Assignment onContribution made by Green

delta insurance in the economy of Bangladesh

Prepared for:Jannat begum

Course instructorOf

Principle of insuranceSchool of business studies

OfSoutheast university

Submission date: 09-07-09

Introduction:

Origin of the Green Delta insurance company :

Green Delta Insurance Company Limited (GDIC) is one of the leading and old general insurance companies in Bangladesh. For many years it is continuing there successful general insurance business in Bangladesh.

The Company was incorporated on December 14,1985 as public limited company under the companies act 1913 with a paid up capital of Tk.30,00 million, It Started its operation on January 01, 1986, Under Insurance act 1938 with the slogan of "Marches with time". GDIC was listed in Dhaka Stock Exchange (DSE) on January 12, 1990 and Chittagong Stock Exchange (CSE) on October 21, 1995.

The Company is an "A" category company in both DSE & CSE according to the categorization of the Securities and Exchange Commission. Its year-end shares price stood at taka 702.00 in FY 2003 (face value being Tk.100). During the last 19 years, GDIC has achieved a good market reputation in the General insurance business, introduced a number of new products in the market and established a strong branch network of 34 in six different zones all over the country.

Its backgrounds at a glance:

December 14, 1985-*Incorporation of the companyJanuary 02, 1986-*Signing of First Insurance BusinessDecember 31, 1989-*Increase of Paid up capital to BDT 60January 12, 1990-*Listing with Dhaka Stock ExchangeOctober 21, 1995-*Listing with Chittagong Stock ExchangeMay 10, 2004-*Agreement sign with CDBLJuly 18, 2004-*Start up Demat settlementMay 11, 2005-*Launching of Islami Takaful InsuranceMay 12, 2005-*Purchase of DSE membershipJune 12, 2005-*Formation of Green Delta Aims Ltd

Its vision:Green delta insurance company is always determined to satisfy their customer in providing utmost good faith by serving there services. There vision is to mature into a sustainable, coherent organization. Raise competitiveness to the highest level in the Insurance industry, maintain high profitability and balanced quantitative growth and exceed customer's expectations by offering legendary services, embrace a new corporate identity and creative corporate culture.Its mission and strength:

There mission is to create shareholders value through customer's satisfaction and employees commitment to excellence.

2

This company doing their business from many years in Bangladesh. This company is the most popular insurance company among the insurance companies in last one decade. Constant pursuit of suitable strategies has made the company the leading insurer of Bangladesh for over two decades.

Authorized capital of Green Delta insurance company:

Green Delta Insurance Company Limited (GDICL) incorporated on 14 December 1985 in Bangladesh as a public limited company under the companies’ act 1913. It went into operations on 1 January 1986 as a general insurance company with an authorized capital of Tk 100 million divided into 1 million ordinary shares of Tk 100 each. On 31 December 2000, Beginning paid up capital of the green delta insurance company:Its paid up capital was Tk 60 million. The company is listed with both Dhaka and Citation stock exchanges. The company has built up a reserve and asset base to ensure long-term growth and sustainable income base and it maintains an exceptional loss reserve, which amounted to Tk 15.50 million in 2000. Total reserves of the bank at the end of that year were Tk 232.20 million.

Amount of money of green delta insurance company’s that has been received by its shareholders who have completely paid for their purchased shares are given below. According to recent year’s annual reports their authorized and paid capital

amounts with their share issued Paid up is:

Source: annual reports of green delta insurance company ltd.2007

That’s mean this company has 6000,000 paid up shares against their authorized share. This company is a higher listed insurance company in share markets, and it has gain their share holders faith as they are becoming one of the most growing insurance company in Bangladesh.

The company is listed with both Dhaka and Chittagong stock exchanges. The company has built up a reserve and asset base to ensure long-term growth and sustainable income base and it maintains an exceptional loss reserve, which

3

amounted to Tk 15.50 million in 2000. Total reserves of the bank at the end of that year were Tk 232.20 million.

Management hierarchy of the Green Delta insurance company limited:

Green delta insurance company is well known insurance company in Bangladesh. It practices a well instructive and organized management hierarchy from the first to last. In this company many employees work in their different branches and every branch follows their company rules and code and hierarchy management.And their hierarchy is given below:

And in management there are other 16 manager directors are also precipitate in company’s different decisions. And in their executive level various and numerous employees are related in different branches and division of the office branches.

According to this hierarchy company takes their different decisions. Generally in every branch they follow simple management hierarchy like from the order first the head branch manager, after that the addition branch manager, and then the underwriter and then the human recourse manager, financial manager, accounts

ChairmanDr. Kabir H. Choudhury

Vice ChairmenFarzana Chowdhury A. Farida

Ahmed

Farzana Chowdhury A. Farjad Ahmed

Managing Director & CEO

Nasir A. Choudhury

AdvisorA. S. A. Muiz

DMD (F & A, HR & Admin)

Nazim Tazik Chowdhury

UnderwritingMr. Alauddin Gazi

(DMD)

Human Resource Division

Syed Kaiser Ahmed

4

manager, and marketing manager are situated in flat and same management line.

Branches of the Green Delta insurance company of Bangladesh:

Green delta insurance companies most of initial and main branches are held in Dhaka and Cittagong. And other districts have some few branches also. As insurance is mainly general related so green delta spread their business only in main capital city of the districts.

Generally according to the recent information in this insurance company at least 8000 employees are working in different branches and divisions in Dhaka, syellet, chittagong, khulna and other different districts in Bangladesh. As Dhaka is the main capital and chittagong is main trade sea ports of the Bangladesh, that’s why most of branches of green delta insurance company’s are situated in this districts.And the name of the branches according to their divisions and districts are given below:

Branches of Green Delta insurance company are in Dhaka:

1. Principal Branch

2. Gulshan Branch

3. Imamgonj Branch

4. Elephant Road Branch,

5. Nawabpur Branch

6. kawaran bazar branch 7. : Mohakhali Branch, Dhaka

8. Dhaka EPZ Branch, Savar

9. Uttara Branch

Branches in Chittagong:

10.Principal Branch, Chittagong

11. Khatungonj Branch

5

Other branches in different districts:

10. .Name of the Branch : Narayangonj

11. .Name of the Branch : Narsingdi Branch

14. Name of the Branch: Sylhet Branch

15. Name of the Branch: Moulvi Bazar Branch, Sylhet 16. Name of the Branch: Barisal Branch . 17. Name of the Branch: Pirojpur Branch

18. Name of the Branch: Faridpur 19. Name of the Branch: Jessore

20. Name of the Branch: Noapara .21. Name of the Branch: Khulna

22. Name of the Branch: Kushtia 23. Name of the Branch: Madaripur

24. Name of the Branch: Bogra

25. Name of the Branch: Dinajpur

26, Name of the Branch: Pabna Branch

27. Name of the Branch: Rajshshi

28. Name of the branch: Khishorgonj

29. Name of the Branch: Bhairab 30. Name of the Branch: Mymensingh

31. Name of the Branch: Tangail 32. Name of the Branch: Tangail 33. Name of the Branch: Chaumuhoni Branch

34. Name of the Branch: Comilla

6

35. Name of the Branch: Habigonj Branch, Sylhet In 2000, the company had 35 branches in different places of Bangladesh. Its headquarters is at Dhaka. Its management team of 34 executive officers is headed by a managing director, who is also the member-secretary of the company's 29-member board of directors.

And green delta insurance company insurance company spread their products lines in different rural and city areas through their branches. As their insurance policy are general related that’s why they mostly emphasis on peoples demands and needs of general insurances.

And that’s why they set their Branches in city area of the districts and important places .where they can provide corporate, financial organizations and general people’s health’s security through their services as much as possible.

Though it is general insurance company and its services are related to the risk management and security of corporate and financial, and people’s health, they held their branches in huge business and financial organization situated place and markets. From the above branches address it can identified that they try to distributing their branches in huge corporate markets and places of districts of Bangladesh.

Policy description:

Insurance product line offered by the green delta insurance company :

The company conducts general insurance business according to the Insurance Act 1938. It underwrites risks involved in trade and properties and thus provides their security through insurance and reinsurance services.

Major risk underwriting businesses of the company covered fire insurance, marine cargo and hull insurance, motor insurance and miscellaneous insurance. The company participates in co-insurance business and it re-insured risks undertaken with the Sadharan Bima Corporation.

Green delta insurance company is well known general insurance company of

Bangladesh. Because it’s provides lots of services for big industry, company and

also cover a lot of problem of different sector by providing following services:

Corporate Risk Management Property All Risks Insurance including Business interruption

7

Electronic Equipments and Computer insurance Corporate Hospitalization coverCorporate Overseas Health policy

FinancialPortfolio cover Credit card Protection Insurance Bankers Blanket Insurance Money Insurance Ideality Bond

ConventionalFire & Allied Perils Insurance Marine Cargo & Hull Insurance All types of Aviation Insurance All types of Automobile InsuranceAll types of Accident, Miscellaneous & Liability Insurance All types of Engineering Insurance

Takaful (Islamic)All types of (non life) Takaful Products

Investment & Portfolio ManagementUnderwritingPre-IPO placement SyndicateTrusteeship

Subject matter in insurances of Green Delta insurance company:

Some alternative way of insurance services which are generally provided by green delta insurance corporation classification those are as followsProperty:Fire & Allied.Burglary & house breaking.Industrial all risk.Machinery breakdown.Contractors all risk Erection all risk.Deterioration all risk.

Movable property:Marine Hull.Marine Cargo.Vehicle.Aviations.

8

Cash In Transit

Personal: Health.Personal Accident.Hospitalization.Dread disease.

Liability:Fidelity.Workers Compensation.Public Liability

Followings are the subject matters of the general insurances of green delta insurance

Green Delta insurance company’s branches and number of employees and their contributions in economy:

In 2000, the company had 35 branches in different places of Bangladesh. Its headquarters is at Dhaka. Its management team of 34 executive officers is headed by a managing director, who is also the member-secretary of the company's 29-member board of directors. As green delta insurance company has many branches in different area in Bangladesh, and on that each and every branches numerous peoples work in different level and hierarchy of the company. According to the data of this company its have 35 branches all over the Bangladesh. And in every branch the top management hires most efficient and experienced employees whom can lead the company growths more ahead.

Among the all employees of this company most of the employees work in Dhaka branches. Because in Dhaka they have 9 branches that is more from other regional districts in Bangladesh. As Dhaka is the main center of the corporate businesses and financial institutions, that’s why most of the green delta insurance company’s branches situated here.And in these branches neuemeras emplyoyees work which is out numbered from other regional branches of green delta insurance company.

9

Green delta insurance company contributing in economy of Bangladesh by reducing unemployment’s and through spreading their business and branches all over the country. Its employee also contributing in our economy through their income tax and services.

As green delta insurance company is large spreading insurance company which is helping peoples, corporate business and financial institution by providing security, risk portfolio services and health security. That’s mean this company helping to reduce the national waste and prevent losses from unseen contingency.As in this company huge number of peoples is working and in future there will more person will be hire. That will help an economy by creating job security and options for unemployed people and then it will lead social peace.

So it can say that as a fastest growing insurance company, green delta insurance company has a huge job market in the society. And that will just not help an economy by their insurance services also help providing job security and services for the common people of this country.

Education and training provides by the Green Delta insurance company:

Green delta insurance company is not only intending to do business or profits. They also try to provide some education and trainings facilities for their employees through all over the world as much as possible.Green Delta is proud to be a company that helps people in time of trouble. A company that can and does pull all steps when it is needed. Like the country we are young and have blended thier youthful vigor with specialized knowledge and experience.

The Board of Directors includes veterans of insurance, trade & industry, doctors, chartered accountant, business professionals. Their management team always tries to comprise of qualified professionals trained from UK, Switzerland, Germany and many other advanced countries. The company is headed by Mr. Nasir A. Choudhury who is prominent person in Bangladesh insurance Industry.

According to the green delta insurance company’s information they sent their management team to improve their insurance business policy and services in different foreign country.Recently many employees of management team of green delta insurance company went Malaysia, kingdom of Bahrain, and India also for participating in different trainings and professional education related to the insurance industry.

These companies always try to improve their quality business and to expand the insurance business allover the world, they provides different seminar, training course for their employees. Like:

10

Recently Four officials from Green Delta Insurance Company Ltd. attended the Comprehensive Technical Programmed in General Insurance, organized by National Insurance Academy, PUNE. National Insurance Academy is an "A" Rated academy that is quite conductive to learning and educative interaction in insurance education with its excellent infrastructure. The duration of the course was 21 days and participants got both experience in theoretical and practical matters by the qualified and experienced faculties about insurance.

The Green Delta Insurance Company Limited recently arranged three day training on Fire Insurance for its 14 officers and branch in charges at the head office in the Dhaka. This training is held for to participants to prepare themselves as efficient officers to shoulder the responsibilities of the company in the years to come.

Their high management sometimes join in many international conferences in many developing subjects of expand insurance businesses and how to be more effective in insurance policies.

According to the information this insurance company held their training course, education facilities about insurance for their qualified employee’s more than any insurance companies of the Bangladesh.

Research and awareness buildings:

Green delta insurance company always intend to do research on insurance business and increase awareness about insurance policy for general people of this of this country.As insurance is an important element to risk management of various unseen contingency situations. And Bangladesh always in grave risk for the financial recessions and weather calamities from other countries of the world.That’s why green delta insurance company tries to research on different insurance policy according the peoples of Bangladesh and the other opportunities of insurance contingency.

This company’s top management always tries to held different seminar and researches on their product lines and the subject matters on their insurance. Their most of research hold on:

How to improve quality of the insurance policy. How to diversify the big risk insurance policy. How to improve quality insurance management. Which policy is suitable and demand of peoples of the country. And identify the good insurance policy and possibilities related to general

insurances.

As in Bangladesh insurance is not huge practicable business and it is unknown by the most of the people. Green delta Insurance Company also makes awareness about their insurances policy among the people to expand the insurance industry in the Bangladesh. And the subject of their making awareness of insurances is:

11

Increase advertisement about their products line services. Give a clear idea to people about insurance policy. By making awareness risk can be diversifying. More awareness means more insurance which increase investment and

growth to the economy. By awareness expand the insurance business in rural and capital area of

the Bangladesh. Making contact and meeting with different corporate businesses to give

idea about insurance policy and how insurance will help them by risk diversifying.

Research and awareness is the main elements of an insurance business as without it’s an insurances company can move forward to have a good business. It is very much important for a insurance company that to know about policy identifications .good risk, bad risk company,Good and bad risk policy through research. And need to know the demand of the peoples about insurance and influence them to take insurance to minimum the wastes of money.

Social responsibilities of Green Delta insurance company:

Green delta insurance company is one of the oldest insurance companies in this country. From the beginning of this insurance business they try to help the economy and the society by their different programs and services.As it is the leading and most growing insurance business they know that they have some social responsibilities and they always try to fulfill that.Through their insurance services they play a very important role to the society by reducing risk and problems after an unseen contingency happens.

As a reputed corporate citizen, GDIC always avails opportunities to make positive contribution to the community. As a gesture of goodwill, GDIC has been sponsoring sports activities, besides patronizing cultural activities in the country since its inception.

In addition to contributing to support of different social activities, GDIC is the proud sponsor of 1st and 2nd Division Hockey League since 1987. This year, GDIC has sponsored Premier Division Cricket League for the second time. GDIC had also sponsored National School Table Tennis, Youth Swimming Competition etc. in time to time. By sponsoring the sports its help the society to increase the sports spirit of the player and entertainment of the people. And for lack of sponsor many games are sometimes don’t get proper encouragement to continue in national level. But green delta insurance company helps those forbidden games to come up in front to show and get encouragement to continue their games in future.

Bangladesh is a country of natural calamity. GDIC at all times extends its hands for the people who are affected by these natural calamities. In 2004 GDIC's employees contributed their one-day salary to the Prime Minister

12

Relief Fund for the flood-affected people of Bangladesh. As well in winter, we distribute winter clothing to the poor people and all these activities are a part of our humanitarian efforts.

And not only above contributions this company always fulfills their responsibility towards their employee’s death; they give moral and financial supports to their family. And they give donation on different disasters calamities of Bangladesh.It is shown that Green delta insurance company giving a huge contribution in society to in different calamities, problems and helping the society by their services.

Investments portfolio of Green Delta insurance company limited:

As insurance company business are related to taking premium from insure, Green delta insurance is the top insurance premium taker from the people in Bangladesh. So they have huge possibilities to invest in different capital markets and investment sectors.

Source: annual reports of green delta insurance company ltd.2007

As we can see that Green delta insurance company is the highest premium earners from the other insurance company so they are capable to invest high amount in investment sectors.Investment incomes of the company were Tk 39 million in 2000. It has also received the first dividend of 7.50% from its investment/venture capital financing in delta brac housing Finance Corporation. Other constituents of the company's investment portfolio were Pratirakkha Sanchaya Patra and shares and debentures of various companies. Total assets of the company were valued at Tk 601.30 million at the end of 2000.

13

The company started to earn net profits since the second year of its business operations. It earned about Tk 21.30 million as profits in 2000 and had paid a dividend @ 35% every year between 1996 and 2000.

Source: annual reports of green delta insurance company ltd.2007

From the information it is seeable that green delta insurance company invests in different investment sectors from their premium and profits earnings. And their most of the income come from their investments and premium of their customers. They invest in capital and secondary markets in big amount and their investments are related to the private sectors.

And their most of the investments are very significant movement for the economy growths of Bangladesh. As they are most growing insurance company of the Bangladesh, they have a great opportunity to invest in huge investment projects.And it will help very much to the economy by improvement of job markets for unemployed people, national income, GDP growth and other social security.

Much investment will bring many opportunities of job and income and GDP growth. So it can be said that the green delta insurance company fulfilling a great responsibility towards the economy of Bangladesh by their huge investments in share markets and private sectors.

Tax payments of Green Delta insurance company limited: Green delta insurance company is a large and most profitable insurance company among the insurance company’s of the Bangladesh. And its profits are much from other general insurance company’s of this country. As a well responsible company of a country they paid a huge amount of tax to the governments. And they pay tax on the basis of their net incomes. Day by day their tax payments trends are increasing which is contributing to our economy in large side’s national income and GDP.

14

In 2006 they 16,567,183 taka tax to government and 2006 they paid 17,890,761 taka and in 2007 they paid more than 18,000,000 taka. That’s mean the green delta insurance company just not fulfilling their social responsibility by their services and donation or sponsorships, they also fulfilling their corporate responsibility as well as well that was defined. And by this green delta insurance company set up a new idol for insurance business through their social and corporate responsibility for other insurance company of the Bangladesh.

Profits of Green Delta insurance company limited :

The green delta insurance company operates successfully and maintained progressive profitability throughout the whole period of its business except the year of commencing operations. It earned satisfactory premium income, the gross amount of which was Tk 301.30 million in 2000.

The net premium also increased each year and stood at Tk 172.70 million in that year. The claim expenses of the company were comparatively lower and this helped it in accumulating higher profits. And this company is continuing their success in earning profits after every year of 2000.below there is given the profits trend line of green delta insurance company:

2006 2005 2004 2003 2002

{Taka in million}

From above it is seeable that company has a growing profit from 2002 to 2006 .which showing they earning large premium amount from their customers and investment return and has less claim from their insures. In 2006 its profits has been reduced but in 2007 it increase in 50.2 million. That indicates a very good business trend for a company. And as it has share in SEC according to annual reports of Green delta insurance company they give increasing dividend amount to their share holders in year 2002 to 2006. And the data are given below:

2006 2005 2004 2003 2002 {Taka in million}

From 2002 to 2006 this company gives their share holders an increasing rate of dividend. It’s a prove that this company is growing day by day and contributing

15

the economy by their expanding business. In the rescission time of economy they constantly are doing well in their profits and business which very much good for company’s shareholders and its customer also.

Claims payments of the Green Delta insurance company ltd:

Green delta insurance company is the huge premium earners among the insurance company. So they have large customer in insurance policy from others. So having large customer means large liability and risks. And this company is very much intending to fulfill their insurance agreement with their customer.They always try to pay the claims of insurance taker in time and according to agreements. They paid the claims amount in the subject matter of the insurance agreements with the insures. They paid a large amount of claims during to 2002 to 2006 and their amount is given below:

2006 2005 2004 2003 2002

{Taka in million}And they paid the claims amount in 2006 according to insurance policy with customer is:

And their claims amount is increasing like their earning of net premiums increasing from their customers. And they always follow the all rules of insurance policy according to their company and government also.Before the claims they research about the agreements incidents and real incidents, if there is no breach of contracts then they paid the claims amount as quick as possible.

16

In big amount claims the company properly examine the incident against which customer is claiming the insurance amount, if the company satisfies the examination results they goes for to payments. Mostly big amounts are given in installments or in a long time periods.

Contribution of Green Delta insurance company ltd in Bangladesh economy and society:

A world without insurance is more daunting, poorer and stagnant place. The insurance industry has improved peoples lives in many crucial areas. Insurance allows new technology and products to be tested without the fear that failure would bankrupt their promoters.Green delta insurance company limited contributes lots to the Bangladesh economy as a growing and reliable insurance company. As it is a general insurance company which related a vase area of insurance policy it is most popular from Life Insurances and also its premium amount is high from life insurances. That’s why this company deals with large risk and money also.

This insurance company fulfills their responsibility not only towards the customer of their, they also have a huge contribution to the economy of Bangladesh also and those are:

By giving social safety and peace of mind. In the hierarchy of human need safety and security come on fulfillment of food, cloth, housing, medical and education. To that extent insurance provides certainty, it helps individual or business by improving the efficiency of actions by reducing anxiety.

Credit economy is impossible today without insurance. Fire insurance is invariably required by mortgagees while loan money takes away real or personal property as collateral. And this company provides fire insurance policy for the corporate and marine business also.

An insurance premium, though small in relation to the possible loss it protects against, is basically a prepayment in advance of potential loss. All the payments are gathered together to form a fund from which those few who do suffer losses are paid. In essence, the plan of insurance encourages all to save so that unfortunates can be repaid for their losses.

That’s mean insurance premium help regain the losses amount from accidents. And it reduces the time and losses of set up the work again. That is very much helpful for economy for less waste of time and money. The savings held by insurance companies provide a great source of

important capital of economy. That’s mean the savings of the green delta insurance company contributes huge investment in the economy. Which increasing development of the country in high rate.

Much investments decrease much unemployment’s of the country. Green delta Insurance Company all over the world spent huge amount of

money for research in various fields of risk management and loss prevention. That becomes a considerable source of specialized and scientific information on various fields of risk and loss prevention.

17

Bangladesh is a full of natural calamities and the insurance of this company help to reduce those calamities losses and risks.

Claims amount of insurance help the insured’s to set up the business again in time there is less possibilities to the production or business for any incidents.

Mostly green delta insurance company take insurance about fire, marine, money security, corporate business money security and help to recover the losses if the insures incidents happens. Through this company contributes the economy bay spreading risk in many people. Because huge money losses can bring slowness in economy. and where insurance company give service to divided the risk and help to recover the risk

Mainly green delta insurance company provides the peace of mind of insured’s and help to save money which brings in society the peace and ultimate growth to economy.

Conclusion:

This Company is a "A" category company in both DSE & CSE according to the categorization of the Securities and Exchange Commission. Its year-end shares price stood at taka 702.00 in FY 2003 (face value being Tk.100). During the last 19 years, GDIC has achieved a good market reputation in the General insurance business, introduced a number of new products in the market and established a strong branch network of 35 in six different zones all over the country.

Growing need of insurance with demand of growing economy, the demand of insurances also creating with the change of technology in insurance business. To cope with this diversified demand of insurance for the new millennium as well as the high value risks, the green delta insurance company is keeping pace with the change.

Though this insurance company playing a very important role in the economy of Bangladesh. Cause it’s a large growing and most promising insurance company among the insurance company of Bangladesh. And its business is expanding in share markets and corporate area also. And it is noticeable that this growing company is contributing much from other business industry .that will help to the insurance industry to lead a successful business and relation with their customers like Green delta insurance company.

The need for insurance

18

Bibliography:

Book : Risk and insurance by Azizul Huq Chaudhuri Websites : www.greendelta.com The daily star news paper

19