system all over the country in insurance business.
♣ Growth of sales volume.
♣ Introducing more branches.
♣ Develop relations and correspondence with foreign Insurance companies.
♣ Could make contacts with more banks.
Threats:
♣ Other Insurance Companies in Bangladesh.
♣ Different classic service of other Insurance Companies.
♣ Political unrest and Economic recession.
♣ Illegal business operation by the some clients.
♣ New entrants.
Internal Environment (Strengths/Weakness) analysis
Strength:
♣ Quality of the Popular Life management.
♣ Location of the Popular Life Insurance sales & Agency Office.
♣ Good banker-customer relationship.
♣ Financial condition of Popular Life Insurance Company Ltd.
♣ Environmental constraints.
♣ Personal relationship with the Popular Life Insurance Company employees.
Weakness:
♣ Sometimes it takes longer to meet claims.
♣ Some employees could not describe the actual things to individuals.
♣ Sometimes it could not get its target in service center.
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CHAPTER 7
FINDINGS
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Findings
Insurance is as old as the civilization. It was present in the form of mutual help.
Insurance is a co-operative device of distributing losses, falling on an individual or his
family over a large number of persons, each bearing a nominal expenditure and
feeling secure against heavy of loss. Insurance provides certainty of payment at the
uncertainty of loss, it provides capital, protection & prevention of loss. It helps
Economic progress. Besides, we get more experience & information's about Popular
Life Insurance Company.
iv. Personal relationship with Popular Life's employees are normally considered by
most of the respondents. So, for the analysis of this study only these four factors have
been taken into accounts.
No. of Clients 50 66 48 55
Response
The above table showed that “location of the Popular Life office” has got the first
rank in case of 66 respondents out of 79 respondents with the Popular Life. It is
viewed that 55 respondents have opined this factors as second rank, 50 and 48
respondents choose “Quality of the Popular Life management” and "Reputation of
Popular Life" as the third and second rank respectfully.
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Here are some other important findings of this study that should be considered:
Negative Aspects
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Chapter 8
8.1- Recommendation
8.2- Conclusion
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8.1 Recommendation(s)
There is no social recognition of insurance sector in Bangladesh, due to lack of proper
management in quality of customer service. So they should be firmly believe their
profitability, growth and market share of business depend on their quality of customer
service. In their customer service, they should focus on the following:
2. Trained and skilled insurance producers like agents and development officers are
prerequisites of effective insurance product marketing in the life sector but they are
found lacking.
3. Research and development program yet to get adequate attention. But adequate
research may lead towards the target of success and fulfillment. Life insurance
companies in Bangladesh should actively consider undertaking of research and
development programs in the fields of consumer research, service research and
research in service marketing policies and strategies etc.
5. There should not be so many layers in life insurance companies between the branch
office and the agents and one field officer in between the corporation and the agents
should replace this unnecessary multi-tier organizational set up. This is essential for
reducing the expenses that has gone beyond the tolerable limit. Special committee on
insurance has also suggested this.
6. Fake agents such as ‘Benami Agents’, ‘Dummy Agents’ and ‘Benami employers of
Agents’ who indulge in malpractices should be eliminated and selection of agents
should be unbiased. Appointment of too many agents in a particular area should be
stopped. Fulltime agencies should be encouraged and part-time agencies should be
stopped.
7. There should be vigorous campaign throughout the country to make the people
aware of the utility and prospects of buying insurance.
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The government must take controlling responsibility in its own hands and must ensure
proper application of law.
9. The benefits of insurance should not be concentrated only in the urban areas. For
the sake of integrated and balanced development, companies should expand their
operations in the rural areas.
10. Companies should set up its training program for the policyholders. The insurance
academy is used for training the officers and insurance personnel but it has so far
neglected the training of policyholders for which claim submission become complex
and problematic resulting in delays in claim settlement.
11. The government should eliminate the difficulty in licensing procedure and should
not delay in the approval of new companies if all the requirements are fulfilled. It will
help not only to increase volume of business but also solve the problem of
unemployment.
12. The policy holders are very much worried about the settlement of claims.
Ordinary people also consider it as a prime constraint. Therefore, insurance
companies should settle the claims as quickly as possible to create a healthy public
image. For this purpose the claim settlement procedure can be simplified and the
insurers can provide proper written guidelines of claim settlement to the
policyholders.
13. Since life insurance business is not popular among low-income groups, the life
insurers should pay special attention to industrial labor force, which ultimately will
have greater mobility among rural people.
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8.2 Conclusion
Insurance business is only commercial but it has become professional now.
Knowledge of insurance is as much essential as trading business for the society.
Privatization of Insurance business has added more significations for the people. The
prospects of insurance in the first years of the next millennium decide the direction of
insurance management. Safety, security and investment have become need of the
present society people, now, demand insurance as compared to the previous attitude of
selling insurance to people. They have become selective and practical. Insurance
industry has to meet the expectations of people.
Though Popular Life Insurance Company has some negative aspects, but the customer
satisfaction rate is more than any other insurance companies in Bangladesh. Day by day, they
are trying to improve their situation. And, the company is committed to its customers for
providing better services. Here Popular life insurance company limited could improve
its marketing strategy for customer satisfaction. Overall, we can see that Popular life
Insurance Company limited is one of the progressive Insurance Companies in
Bangladesh for its servicing and its better performance.
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Reference(s)
Books
M.N Mishra, "Insurance: Principles and Practice", 10th edition, S. Chand &
Co(2002-2003); page 23-87.
Philip Kotler and Garry Armstrong , "Principles of Marketing" 13th edition,
Prentice–Hall(2010-2011); page 190-222.
Philip Kotler & Kevin Keller, "Marketing Management", 12th edition, Prentice–
Hall(2006); page 17-55.
Internet Sources
Other Documents
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Appendix
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