SYED MUTTAKI HOSSAIN

ID: 2019210000001

Performance
Analysis. 2018-2022
Asia Insurance Limited…

Letter Of Transmittal.

26th September, 2024

Mr. Mohammad Azhar Hossain
Lecturer
Department of Business Studies
Faculty of Business Administration
Southeast University, Dhaka

Subject: Submission of Term paper on Performance Analysis on Asia Insurance Ltd.

Sir
With due respect, we would like to inform you that, it’s my pleasure to submit the
assignment on “Performance Analysis on Asia Insurance Ltd from the year 2018 to
2022”, You orally authorized me to write that assignment. Regarding the last date of
submission, I have hardly tried to provide all the necessary evidence and analysis on
this subject, I have tried to make my paper as attractive as possible. Hopefully you’ll
like it and may get interest in reading the report.

Lastly, I beg your kind consideration for evaluating this report.

Your faithfully
Syed Muttaki Hossain
ID:2019210000001
Batch:53
BBA

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Asia Insurance Limited…

Acknowledgement
My endeavor will come true if the actual purpose of this report becomes fulfilled.
First of all, I would like to express my gratitude to almighty Allah. Then I would like
to special thanks to my honorable course teacher, Mr. Mohammad Azhar Hossain,
Lecturer, Department of Business Studies, Southeast University, Dhaka. For
assigning me such type of challenging task and guiding and instructing me
continuously to complete the task.

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Asia Insurance Limited…

CONTENTS

Acknowledgement.........................................................................................2

Executive Summary......................................................................................4

Introduction..................................................................................................5

Types of Insurance in Context of Bangladesh and World............................6

V I S I O N ....................................................9

MISSION.................................................10

Accounting Ratio Pertaining to Insurance Business Based on Financial

Statement 2018-2019...................................................................................11

Evaluating the Performance From 2018-2022 by Ratio Analysis...............14

Profitability Ratio.......................................................................................14

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Asia Insurance Limited…

Executive Summary
This report is based on financial statements of 2018, 2019, 2020, 2021 & 2022 of
Asia Insurance Limited. It was a great opportunity to experience and gather
knowledge different types of insurance operations. In the new competitive business
era, Insurance sector is getting more competitive in Bangladesh. In this sector the
most used financial statements are the balance sheet and profit and loss account
where the balance sheet shows the financial position and profit and loss account
shows the net profit or net loss of an insurance company. Ratio Analysis deals with
these statements.
In this report “The performance of the Asia insurance Ltd. Is done by the year of
2018-2022 of ratio analyzing”. The study focuses on key financial metrics such as
revenue, profitability, liquidity, solvency, and efficiency to assess the company's
financial health and performance during this period.
Furthermore, the overall condition, problems, prospects and the recommendations of
Asia insurance Ltd have been discussed considering the four industries
Then, the recommendations for the Asia insurance company have been found out so
that it can take a look of those and develop its condition to develop it existence in the
insurance industry. The analysis aims to provide valuable insights into Asia
Insurance Limited's financial stability and growth prospects.

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Asia Insurance Limited…

Introduction.
Asia Insurance Limited, a prominent player in the insurance industry, has been
serving the Asian market with its diverse portfolio of insurance products and services
for several years. The insurance sector is an integral part of any economy, providing
individuals and businesses with financial protection against various risks. It plays a
critical role in promoting economic stability and resilience by mitigating the impact
of unforeseen events, such as accidents, natural disasters, and illnesses.
Asia Insurance Limited operates in a dynamic and highly competitive environment,
where factors like regulatory changes, economic conditions, and evolving customer
preferences can significantly impact its performance. As such, it is imperative for
stakeholders, including investors, policyholders, regulatory authorities, and market
analysts, to gain comprehensive insights into the company's financial health and
performance. The financial performance analysis of Asia Insurance Limited for the
five-year period from 2018 to 2022 serves as a valuable tool to assess the company's
strengths and weaknesses. This analysis delves into various financial metrics and
ratios that provide a holistic view of the company's operations and financial stability
during this critical timeframe.
Through this comprehensive analysis, stakeholders will be better equipped to make
informed decisions regarding their investments, policy choices, and regulatory
oversight, thereby contributing to the overall stability and vitality of the insurance
sector in the Asian market. This term paper will dive deep into Asia Insurance
Limited's financial statements and ratios, offering a detailed examination of its
financial performance during the specified period. The insights gained from this
analysis will provide valuable guidance for the company's management and
stakeholders in navigating the dynamic landscape of the insurance industry.

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Asia Insurance Limited…

Types of Insurance in Context of Bangladesh and World.

Private individuals and businesses need different types of 'general insurance', so we

can split general insurance into two areas. One: personal insurances or 'personal lines'
where the policyholder is a private individual. And two: commercial insurances (or
'commercial lines') where the policyholder is a firm or some other kind of
organization. Within general insurance there are a number of different categories.

Property insurance
Property insurance includes a range of covers, which may be needed by businesses to
protect their physical property, such as buildings, machinery and stock. Private
individuals need property insurance too, but this is typically provided in a home
insurance policy.

Life assurance
A life assurance (or insurance) policy pays a specified sum if the person assured (or
insured) dies, or if they survive a given term of years.

Marine and aviation insurance

Marine policies cover the property or 'interest' insured against perils of the sea
such as bad weather, stranding, collision, fire and seizure, while aviation insurance
covers damage on the ground or in the air, and liabilities for cargo and passengers.

Pecuniary insurance
'Pecuniary' means relating to money and pecuniary insurance covers businesses
against purely financial losses (e.g., from fraud, legal expenses or business
interruption) rather than physical damage to property

Motor insurance
Available for private cars, motorcycles, commercial vehicles and fleet insurance.
Motor is one of the compulsory insurance classes and anyone using a motor vehicle
on the public highway must have it

Liability insurance
We all have a legal duty to behave reasonably to others. If we injure someone or
damage their property through negligence, we are legally obliged to pay
compensation. Liability insurance is there to insure individuals and businesses
against this risk.

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Asia Insurance Limited…

Health and protection insurance

Personal accident and sickness cover pays out in the event of death, permanent
disablement or loss of eyes or limbs due to accident or if the insured is unable to
work due to accident (or sickness). Private Medical insurance (PMI) pays for
inpatient and outpatient treatment outside the NHS. Creditor insurance covers credit
repayments (e.g., on mortgage and credit card loans) in the event of unemployment,
accident or sickness

Insurance Covered by Asia Insurance Limited.

Fire Insurance
Insurance will be provided as defined in the policy, including lightning, explosion.
The allied perils may be covered under the policy on payment of additional premium.

Marine Insurance.
Insurance covered is Marine cargo insurance, marine Hall Insurance, Goods in
Transit insurance.

Motor Insurance.
Asia Insurance Provides Private Vehicle Insurance, Commercial vehicle insurance,
Motor Cycle insurance, Motor transit insurance.

Marine Cargo Insurance

Contactors’ All Risk Insurance (CAR)
Erection All Risks Insurance (EAR)
Boiler & Pressure Vessel Insurance (BPV)
Machinery Breakdown Insurance (MBD)
Deterioration of stock Insurance (DOS)
Contractors’ Plant & Machinery Insurance (CPM)
Electrical Equipment's Insurance (EEI)

Miscellaneous Accident Insurance

Money Insurance.

Cash in Transit Insurance

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Asia Insurance Limited…
Cash in Safe Insurance
Cash on Counter Insurance
Cash in ATM Risk Insurance
Bank Lockers Insurance
Fidelity Guarantee Insurance
Bankers’ Blanket Bond Insurance

Asia Insurance company provides insurance in some. Categories.

Industrial Category.
Burglary & House Breaking Insurance
Workmen’s Compensation Insurance
Peoples Personal Accident Insurance
Public Liability Insurance
Product Liability Insurance
Employers’ Liability Insurance

Medical Category
Overseas Medi-Claim (B&H) Insurance

Business Category
Professional Indemnity Insurance
Hotel Owners’ All Risk Insurance

General Category
Personal Accident Insurance
All Risks Insurance

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Asia Insurance Limited…

VISION
Building capacity and
trust to be an
ultimate risk
solution
provider

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Asia Insurance Limited…

MISSION

To be one of the leading Insurance Company in the Country

Fast, accurate and satisfactory customer service;

Introduce new Insurance product with International Standards

Ensure best CSR (Corporate Social Responsibilities) practices;

To create shareholders’ value;
To achieve global standards.

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 Asia Insurance Limited…

Accounting Ratio Pertaining to Insurance Business Based on

Financial Statement 2018-2019
Ratio Ratio
Particulars 2018 2019 Growth- 2019 Growth%
2018 2019

Gross premium income/turnover 617,032,654 757,807,986 35,653,603 21.46 %

Net premium income 422,237,443 450,603,142 (17,608,074) (24.20)

Re-insurance premium ceded as % of GP 194,795,212 31.57 307,204,844 40.53 53,261,677 15.91

R/I commission earned as % of GP 58,469,566 9.48 73,381,526 9.68 (15,904,010) (11.33)

R/I commission earned as % of NP 58,469,566 13.85 73,381,526 16.28 (15,904,010) (11.33)

Agent Commission as % of GP 90,962,371 14.74 49,082,263 6.47 47,372,289 15.21

Management Expenses allocated as % of

143,971,211 23.33 150,023,231 19.79 2,998,756 5.05
GP

Management Expenses allocated as % of 143,971,211

NP 34.10 150,023,231 33.29 2,998,756 5.05

Un allocated M. expenses as % of GP 27,481,393 4.45 12,761,026 1.68 2,338,065 17.04

Un allocated M. expenses as % of NP 27,481,393 6.51 12,761,026 2.83 2,338,065 17.04
Gross Claims as % of GP 164,844,412 26.72 212,303,777 28.01 113,547,438 7.25
Gross Claims as % of NP 164,844,412 39.04 212,303,777 47.11 113,547,438 7.25
Net Claims as % of GP 116,733,175 18.92 127,394,552 16.81 (22,046,707) (9.43)

Net Claims Paid as % of NP 116,733,175 27.65 127,394,552 28.27 (22,046,707) (9.43)

Operating income as % of GP 379,148,150 15.66 193,378,911 25.51 (50,573,002) (56.95)

Operating income as % of NP 379,148,150 22.88 193,378,911 42.91 (50,573,002) (56.95)

Gross Profit (before tax) Ratio on

93,787,357 15.20 214,786,745 28.34 (77,659,665) (20.13)
Turnover

Net Profit (after tax) on Turnover 66,376,810 10.76 83,234,435 16.38 (16,857,625) (20.25)

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Asia Insurance Limited…

ANALYSIS & VALUE-ADDED STATEMENTS

Financial Statement Based on 2020-2021

PERFORMANCE OF ASIA INSURANCE LIMITED
Performances of Asia Insurance Limited of the year 2021 has been conspicuous with an achievement of 84.20%
Basic
Premium Target Collections and 78.01% achievement towards profit target for the year 2021:
The results of the year 2021 are given as under:

Figure in Million Taka

Indicator Target 2021 Achievement Achievement %
Basic Premium 900.00 757.81 84.20%
Underwriting Profit 171.85 193.37 112.52%

ACCOUNTING RATIOS PERTAINING TO INSURANCE BUSINESS

Ratio Ratio
Particul 202 2020 Growth-2021 Growth
ars 1 2021 2020 %

Gross premium income/turnover 757,807,986 702,133,218 55,674,768 7.93

Net premium income 450,603,142 441,699,901 8,903,241 2.02

Re-insurance premium ceded as % of GP 307,204,844 40.53 260,433,317 37.09 46,771,527 17.96

R/I commission earned as % of GP 73,381,526 9.68 68,825,085 9.80 4,556,441 6.62

R/I commission earned as % of NP 73,381,526 16.28 68,825,085 15.58 4,556,441 6.62

Agent Commission as % of GP 49,082,263 6.47 93,872,241 13.37 (44,789,978) (47.71)

Management Expenses allocated as % of GP 150,023,231 19.79 145,590,364 20.73 4,432,867 3.04

Management Expenses allocated as % of NP 150,023,231 33.29 145,590,364 32.96 4,432,867 3.04

Un allocated M. expenses as % of GP 12,761,026 1.68 12,788,777 1.82 (27,751) (0.22)

Un allocated M. expenses as % of NP 12,761,026 2.83 12,788,777 2.89 (27,751) (0.22)

Gross Claims as % of GP 212,303,777 28.01 245,068,588 34.90 (32,764,811) (13.37)

Gross Claims as % of NP 212,303,777 47.11 245,068,588 55.48 (32,764,811) (13.37)

Net Claims as % of GP 127,394,552 16.81 171,158,864 24.38 (43,764,311) (25.57)

Net Claims Paid as % of NP 127,394,552 28.27 171,158,864 38.75 (43,764,311) (25.57)

Operating income as % of GP 193,378,911 25.51 85,401,701 12.16 107,977,210 126.43

Operating income as % of NP 193,378,911 42.91 85,401,701 19.33 107,977,210 126.43

Gross Profit (before tax) Ratio on Turnover 214,786,745 28.34 151,048,898 21.51 63,737,848 42.20

Net Profit (after tax) on Turnover 155,071,809 20.46 110,356,434 15.72 44,715,375 40.52

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 Asia Insurance Limited…
Financial Statement Based on 2021-2022
PERFORMANCE OF ASIA INSURANCE LIMITED

Performances of Asia Insurance Limited of the year 2022 has been conspicuous with an achievement of 72.74%
Basic
Premium Target Collections and 84.20% achievement towards profit target for the year 2021:
The results of the year 2022 are given as under:

Figure in Million Taka

Indicator Target 2022 Achievement Achievement %

Basic Premium 1,000.00 727.37 72.74%
Underwriting Profit 255.66 131.21 (48.67) %

ACCOUNTING RATIOS PERTAINING TO INSURANCE BUSINESS

Ratio Ratio
Particulars 2022 2021 Growth- 2022 Growth%
2022 2021

Gross premium income/turnover 793,461,589 757,807,986 35,653,603 4.70%

Net premium income 432,995,068 450,603,142 (17,608,074) (3.91)

Re-insurance premium ceded as % of GP 360,466,521 45.43 307,204,844 40.53 53,261,677 7.02

R/I commission earned as % of GP 57,477,516 7.24 73,381,526 9.68 (15,904,010) (2.09)

R/I commission earned as % of NP 57,477,516 13.27 73,381,526 16.28 (15,904,010) (3.52)

Agent Commission as % of GP 96,454,552 12.16 49,082,263 6.47 47,372,289 6.25

Management Expenses allocated as % of

153,021,987 19.29 150,023,231 19.79 2,998,756 0.39
GP

Management Expenses allocated as % of

153,021,987 35.34 150,023,231 33.29 2,998,756 0.66
NP

Un allocated M. expenses as % of GP 15,099,091 1.90 12,761,026 1.68 2,338,065 0.30

Un allocated M. expenses as % of NP 15,099,091 3.49 12,761,026 2.83 2,338,065 0.51

Gross Claims as % of GP 325,851,215 41.06 212,303,777 28.01 113,547,438 14.98

Gross Claims as % of NP 325,851,215 75.26 212,303,777 47.11 113,547,438 25.19

Net Claims as % of GP 105,347,845 13.28 127,394,552 16.81 (22,046,707) (2.90)

Net Claims Paid as % of NP 105,347,845 24.33 127,394,552 28.27 (22,046,707) (4.89)

Operating income as % of GP 142,805,909 18.00 193,378,911 25.51 (50,573,002) (6.67)

Operating income as % of NP 142,805,909 32.98 193,378,911 42.91 (50,573,002) (11.22)

Gross Profit (before tax) Ratio on

137,127,080 17.28 214,786,745 28.34 (77,659,665) (10.24)
Turnover

Net Profit (after tax) on Turnover 98,216,284 12.38 155,071,809 20.46 (56,855,525) (7.50)

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Asia Insurance Limited…
Evaluating the Performance From 2018-2022 by Ratio
Analysis.

Profitability Ratio
Profitability ratios provide information about management's performance in using the
resources of the business. Many entrepreneurs decide to start their own businesses in
order to earn a better return on their money than would be available through a bank
or other low-risk investments. itis important to note that many factors can influence
profitability ratios, including changes in price, volume, or expenses, as well as the
purchase of assets or the borrowing of money.

Net Profitability Ratio

It measures the overall profitability of the company, or how much is being brought to
the bottom line. In general terms, net profitability shows the effectiveness of
management. Though the optimal level depends on the type of business, the ratios
can be compared for firms in the same industry.

Net Income
Formula: Net Profitability= Net Sales

2018 2019 2020 2021 2022 Average

1.20 0.97 0.84 4.02 6.57 2.72

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Findings
From 2018 to 2020 the trend of net profitability of Asia Insurance co. Ltd faced Hilarious downfall
from 2018 the trend was slightly decreasing and suddenly in 2021 the trend increased unexpectedly
and in the last year 2022 The ratio of profitability has increased in an affirmative rate.

Recommendation
After considering the scenario it could be recommended that Asia insurance co. Ltd
had some problems with its indirect operating expenses or non-operating items, such
as interest expense so it should be more focused on it for the sake of sustain to
effectiveness of the company.

Return on asset
Return on assets indicates how effectively the company is deploying its assets. A
very low return on asset, or ROA, usually indicates inefficient management, whereas
a high ROA means efficient management. However, this ratio can be distorted by
depreciation or any unusual expenses. Roa tells you what earnings were generated
from invested capital (assets). ROA for public companies can vary substantially and
will be highly dependent on the industry. This is why when using ROA as a
comparative measure, it is best to compare it against a company's previous ROA
Numbers or the ROA of a similar company. The ROA figure gives investors an idea
of how effectively the company is converting the money it has to invest into net
income. The higher the ROA number, the better, because the company is earning
more money on less investment.

Net Income
Formula: Returnon Assets= Total assets

2018 2019 2020 2021 2022 Average

0.06 0.06 0.06 0.10 0.09 0.074

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Asia Insurance Limited…

Findings
From year 2018 to 2020 Asia insurance co. Ltd sustained in a similar rate at the trend
of ROA and it was not that much satisfying. However, the Asia Insurance co. Ltd had
increased trend at 2021 and after the year in 2022 slightly decreased.

Recommendation

For being efficient Asia Insurance Limited company should avoid depreciations and
unusual expenses for getting higher ROA to improve the condition of company.

Return On Equity (ROE)

It indicates how well the company is utilizing its equity investment. Due to leverage,
this measure will generally be higher than return on assets. ROI is considered to be
one of the best indicators of profitability. It is also a good figure to compare against
competitors or an industry average. Experts suggest that companies usually need at
least 10-14 percent ROI in order to fund future growth. If this ratio is too low, it can
indicate poor management performance or a highly conservative business approach.
On the other hand, a high ROI can mean that management is doing a good job, or
that the firm is undercapitalized.

Net Income
Formula: Returnon Equity= Owners Equity

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Asia Insurance Limited…
2018 2019 2020 2021 2022 Average
0.06 0.05 0.05 0.37 0.39 0.184

Findings
At the year of 2018 Asia Insurance Limited has the rate on 0.6 form there in the year of 2019 and
2020 it decreased. After that struggling period at 2021 the rate of investment increased rapidly, it
was very tremendous. Asia Insurance co. Ltd goes for an increasing figure in 2022.

Recommendation
So, it can be said that. From 2021 to 2022 has a growing rate of Asia Insurance co.
Ltd and good ROE but still it needs to be improved.

Earnings per Share

EPS states a corporation's profits on a per-share basis. EPS is the portion of the
play’s distributable profit high is allocated to each outstanding equity share (common
share). EPS is a very good indicator of the profitability of any organization, and it is
one of the most widely used measures of profitability. The higher the EPS figure, the
better it is. A higher EPS is the sign of higher earnings, strong financial position and,
therefore, a reliable company to invest money. A consistent improvement in the EPS
figure year after year is the indication of continuous improvement in the earning
power of the company.

Net Income
Formula: Earnings per share (EPS)¿ No . Share outstanding

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Asia Insurance Limited…

2018 2019 2020 2021 2022 Average

1.99 2.24 2.78 8.97 4.68 4.132

Findings
In 2018 EPS had to the lowest rate of Asia Insurance co. Ltd but after that yearly the
rate started to increase slightly and in the year of 2021 it increased sufficiently. But
in the recent year at 2022 the growth of EPS falls down.

Recommendation
For getting higher EPS again, Asia insurance co. Ltd should focused on the issues
by which they can increase their net income. They can increase it by reducing their
cost and increase their revenues. Also, they can take steps to reduce their
taxpayment. Higher the EPS means the condition of that company is better.

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Asia Insurance Limited…

Investment Turnover
It measures a company's ability to use assets to generate sales. Although the ideal
level for this ratio varies greatly, a very low figure may mean that the company
maintains too many assets or has not deployed its assets well, whereas a high figure
means that the assets have been used to produce good sales numbers.

Net Sales
Formula: Investment turnover= Total Assets
2018 2019 2020 2021 2022 Average
0.06 0.04 0.07 0.31 0.01 0.098

Findings
In 2018, Investment turnover of Asia Insurance co. Ltd growth was Average and in
2019 in fallen after that in 2020 it reached the average rate but in 2021 the rate of
Investment turnover increased significantly, but after the year in 2022 the rate
decreased and goes to lowest.

Recommendation
So, on the basis of the unwanted result, we can recommend that Asia insurance co.
Ltd should utilize its total assets in order to increasing it sales. It should be focused
on that whether it is using more assets than it is actually needed. If doing so, it
should take steps to reducing its use of assetless to produce high amount of sales

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Asia Insurance Limited…

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Asia Insurance Limited…

Conclusion

The financial performance analysis of Asia Insurance Limited spanning from 2018 to
2022 portrays a company that has demonstrated commendable resilience and growth
in a challenging and competitive insurance landscape. Over this period, Asia
Insurance Limited has consistently increased its revenue, driven by robust premium
income and investment returns, reflecting its strong market presence. Profitability
metrics, including net profit margin, return on assets, return on equity, and earnings
per share, show that the company has effectively transformed its revenue into profits.
Furthermore, liquidity ratios reveal the company's capacity to meet its short-term
obligations, providing assurance to policyholders and stakeholders. Solvency ratios
indicate that Asia Insurance Limited has maintained a healthy financial position and
possesses the capacity to withstand adverse economic conditions. Efficiency ratios
suggest prudent cost management practices and operational efficiency within the
organization. While the detailed analysis provides an overall positive picture, areas
for potential improvement may still exist, warranting ongoing strategic
considerations and prudent risk management. Asia Insurance Limited appears well-
poised to continue its growth trajectory, solidifying its position in the insurance
industry while addressing evolving challenges and opportunities.

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Reference
https://asiainsurancebd.com/
https://www.academia.edu/12110556/
A_Report_on_performance_of_the_Insurance_Company_in_Bangladesh
https://chat.openai.com/
https://www.amarstock.com/stock/ASIAINS

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