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United International University

Course Title: Banking and Insurance
Course Code: FIN 3337
Section: B

Submitted to

Nusrat. Farzana
Asst Professor, SoBE

Submitted by:

Name ID
Nowshin Naina 111 151 237
Jobaer hossain munna 111 151 245
Emad Akhter 111 161 087
Mahmudul rimon 111 143 283
Mohammad Minhazul Hoque 114 161 004

Submission Date: 23th February, 2020

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Phoenix Insurance Ltd.

The Phoenix Insurance Company Ltd, one of the first generation leading general
insurance companies in Bangladesh. The Company, headquartered in Dhaka, began operation in
most parts of the country after obtaining certificate on December 1, 1986 and being registered
with the department of insurance on December 4, the same year. Mr. Dean Mohammad,
Chairman of the Phoenix Group in association with Maj. Gen. (Retd) Abdul Mannan Siddiqui
who was the founder chairman along with a group of entrepreneurs founded the company with a
paid-up capital of Tk 30 million.The Company, headquartered in Dhaka, began operation in most
parts of the country after obtaining certificate on December 1, 1986 and being registered with the
department of insurance on December 4, the same year. The company first announced first
dividend for its shareholders on April 21, 1990 and issued prospectus for public floatation of
shares on July 28, 1994. Under the Insurance act of 1938 with the slogan ‘Service for Security’
the Company was listed in Dhaka Stock Exchange Ltd (DSE) on December 4, 1994 and the next
day, launched trading of shares in the DSE. The shares of first trading were valued at Taka 440
each. The first AGM of the company took place at the Sonargaon Hotel Dhaka on October 25,
1995 where all the sponsors, directors, shareholders, employees, clients, members of regulatory
bodies were present. The company issued first bonus share on July 1, 2003 and signed agreement
with CDBL on December 22, 2004. It started de-mat settlement on January 15, 2005. Today, the
paid-up capital of the company stands at TK. 300 million. Apart from business Phoenix always
extends help to its Social Corporate Responsibility as part of its business activity.

The company has 31 branches located all over Bangladesh and provides online insurance
service through most of its branches. The Management of the company is equipped with a cluster
of professionally qualified people, skilled and dedicated stuff to render services to the clients as
well as the community.
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Service of the Phoenix Insurance Company Ltd:

Phoenix Insurance Company offers insurance for:

 Marine Insurance (Hull and Cargo Insurance)

 Fire Insurance
 Engineering Insurance
 Cyclone Insurance
 Earthquake Insurance
 Motor Insurance
 Life Insurance
 Miscellaneous Insurance.
 Flood, Riot and Strike damage Insurance.
 Overseas Mediclaim Insurance.
 Cattle Insurance.

Motor Insurance the Phoenix Insurance Company Ltd:

1. Private Car
2. Commercial Vehicle
3. Motor Cycle.

Category:

Act Liability Policy Form (Third Party): A common policy form for all types of vehicle.

Act Liability Policy (What it covers):

Death : Tk.20,000
Grievous Injury : Tk.10,000
Minor Injury : Tk.5,000
Property Damage : Tk.50,000
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Comprehensive Policy Form: Separate policy forms to be used for private vehicle,
motor cycle & commercial vehicle.

Comprehensive Policy (What it covers): Damage of vehicle is covered in comprehensive

policy-

1. By fire, explosion, self-ignition or lighting.

2. By burglary or theft.
3. By riot & strike including malicious and terrorist activities.
4. By natural disaster.
5. By accidental external means.
6. Whilst in transit by road, rail, inland waterway, lift, elevator or air.
7. Act liability insurance risks.

Required document: Insured must have to submit necessary document to Phoenix Insurance
Company office such as:
 Construction class
 National ID
 Documents of Vehicle purchase and license.
 Perils of Insurance
 Declaration
 Signature and date
 KYC form.

Disclosure and Non-disclosure: If Insured do not answer truthfully, or withhold

information, Phoenix Insurance Company reduces or refuses to pay a claim and/or cancel the
policy. If insured is fraudulent, they may also treat the policy as if it never existed. According to
Phoenix Insurance Company, Insured must disclose every matter, (or could reasonably be
expected to know) which is relevant.

 Minor criminal offences

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 Minor traffic offences

 Previous rejections for insurance cover

 Purchased or declared motor vehicle value

 Very important vehicle type-make/model

 How many seats at insured motor vehicle including drive
 Previous claims for insurance due to a robbery

In all these circumstances the failure to disclose might later affect Insured’s ability to claim. If
any Non-disclosure could be as simple as forgetting to inform the company, insured will inform
agent of the Phoenix Insurance Company. Insured must remember to keep the Phoenix Insurance
Company as an insurer up-to-date. If Insured claim is rejected Insured should firstly find out
what information is missing, he/she may have a good reason for not disclosing the information at
the time. Perhaps Insured were not asked and weren’t aware the information was important. See
if insured can appeal the claim and if not insured can file a complaint with the FOS.

 If car to make it go faster (exposing more risk)

 If moved house and parked your car on a busy street instead of a locked garage.
 Physical and electric malfunction, failing or damage of vehicle.
 When insured motor vehicle is used outside the geographic area.
 When used differing to restriction as to use.
 Driven by a person other than the driver mentioned in driver´s terms.
 If insured lifestyle circumstances change.

Procedure or steps involved in taking Motor Insurance Policy:

For taking any insurance policy there has certain procedure and steps between insured and
insurer. In Phoenix Insurance Company, there have also few steps for taking any policy. Phoenix
Insurance Company has certain procedure which is more or less similar as others insurance
company. Those are given below:-
1. Scrutinizing Un-revoked Offer getting from insured
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2. Taking necessary steps after declaring the written policy worthy of insurance
3. Ensuring if there has insurable interest in proposed subject and object from insured
4. Based on Utmost Good Faith taking necessary steps after knowing properly about
insurable subject.
5. Arranging Risk Inspection survey on proposed Subject of insurance.
6. Properly filling up the Proposal Form from insured along with his/her signature, sill, and
date. And then accepting the form for insurance.
7. Knowing properly about insured and his business good well.
8. Collecting data of Loss history for last few years of insured.
9. After collecting all data and analyzing it then taking necessary steps to provide insurance
policy.
10. Calculating insurance premium based on Tariff Rate.
11. After preparing insurance policy providing money receipt and insurance policy to
insured.
Premium calculation procedure

Premium calculates based on those terms of insured:

 Insurance Class
 Insurance Type
 Vehicle Type
 Vehicle CC
 Tariff Rate
 Full Insurance Value
 Number of Driver & Passengers

Insurance Class: Phoenix Insurance Company offers several insurance to the client. Motor
insurance is one of them.

Insurance Type: Phoenix Insurance Company calculates premium of motor insurance based on
Act Liability, Comprehensive.
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Vehicle Type: Phoenix Insurance Company calculates motor insurance premium based on
vehicle types (Motor cycle, Private vehicle, Commercial vehicle). Vehicle types vary the
premium charge under separate motor insurance policy.

Vehicle CC: Premium Calculation depends on CC or Cubic capacity of vehicle. Vehicle with
higher cc means it has more number of cylinders and higher swept volume.

 The capacity of all the cylinders of the vehicle.

 The power generation of engine
 Product carrying Capacity of vehicle.
 Speed of vehicle.

Number of Driver: Mentioned Number of Driver in driver´s terms consider in premium

calculation.

Number of Passengers: Premium will be high for a large number of passengers carrying in the
vehicle. If fewer passengers will carry vehicles, the percentage of premiums will be low.

Full Insurance Value: Premium will be set by Phoenix Insurance Company according to Full
Insurance Value. Large amount insurance value require high premium.

Tariff Rate: Phoenix Insurance Company is Calculating insurance premium based on Tariff
Rate. The Phoenix Insurance Company Ltd has three types of tariffs in Bangladesh for rating of
motor insurance. These are private car, commercial vehicle and motor cycle tariff. As per tariff,
the rating of motor insurance depends on following factor:

1) Private Car:
 Horse power or cubic capacity of the vehicle
 Insured’s estimated value of the vehicle
 Seating capacity of the vehicle

2) Commercial Vehicle:

I. Passenger Carrying: Type of vehicle

 Insured’s estimated value of the vehicle
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 Seating capacity of the vehicle

II. Goods Carrying Vehicle:
 Carrying capacity
 Insured’s estimated value of the vehicle
2) Motor Cycle:
 Cubic capacity of the vehicle
 Insured’s estimated value of the vehicle

Calculation of Act Liability:

Act Liability Basic 0.00

Driver Amount 0.00
Passenger Amount 0.00
000000000000000000000000000000000000000000000000000000000000000000000000000000
Net Premium 0.00
Vat (15%) 0.00

Gross Premium 0.00

Calculation of Comprehensive:

Comprehensive Basic 0.00

FIV (0.00%) 0.00

Act Liability Basic 0.00

Driver Amount 0.00

Passenger Amount 0.00

Net Premium

0.00
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Vat (15%) 0.00

Gross Premium 0.00

Insurance payment relevant document:

For non-compliant of any rules, how it will be adjusted with the sum insured:
If insured fail to pay the premium within the due time, insured have to submit required document
of payment of premium to Phoenix Insurance Company. Insured have to mention the root-cause
in the document. After those formalities premium have to pay within 90 days with 5% interest.
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Relationship between maturity and premium: Maturity value is the amount the
insurance company has to pay an individual when the policy matures. The Phoenix Insurance
Company Ltd is not providing maturity benefit in motor insurance.

No Claim Bonus: No-claim bonus (NCB) is a discount in premium offered by the Phoenix
Insurance Company Ltd if a vehicle owner has not made a single claim during the term of the
motor insurance policy.

On Comprehensive Policy Private Commercial Motor

Vehicle Vehicle Cycle
1st. Year. No claim made during the preceding year of 30% 30% 15%
insurance
2nd Year.  No claim made during the preceding 2 consecutive 40% 40% 20%
years of insurance
3rd. Year. No claim made during the preceding 3 consecutive 50% 50% 25%
years of insurance

On Act Liability Policy Private Commercial Motor

Vehicle Vehicle Cycle

1st. Year. No claims made during the preceding year of 10% 10% 5%
insurance.

2nd. Year.   No claims made during the preceding 2 20% 20% 10%
consecutive years of insurance.

3rd. Year.   No claims made during the preceding 3 25% 25% 15%
consecutive years of insurance.

Claim Loading in preceding period of Insurance : It is applicable for Own Damage Section
on Private Vehicle & Commercial Vehicle If the insured is not entitle to any NCB & made claim
or claims during the preceding year of insurance, the basic premium at next renewal shall be
loaded in accordance with the following scale:
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Own Damage Section Private Vehicle Commercial Vehicle

One claim in preceding period of Insurance 30% 30%
Two claims in preceding period of Insurance 40% 40%

Claim settlement:

Claim Settlement Procedure of Phoenix Insurance Company: On receipt of loss intimation

through in writing or over telephone the first step is to verify that:

 The policy is in force

 The risks under which the loss is reported is covered under the policy
 The items of properties affected and location of the same is under the scope of policy

After checking the policy a claim is registered and a claim numbers allocated to the Insured. This
claim number is used in all future correspondence for easy reference. A claim form is issued to
the Insured for completion and return with some papers/documents in support of the loss. A
Surveyor is appointed to investigate and report on the cause and extent of loss.

For Motor Claim

1. Copy of G. D. Entry/FIR
2. Copy of Registration Certificate, Tax Token & Fitness Certificate of the Vehicle
3. Copy of Driving Licence
4. Driver’s Statement regarding the accident
5. Copy of Route Permit of the Vehicle
6. Repairing Estimate/Quotation of the damaged Vehicle
7. Police Final Report/Charge Sheet in case of theft loss

After receipt of survey report and required papers/documents if those are found in order then a
claim is settled through payment of the amount recommended by the Surveyor.

Marketing strategy of motor insurance policy of Phoenix Insurance Company

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Phoenix Insurance Company takes several branding and promotional initiatives for their
marketing purpose.
 Phoenix Insurance Company provides the highest priority to their client. It highly committed
to insured and other potential target customer. So, the Management of the company is
equipped with a cluster of professionally qualified people, skilled and dedicated agent to
render services to the clients as well as the community.
 Phoenix Insurance Company keeps available contact and its policy information to client. It
always maintains and updates their insurance service information on their website and
facebook page.
 It put informative advertisement though banner ads, billboard, newspaper for promotion.
 Phoenix Insurance Company involves in CSR activities, sponsorship of media programs and
different show for marketing.
 The company has 31 branches located all over Bangladesh and provides online insurance
service through most of its branches. Phoenix Insurance Company is designed its website by
‘White paper’ company for online services. So that people can easily get their service online
anywhere anytime.
 Phoenix Insurance Company use several tagline for advertisement such as :
 Buying a car is a dream come true. Protect it with the best. Insure your car with
Motor insurance policy
 Don't let the damage on your car affect you. Stay insured with Motor Insurance
policy.
 Don't worry about a sudden breakdown of your two wheeler. Get Insured with the
best.
 Your car is more than just a means of transport. Enjoy complete peace of mind with
Phoenix Insurance’s Private Car policy.
 Your hard earned car deserves every bit of protection. Secure it with the best!
 Your first car is a cherished dream. Don't let the smile fade, Enjoy the ride with a
peaceful mind.
 Insure your car, lest any unforeseen damage weighs heavy on you.
 Secure your car with Phoenix insurance’s Motor Insurance Policy.
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Advertisement:
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Current demand or prospect of selected insurance company in Bangladesh:

In Bangladesh, People selected insurance company based on:

1. Company history/reputation.
2. Understand the insurance company's financial strength.
3. Coverage.
4. Price.
5. Ease of doing business.
6. The power of referrals.
7. Agent of insurance company.

Current demand of Phoenix Insurance's motor insurance policy is day by day increasing in
Bangladesh for those reasons:

 The Phoenix Insurance Company Ltd is well reputed company in Bangladesh. It is one of
the first generation leading general insurance companies in Bangladesh.
 Financial strength of Phoenix Insurance Company Ltd is strong and its growth rate in
market is very optimistic. It’s gross premium increase 2.60% than last year and their total
net income increase 8.18%.
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 The Phoenix Insurance Company Ltd provides 11 types coverage of insurance with lowest
premium rate with maximum coverage in quickest possible time.
 The Phoenix Insurance Company Ltd provides its service in reasonable charge, it also offer
highest no-claim bonus to attract people. So that people will interest to their company and it
can survive in the competitive market.
 Agent of the Phoenix Insurance Company are very cooperative, they helps clients to get all
information about motor insurance policy. As a result, the procedure of motor insurance
policy in Phoenix Insurance Company Ltd is easy and short.

Major Risk of the insurance sector of Bangladesh

The business of insurance is based on dealing with uncertainty. Therefore, an insurer needs to
consider a wide range of possible risks and the outcome that may affect the current and future
financial position. The range of risks more importantly consist of investment management risk,
underwriting risk and Catastrophe risk, besides Actuarial risk, Credit risk, Market risk, Liquidity
risk, Interest Rate Risk, Operational Risk, Foreign Exchange (Currency) Risk, Legal/Regulatory
Risk, Technology Risk, Environmental Risk, Reputation Risk, Country Risk, Asset Liability
Management (ALM) Risk, etc. Some common types of Insurance Risks are given below:

1. Liquidity risk

Liquidity is the ease in which business assets can be converted into cash. This is an important
aspect of consideration for success in an insurance company. Liquidity risks may arise due to a
large number of clams in general insurance and a large surrender of policies in life insurance.
This may lead to a loss of the company property in instances when the company may not be able
to raise the required cash.

2. Actuarial Risks

Actual studies deal with the study of risks and quantifying the amount of compensation accorded
to each risk. Actuarial risks may be caused by different factors such as mortality rate variance,
perils and certain variance. Calculations of the given risks may be subjected to a variety of
adjustments. You may consider current statistical data, some past experience and future
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possibilities but in the future, there will be a great variance in the speculated and the risks
amount.

3. Reputation risks

Reputation risks are faced when an insurance name has lost value in the insurance market. This
has a great impact on the amount of revenue which will be raised by the insurance company. In
the short run, it may not be an easy task to quantify the exact value caused by the reputation risks
but adverse results may pop-up during auditing. In Extreme cases, reputation risks may lead to
bankruptcy.

4. Business risks

Business risks that are faced by the insurance company are just the normal risks faced by many
other businesses. Risks ranging from data breaches have resulted in a loss of the great amount of
relevant data in the insurance industry. Other related business insurance risks include human
capital loss, loss of damage and some of the relevant professional service mistakes that may be
relevant. There is a lot to do when faced with this risks. A lot of professionalism is required to
handle these risks, especially in the insurance industry.

5. Strategic risks

Strategic risks in the insurance sector require excellent strategic management skills to avert risks.
Strategic risks involve the process of identification, assessing and the management of the
insurance strategy.

Case:

On 23may, 1998, a man named Sivanayaitha Perumal, while driving a van hit a bicycle rider
called Charles, who succumbed it injuries from the accident. Charles wife claimed compensation
under the part of vehicle’s insurance that covers third parties. The matter went to court which
decided that since Sivanayaitha Perumal was driving a light motor vehicle (LMV) as a
commercial vehicle, while holding a LMV license for non Transport, the insurer was not liable to
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compensate the deceased’s kin. Instead, the court made the vehicle’s owner liable to pay the
compensation amount to the victim’s family.

Learning:

If the policy has recorded vehicle to be for personal use, using it as a commercial vehicle without
the knowledge of the insurer will get rejected to claim. Insurance companies do not offer the
insured amount if the accident takes place while the car is being driven for a purpose other than
the one specified in the policy.