Internship Report on Financial Analysis of Delta Life Insurance Company Ltd.

Internship Report

On

Financial Analysis of Delta Life Insurance Company Ltd.

Supervised By

Mr. Mrinal Kanti Paul

Assistant Professor

School of Business

Prepared By

Manas Saha

ID: 11.01.02.102

BBA Program

Major in Finance

Date of Submission: 10/09/2015

Letter of Transmittal

10 September, 2015

Mr. Mrinal Kanti Paul

Assistant Professor

Ahsanullah University of Science and Technology

Subject: Letter of Transmittal

Sir,

I have much pleasure to submit herewith a copy of Internship report on “Financial Analysis of

Delta Life Insurance Company Ltd”. I would like to express my sincere gratitude to you for your

support and encouragement.

I have done my internship in Delta Life Insurance Company Ltd. during three months attachment

period. The report focuses on the financial analysis of Delta Life Insurance Company Ltd.

This report has been submitted in partial fulfillment of the requirements for the degree of

Bachelor of Business Administration (BBA), Major in Finance, School of Business. I hope the

report meets your expectation. I will be glad to answer any queries regarding the study and

report.

Thanking You

Sincerely,

Manas Saha

ID: 11.01.02.102

BBA Program

School of Business

Letter of Endorsement

The Internship Report entitled “Financial Analysis of Delta Life Insurance Company Ltd.” has

been submitted in partial fulfillment of the requirements for the degree of Bachelor of Business

Administration (BBA), Major in Finance, School of Business on 10th

September 2015 By Manas

Saha, ID# 11.01.02.102. The report has been accepted and may be presented to the Internship

Defense Committee for evaluation.

Mrinal Kanti Paul

Internship Supervisor

Assistant Professor

School of Business

Ahsanullah University of Science and Technology

Acknowledgement

I would like to thank all who support me to complete my internship report. I also want to thank

all the people who have given their support and assistance and extremely grateful to all of them

for the completion of the report successfully. Ahsanullah University of Science and Technology

and Delta Life Insurance Company Ltd. both provided me with enormous support and guidance

for my report to be completed successfully.

I would also like to thank my internship supervisor Mr. Mrinal Kanti Paul, Assistant Professor,

School of Business, for his kind concern, valuable time, advice and constant guideline in

preparing the report.

I would like to thank Dipak sir, incharge, Cell-1, for their support in preparing the internship

report & providing me relevant information for the report. I would like to express my foremost

gratitude to other officials of Delta Life Insurance Company Ltd. who helped me and gave me

their valuable time, providing me with the most relevant information on the basis of which I have

prepared this report.

I would like to thank Harun-or-Rashid, AVP, Development, who providing me relevant

information for the report, annual report and deep idea about insurance sector.

I would like to thank Azim sir, Mamun sir, Asma mam, Sraboni mam, joli mam who gave me

specific knowledge about department work.

Executive Summary

The development of a country depends up on the consolidate development of all infrastructures

like-agricultural sector, industrial sector, financial sector, technological sector etc. But

developing all these structures is not easy. The most difficult problem is financial risk. So if it is

feasible to provide financial protection then most of the structural development will be

achievable with minimal efforts. And the most well-known practical method for handling

financial risk is insurance. Delta Life Insurance Company Limited was incorporated in

November 10, 1986 and is mainly engaged in Ordinary Life (OL), Group Insurance (GI), Health

Insurance (HI) business and non-traditional micro insurance business under the name of Gono-

Grameen Bima (GN-GRB). The Company is a publicly traded Company and its shares are listed

on the Dhaka Stock Exchange and Chittagong Stock Exchange. However, I have prepared this

report on Delta Life Insurance Co. Ltd, which is one of the growing and prospective insurance

companies in the insurance industry. The company is providing protection and financial security

to the nation, whilst adding shareholders value thought customer service excellence. By the way

of examining and evaluation the functions and performance of Delta Life Insurance Co. Ltd, I

tried to illustrate a true scenario of insurance industry of Bangladesh. The most important part of

this report is the findings and analysis that means what I have found out throughout my study.

My report topic is Financial Analysis of Delta Life Insurance Company Ltd. So, we get an

accurate realization about Delta Life Insurance Co. Ltd. I also made an effort to present some

Suggestions for the better interest of the company. Basically, the major problems and facilities

are similar for all insurance company as they are dealing with services. The difference can be

made in one way, which is how well they are maintained their Accounts and dealing with their

customer and most probably how efficiently and effectively they are operating their business.

Delta Life Insurance Company business started with the creation of product or service and ended

with the attempt to sell it. Delta 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. Delta Life can take pride in molding the saving habits of the lower

and middle class people and transforming them into prospective policyholders. The potential is

now so strongly perceived that all life insurance companies – old and new alike – operating in

the country have started their own micro insurance products.

Table of Content

1. Introduction........................................................................................................................1

1.1 Origin of the report........................................................................................................2

1.2 Objective of the Study...................................................................................................2

1.3 Scope of the study..........................................................................................................3

1.4 Methodology..................................................................................................................2

1.4.1 Sources of Data.....................................................................................................3

1.4.1.1 Primary Sources........................................................................................3

1.4.1.2 Secondary Sources....................................................................................3

1.5 Data Processing and Analysis........................................................................................3

1.6 Limitations.....................................................................................................................4

2. Company Overview...........................................................................................................5

2.1 Company History...........................................................................................................6

2.1.1 Industry Overview................................................................................................7

2.1.2 Vision....................................................................................................................8

2.1.3 Goal.......................................................................................................................8

2.1.4 Values: TRUEST..................................................................................................8

2.2 Background of the Delta Life Insurance Company.......................................................9

2.3 Ordinary Life Insurance................................................................................................7

2.3.1 Popular Plans of Ordinary Life Insurance............................ ............................10

2.3.2 Policy Conditions...............................................................................................12

2.4 Gono Grameen Bima................................................................. .................................14

2.4.1 Target Group and the Product............................................................................14

2.4.2 Policy Documents..............................................................................................14

2.4.3 Micro Investment (Loan)...................................................................................15

2.5 Group Life Insurance..................................................................................................16

2.5.1 Traditional Scheme............................................................................................13

2.5.1.1 Short Term Contract...............................................................................17

2.5.1.2 Long Term Contract..............................................................................17

2.5 Health Insurance.........................................................................................................20

3. Tasks and Activities.........................................................................................................22

3.1 Tasks and Activities.....................................................................................................23

3.2 Cell-1...........................................................................................................................23

3.2.1 Underwriting (U/W) Department........................................................................23

3.2.2 Commission Department.....................................................................................24

3.2.3 Accounts Department...........................................................................................24

3.2.4 IT Department......................................................................................................25

3.2.5 Policy Department................................................................................................26

3.3 Service Center..............................................................................................................26

3.3.1 Claims department..............................................................................................26

3.3.2 Alteration department.........................................................................................26

4. Financian Statement Analysis ………..…………………………………................…27

4.1 Ratio Analysis……………………………………………………………….…...…27

4.1.1 Liquidity Ratios…………………………….………………………….…..….28

4.1.2 Leverage Ratios………………………………………………………...…......31

4.1.3 Profitability Ratios………………………………….……………………..…. 36

4.1.4 Activity Ratios………………………………………………………….....…..40

4.1.5 Market Ratios…………………………………………………………..……. 41

4.2 Common Size Analysis…………………………………………………………….44

4.2.1 Horizontal Analysis……………………………………………………..…..44

4.2.2 Vertical Analysis………………………………………………………..…..54

4.2.3 Trend Analysis…………………………………………………..………..…58

4.3 Summary…………………………………………………………………………....60

5. Findings and Recommendations...................................................................................61

5.1 Findings………………………………………………………………….……….....62

5.2 Recommendations……………………………………………………………..........60

5.3 Conclusions…………………………………………………………………......…....63

6. Bibliography

Appendix

1

Chapter-1

Introduction

2

1.1 Origin of the Report:

This is an internship report prepared as a requirement for the completion of the BBA Program

from the School of Business, Ahsanullah University of Science and Technology. The primary

goal of internship is to provide a primary corporate exposure to the student and an opportunity to

translate the theoretical conceptions in real life situation. The internship program covers a period

of three months of organizational attachment. For a successful accomplishment of BBA program,

I, Manas Saha of Bachelor of Business Administration was placed in Delta Life Insurance

Company Ltd., Doinik Bangla, for the internship program under the guidance of Mrinal Kanti

Paul, Assistant Professor of Ahsanullah University of Science and Technology. The duration of

my organizational attachment is three months, starting from June 2015. As a requirement for the

completion of the program I am required to submit this report, which would include an overview

of the organization, as well as particular functional department I am attached with and

elaboration of the responsibility, observation I have during the internship period.

1.2 Objective of the Study:

The objective of this study is to provide insight into how the insurance company works, what are

the strengths and weakness of the company. The ratios will be compared of both the company

within the industry to see where the company stands. To give the stock holder a clear view about

the financial feasibility of both the banks so that they can take the appropriate decision. And

most significantly it will provide a good understanding of the business cycle and the yield curve -

both of which have a major impact on the economic performance of the company.

The main objectives of the study are-

To observe the daily activities of Delta Life Insurance Company Ltd.;

To assess the financial performance of Delta Life Insurance Company Ltd. based on ratio

analysis;

To find out the financial trends of Delta Life Insurance Company Ltd.;

To suggest some policy measures to enhance the organizational performance of Delta

Life Insurance Company Ltd.

3

1.3 Scope of the Study:

Since, the chosen topic of this internship report is “Financial Analysis of Delta Life Insurance

Company Ltd”, the scope of this report is to analyze the financial analysis.

1.4 Methodology:

This is a descriptive and analytical report. Ratio analysis are the main components to analyze the

financial performance.

1.4.1 Sources of Data:

1.4.1.1 Primary Sources:

Major sources of primary information were interviews with members of the staff of Delta Life

Insurance Company Ltd.

Observation of total service operation.

1.4.1.2 Secondary Sources:

Internal Sources

Delta Life Insurance Company Ltd. Annual Report

Group Business Principal manual

External Sources

Different books and periodicals related to the insurance sector

IDRA’s Annual Report

Website information

1.5 Data Processing and Analysis:

The informative portion of this report is based on the primary data such as personal observations

and interviews with members of staff of Delta Life Insurance Company Ltd and secondary data

collected from internal sources. The analytical portion of this report is the outcome of numerous

numerical data collected mainly from the external secondary source. Prior to analysis, data

4

collected form financial & ratio analysis of Delta Life Insurance Company Ltd the above

mentioned sources were classified further for making them suitable for analysis. In order to get

appropriate, accurate and quick result the use of MS Excel was advantageous.

1.6 Limitations:

This report might be limited with some constraints. Performance measurement and assessment of

the contribution of a particular department of a company to the economy is a very difficult task

and there is no universally accepted methodology for this. Details of many aspects of the services

of Delta Life Insurance Company Ltd have been skipped in this report due to various constraints,

including time and space. Moreover, one of the main barriers in writing this report was the

confidentiality of data.

5

Chapter-2

Company Overview

6

2.1 Company History:

Delta Life Insurance Company Ltd. established mainly through the initiative of a group of

Bangladeshi professionals then working abroad along with a few enthusiastic local

entrepreneurs, started its operation in December, 1986 after the Government of Bangladesh

allowed the private sector to operate in the insurance sector in 1984 to carry on the business of

insurance in the Private Sector. A brief explanation as to the growth of life insurance business in

Bangladesh is in order here. Bangladesh declared independence from the Pakistani rules on

March 26, 1971 following which she had to witness a bloody liberation struggle with the

occupation forces lasting for 9 months before they were defeated. Insurance business which was

exclusively carried on in private sector before independence was nationalized after liberation in

1972 primarily to address the emerging situation of eroding public confidence in the industry that

was left staggeringly short of resources in the face of huge losses caused by the war of liberation.

After a series of experimentation, a state-owned body, namely Jiban Bima Corporation (JBC),

established in May, 1973 for transacting the life insurance business, took over the assets and

liabilities under life portfolios of all erstwhile private insurance companies and started business

in its own name. However, things did not improve; rather, in many respects became more

exacerbating and the Government then thought it better to allow private sector participation in

insurance business.

Since inception, Delta Life set before itself a high standard of all round performance coextensive

with professional soundness and proficiency. It soon made a mark in the life insurance arena by

not only being the leader among the private sector indigenous companies, but by undertaking and

successfully implementing innovative and welfare oriented life insurance schemes. It introduced

an array of conventional life and group insurance products - many of which were the first in

Bangladesh. For the first time, health insurance products were also introduced by Delta Life. But

more importantly, in fulfillment of the avowed commitment towards social development, Delta

Life for the first time not only in Bangladesh but probably in the World, devised and introduced

micro-life insurance-cum-savings products especially suited to the needs and pockets of poor

people of the country who constitute more than 80% of the people of Bangladesh.

Two projects of the company namely Grameen Bima for the rural people and Gono Bima for the

poor and marginal savers of the urban areas were initiated to devote themselves exclusively to

7

marketing and management of these innovative products. We are happy to report that we have

achieved a good measure of success although there is a long way to go. These schemes that we

have introduced have created great stir and enthusiasm among the general mass who, before

these projects started functioning, could not even dream of owning a policy that provides the

much needed life insurance coverage along with facility of regular savings on a long-term basis.

At a later stage i.e. in the year 2002, the projects were merged into a division of Delta Life,

namely, Gono Grameen Bima Division.

Delta Life can take pride in molding the saving habits of the lower and middle class people and

transforming them into prospective policyholders. The potential is now so strongly perceived

that all life insurance companies - old and new alike - operating in the country have started their

own micro insurance products.

2.1.1 Industry Overview:

A brief explanation as to the growth of life insurance business in Bangladesh is in order here.

Bangladesh declared independence from the Pakistani rules on March 26, 1971 following which

she had to witness a bloody liberation struggle with the occupation forces lasting for 9 months

before they were defeated. Insurance business which was exclusively carried on in private sector

before independence was nationalized after liberation in 1972 primarily to address the emerging

situation of eroding public confidence in the industry that was left staggeringly short of resources

in the face of huge losses caused by the war of liberation. After a series of experimentation, a

state-owned body, namely Jiban Bima Corporation (JBC), established in May, 1973 for

transacting the life insurance business, took over the assets and liabilities under life portfolios of

all erstwhile private insurance companies and started business in its own name.

However, things did not improve; rather, in many respects became more exacerbating and the

Government then thought it better to allow private sector participation in insurance business.

Since inception, Delta Life set before itself a high standard of all round performance coextensive

with professional soundness and proficiency.

8

2.1.2 Vision:

We will be the premier life Insurance Company in Bangladesh.

We will serve our customers with respects and will provide the best solution of their

needs.

We will be a Company with qualified professional who will work together as a team and

serve with dignity and the highest level of integrity. We believe an excellence and

customers with service beyond their expectations.

“Adding value” will be the operative words of our organization.

2.1.3 Goal:

Provide financial security to our customers with insurance policies that are most suitable

for them

Make life insurance an easy saving instrument and a profitable one with attractive bonus

and improved customer service

Collect small savings from the people of our country and invest the accumulated savings

in profitable nation building enterprises.

2.1.4 Values: TRUEST

Teamwork

Respect for all people

Unquestionable integrity

Excellence inverting we do

Speed in servicing

Truthfulness

9

2.2 Background of the Delta Life Insurance Company Limited At a glance:

10 November 1986 Year of establishment of the company

17 February 1986 Signing of First Policy

February 1988 Launching of Grameen Bima

8 October 1993 Launching of Gono Bima

7 February 1994 Inauguration of Delta Care Hospital Plan

13 September 1995 Listed in Dhaka Stock Exchange

6 December 1995 Listed in Chittagong Stock Exchange

March 2001 Membership of Global Network for banking Innovation in

Microfinance

4 January 2003 Merging of Gono and Grameen Bima

30 January 2012 Silver Jubilee of the company

7 July 2013 Incorporation and commencement of Business of DLIC

Securities

2.3 Ordinary Life Insurance:

Delta Life offers a wide variety of ordinary life product/plans ranging from the most common

endowment type to more modern and sophisticated plans like endowment with open term,

pension plan with built in provision for increasing pension, increasing protection with provision

for premium refund etc. The plans have been designed keeping in view the diverse and

multifaceted needs of the insuring public belonging to different strata of the society. Some of the

popular plans are briefly described below.

10

2.3.1 Popular Plans of Ordinary Life Insurance:

I. Endowment plan with and without profits:

The most common and widely popular, this plan provides for a fixed sum at end of a particular

term or at earlier death of the assured. The plan is available under both options i.e. with profit

and without profit. This is a straightforward coverage allowing a person to plan his future needs

for security and projected savings through means of insurance. Ds for security and projected

savings through means of insurance.

II. One-two-three endowment plan with profits:

This plan provides for high security at earlier death of the assured before expiry of term (10 & 20

years) or the sum assured at expiry of the term. The plan provides for double the sum assured at

premature death due to illness or treble the sum assured if death occurs directly as the result of an

accident along with accrued bonuses till death or maturity as the case may be.

III. Installment payment plans with or without profit:

a) Three payments plan Given for terms like 12, 15, 18, 21 years with or without profits this plan

provides for one fourth of the sum assured upon expiry of each one third of the term and on

death at any time 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.

b) Bi-annual payment plan 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:

Table-1: Instalment plan

Policy

Term

Amount of

Installment

When Payable Sum Assured

Payable on Maturity

10 Years 20% Upon expiry of 4th, 6th, 8th years 40%

15 Years 15% Upon expiry of 4th, 6th, 8th, 10th 12th years 25%

11

20 Years 10% Upon expiry of 4th, 6th, 8th, 10th, 12th,

14th, 16th & 18th years

25%

Notwithstanding the payment of any number of installments, the policyholder remains covered

for full risk and on death occurring before maturity, full sum assured is payable.

* The higher numbered table refers to without profit premium rates.

IV. Premium back term Insurance Plan without Profits:

These are comparatively low cost plans. These plans provide for payment of sum assured in case

of premature death within the term or refund of all premiums paid at end of term. Under Table-

59(A), sum assured keeps on increasing at 8% p.a. on each successive policy anniversary and

such increased sum is paid at death during the term. On survival up to the end of term, all

premium paid during the term is paid. Under Table-65(A) a guaranteed profit equal to 10% of

sum assured is paid along with full premium at end of term as survival benefit. On death before

maturity, the sum assured is payable.

V. Pension Plan:

without profits. Under plan pensions are provided at quarterly intervals 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 for remaining term of 10

years. Before pension starts, if the assured policyholder dies, 10 times the annual pension is paid

as a lump-sum to his nominee and the policy is terminated upon such payment. There is another

plan (Table-72D) that while providing for full protection against premature death as described

above, provides for pension from a designated age as elected by the policyholder at an increasing

rate i.e. pension will increase at 10% at intervals of two years. Payment of pension is guaranteed

for at least ten years and thereafter as long as the pensioner lives.

Both these pension plans provide for waiver of premium in case of permanent and total disability

due to accident before commencement of pension.

Source: Secondary Data

12

VI. Child Educational Protection Plan with Profits:

Multiple benefits in the form of scholarships, monthly annuities etc. in addition to sum assured

are available under these plans. Under one plan (Table-11) sum assured or a part thereof is also

payable to the policyholder in case the child dies prematurely.

VII. Tri-dimensional Policy:

Built-in benefits for payment of 50% sum assured immediately if critical illness is diagnosed.

Premium and the sum assured will thereafter be halved and the policy continues. Under this plan,

a spouse may also be covered for major disease benefits.

VIII. Moving Term Plan:

Policies under the plan are initially issued and are to be taken for a minimum term (6 to 10 years)

as elected by policy holder. Any time within this minimum term if death occurs, full sum assured

is payable. At the expiry of the minimum term, the policy may be surrendered for full refund of

premiums paid. However, the policyholder need not terminate his policy at end of the minimum

specified period. The policy will automatically continue till age 65 years of the policyholder

unless he terminates it earlier. The survival benefit comprises of refund of all premiums paid

along with bonuses. In case of premature death the nominee(s) is paid the sum assured plus all

premiums paid till death, or all premiums paid with profit accrued till death whichever is greater.

IX. Single Premium Multiple Security Plan:

It is a single Premium Policy offering multiple security for five years term. It covers natural

death, permanent and partial/total disability and seven major diseases. Premiums are based on

the age of the proposer. This plan perfectly suits the needs of the executive class.

2.3.2 Policy Conditions:

Surrender Value: After payment of two full years' premium, the policy acquires cash surrender

value which is quoted on request unless stated in the policy itself.

13

Loan: At any time after a cash surrender value is available under the policy and while the policy

is in force, the policyholder may obtain, subject to the company's existing rules, a loan on the

policy up to 90% of the cash surrender value.

Age Proof: Age of life assured as declared while applying for the policy has to be authenticated

with an age proof document acceptable to the company. The company reserves the right to

require proof of age of the life assured before paying any claim under the policy if not admitted

earlier.

Settlement Option: Payee may elect to receive the proceeds of the policy in installments instead

of in a single sum, in such a manner as may be agreed upon with the company.

Suicide: Should the life assured commit suicide, whether the assured be then sane or insane,

within two years from the commencement date or from reinstatement of the policy, then the

liability of the company shall be limited to the refund of all premiums paid under the policy less

indebtedness, if any, at the time of such death.

Bonus: Delta Life pays attractive bonuses to its with-profit policies. The present rate of policy

bonuses are as following:

a) A compound reversionary bonus @ 5% of paid up sum assured. This bonus is not paid on the

installments withdrawn (under Table-03, 04) from the date of such withdrawal.

b) A simple reversionary bonus ranging from Tk. 10 to Tk. 15 per thousand sum assured per year

depending on term.

c) A terminal bonus equal to 12% to 15% of sum assured at maturity of policy depending on

terms if the policy would have been in force for at least 4/5th of its term.

Average Rate of Bonus:

On the basis of the three types of bonuses, the Company now pays bonus on Tk. 100,000 Sum

Assured for with-profit endowment products according to the following chart

14

Table-2: Average Rate of Bonus

Term of Policy Total Bonus at Maturity Average Rate per Thousand Sum Assured per year

10 Years Tk. 54,068 Tk. 54.068

15 Years Tk. 84,050 Tk. 56.033

20 Years Tk. 1,18596 Tk. 59.298

The above mentioned rate is not applicable for all products. Please contact your nearest Service

Center for more information on vested bonus for your policy

2.4 Gono Grameen Bima:

Delta Life first launched Micro-insurance product in 1988 through its Grameen Bima Project

(GRB) to cater to the necessity of economic protection against premature death and of disability

as well as providing a way for regular savings for the poor and low income group of people

living in villages. Later it started another project in 1994, namely, Gono Bima (GNB) for the

urban poor and the low income class. These projects are now merged under the name of Gono-

Grameen Bima Project (GN-GRB). The initial problems apart, the project started to yield

impressive results right from the beginning by creating great interest among the target population

who could not even perceive an institutional arrangement through which the ever present

problems of insecurity of life could be addressed. To suit the needs and pockets of the target

people, and for efficient management of these portfolios, some of the age-old traditional

concepts of carrying on life insurance business had to be diluted and in some cases replaced by

simple and straightforward practices. Yet, the results are so encouraging that Delta Life is now

regarded far and wide as the undisputed leader espousing the cause of welfare of teeming

millions and its experiences are now used to advantage not only by indigenous companies but

also other micro-savings organizations abroad.

2.4.1 Target Group and the Product:

In GN-GRB the formalities are minimum. Insurance Cover is given under Group Insurance

concept. A person interested in a policy submits a simple two-page proposal form; it is signed or

thumb imprinted by him or her. There is no need for medical check-up. The person needs to be


15

between 18 and 45 years of age, have a monthly income of Tk. 5,000.00 (US $100.00) or less, be

of good health and supply a Declaration of Good Health (DGH) at the time of submitting the

Proposal form. Death through pregnancy complications within the first year of the policy and

death through suicide in the first year of the policy are not covered under an "exclusion clause".

Simple endowment with profit policies are offered for 10 and 15 years term both with premium

payment mode being weekly or monthly. Premium rate is the same irrespective of age at entry.

Besides this plan, new plans like three-payment plan with 12 and 15 years term and double

protection endowment plan have recently been introduced.

2.4.2 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. There is one group policy document for the policyholders of each

Thana or Block. For individual policyholders the passbook serves as policy document.

2.4.3 Micro Investment (Loan):

GN-GRB gives small project loans to its policyholders on a group liability basis. No collateral is

required. There is 20% service charge on the loans, which is calculated at a flat rate and added to

the principal amount. The loan, together with the service charge, is repayable in 12 equal

monthly instalments. The repayments are collected from door to door by the organizers. Recently

a decision has been taken to establish small collection booths in the villages. A person must be a

policyholder and pay premiums for atleast one year before being eligible for a loan. The

maximum loan given is Tk. 5,000.00 (US $100.00) per policyholder. The loans are for income

generating activities (IGA) only. Policyholders form a committee of 5 to 7 members. 3

policyholders selected by the committee are given the first loan. After recovery of 3 instalments

from each of the first three borrowers, the next 3 are given their loans and so on. As a general

rule, 60% of the premium income of an area and 40% of the repaid loan of an area are available

for loan in that area. Also 100% of premium collection of a committee is available for loan to

that committee.

16

2.5 Group Life Insurance:

Group Insurance is an instrument for providing life insurance coverage (protection) to a number

of individuals under a single contract (policy) who are associated together for a common interest

other than insurance. It is the most cost effective means to provide immediate financial support

to an insured member and/or his family in case of devastating events like-death, disability,

disease as well as retirement. Group Insurance has already established its importance as a

component of "Employee Benefit Package" in Bangladesh. Exclusive features of Group

Insurance are:

Insurance coverage to a number of individuals under a single contract

Simple insurable conditions

Easy administrative procedure

Prompt claim settlement

Affordable premium

Tax exemption on premium

Delta Life offers a host of Group-Life Insurance schemes from which an organization/ employer

may choose for benefits of its members/employees, as may best serve their interest according to

organizational setup.

To be treated as a group, the following criteria need to be fulfilled.

A "Group" Should comprise of at least 15 members

It should be a legitimately organized body

Group clients of Delta Life Insurance Company Limited include:

Semi-Government organization, autonomous bodies

Private, Non-Government Organizations (NGO's)

Educational & Financial Institutions

Public Limited Companies

Associations, Business organizations etc.

Group Life Insurance Schemes offered by Delta Life are of two types:

17

Traditional Schemes: For insurance coverage of members/employees of a Group

Exclusive Schemes: For insurance coverage of clients of Financial Institutions

2.5.1 Traditional Scheme:

These are the commonly offered "Group-Life Insurance" schemes and are also known as Basic

Schemes: These are:

2.5.1.1 Short Term Contract:

Group Term Life Insurance Scheme (GT)

Group Term Life with Premium Refund Scheme (GTR)

2.5.1.2 Long Term Contract

Group Endowment Life Insurance Scheme (GEN)

Group Pension Scheme (GP)

There are several variants of Basic Schemes. Examples of two variants of GTR are

GTR-100/10: Group Term Life with 100% Premium Refund after 10 years

GTR-50/10 : Group Term Life with 50% Premium Refund after 10 years

Salient features of the Basic Schemes:

Group Term Life (GT)

Insurance coverage worldwide round the clock

Contract, Initially for three years and is Renewable

Simple Claim procedure

Prompt claim settlement upon death of an insured

Option to alter sum assured at any time

Exclusion & Inclusion of members under coverage at any time

Premium Rate- comparatively lowest among the basic schemes

Option for supplementary covers to enhance benefit

Profit Sharing options for large groups

18

Group Term Life Insurance with Premium Refund (GTR):


Contract, initially for ten/fifteen years




Reasonable Premium Rate, but higher than GT Scheme

Refund of basic premium (full/partial) on completion of term or retirement

Payment of Surrender Value in case of Policy discontinuation & exclusion

Conversion Privilege to take Individual Life Insurance Policy in lieu


Group Endowment Life Insurance (GEN):


Continuous Contract, unless terminated by either party




Premium rate-age dependent and variable

Payment of sum assured as per contract on retirement

Payment of Surrender Value in case of discontinuation

Conversion Privilege to take Individual Life Insurance Policy in lieu


Group Pension Scheme

Provides for quarterly/yearly pension based on last salary

Continuous Contract, unless terminated by either party

Scope for taking "Death in Service" benefit

Scope of taking "Joint life last survivor pension" benefit

Scope for life pension with/without guaranteed payment period


19

Premium rate- age dependent and variable

Payment of Surrender Value in case of discontinuation


Supplementary Covers:

To provide insurance protection against few devastating conditions other than death, and to

enhance insurance benefit in case of sudden accidental death, several Supplementary Covers are

offered along with basic schemes. Supplementary covers include:

Accidental Death Benefit (ADB): Provides for double sum assured in case of accidental death.

Permanent and Total Disability Benefit (PTD): Provides for full sum assured on happening of

defined risks.

Permanent & Partial Disability Benefit (PPD): Provides for certain percentage of the sum

assured as per schedule on happening of the defined risks.

Dismemberment Benefit (DB): Provides for a certain percentage of Sum Assured as per

schedule on happening of the defined risks. It is only offered with ADB.

Major Disease Benefit (MDB): Provides for 25% or 50% of S.A. upon diagnosis of a few

specific life threatening diseases

Exclusive Schemes:

These are schemes, especially designed for financial institutions, in order to secure their

investment and adorn the product to make it attractive to customers as well as to protect interest

of the client. Few examples are:

Home Loan Insurance: e.g.; Scheme for "Home Loan Borrowers" of Delta Brac Housing

Depositor's Insurance: e.g.; Scheme for "Smart Plant" Depositors of Dhaka Bank Ltd

Premium:

For traditional schemes: Premiums are usually payable annually in advance before

commencement of insurance.

20

For exclusive schemes: A single premium is payable for the whole period of coverage before

commencement of insurance.

**Details about the schemes are provided with "Insurance Proposal"

How to get a Group Life Insurance Proposal?

For Proposal: fill in the Proposal Request Form and send it to us at our contract address

For Quotation: fill in the "Proposal Request Form" and send it to us at our contract address

accompanied by the list of members to be insured with following details

Table-3: Proposal form

S1# Name Designation Date of Birth Sum Assured

*If sum assured depends on salary, mention salary and desired multiple to determine Sum

Assured

Claims are settled to the concerned organization.

2.5 Health Insurance:

Health Insurance is now considered indispensable in developed countries. In the present

financial-social perspective of Bangladesh as well, Health Insurance has now become an

essential, dependable, acceptable and the most cost effective means to make the modern

treatment facilities affordable to all socio-economic classes of people, especially the fixed

income group. As a pioneer of Health Insurance in Bangladesh, Delta Life Insurance Company

offers several Health Insurance Schemes, which are as follows:

Hospitalization (In-patient) treatment coverage plans

Hospitalization Insurance Plan (Group)- offered to Members of a group and their

dependents (if desired)


21

Hospitalization Insurance Plan (Individual) – offered to an Individual as well as his or her

dependent family members also known as "Delta Care Hospitalization Plan".

Out-patient treatment coverage plans:

Out-patient Insurance Plan - Offered as an adjunct to Group Hospitalization

Out-patient Management Plan - Offered as an adjunct to Group Hospitalization

Overseas treatment coverage plan for travelers:

Overseas Medicliam Policy (OMP) – A pre-requisite for visa application offered only to

Individuals traveling abroad.

Hospitalization Insurance Plans:

Covers in-patient (Hospitalization) treatment expenses of an insured member

22

Chapter-3

Tasks and Activities

23

3.1 Tasks and Activities:

I worked in two parts in Delta Life Insurance Company Ltd. These are Cell-1 and Service

Center. The environment of my organization is quite beautiful. The employees of the

organization are so much cooperative. Total working history is described with department wise.

3.2 Cell-1:

Cell-1 worked for first year activity of a policy. There are several departments in cell-1. This are-

Underwriting ( U/W) Department

Commission Department

Accounts Department

IT Department

Policy Department

3.2.1 Underwriting (U/W) Department:

Underwriting is the most important part of life insurance company. If an underwriter makes a

wrong decision, it affects into the company. An underwriter should have experience, sense and

sincerity. One policy stars from this department. I practically have filled much policy summary

form. If policy amount is 1 to 500000, this underwriter makes decision. But If policy amount is

500001-5000000, it will go to the head office and If policy amount is greater than 5000000, it it

will go to the Apollo Munich Insurance company, Mumbai. Total process showed in a table.

Input Proposal

number

Checking the requirements

according to the GI

Fill up the

policy

summary entry

Decision by

the underwriter

Calculate the policy

premium

Go through the A/C

for PR/BM

PR/BM entry in the

policy summary

Go through

the IT

FPR issue FPR check &

seal with sign

Go through the policy

department for Dolil

Fig: Underwriting Activities

Source: Table Desk Work

24

3.2.2 Commission Department:

In this company, there are two parts. One is Management/ Admin and other is Development.

This department works for development people. The policy is-

Fig: Development people rank

From this rank FA, UM and BM get commission from the company. If policy year are-

Year Commission in %

10-11 22%

12-14 25%

15-19 32%

20 & Above 35%

Note: This commission pay according to Insurance Development & Regulatory Authority

Bangladesh (IDRA).

3.2.3 Accounts Department:

Accounts Department worked for daily and monthly collection or expense. It has two part. One

is Daily Collection Statement (DCS) and another is Daily Expense Statement (DES). They also

distributes the salary of the employee. It works in the own website.

FA UM BM CRM JAVP AVP

SVP

VP JSVP JVP

EVP


25

Fig: Daily Collection Statement Activity

Fig: Daily Expense Statement Activity

3.2.4 IT Department:

IT Department is worked in issuing FPR and policy number.

3.2.5 Policy Department:

Policy Department is worked for issuing Dolil with name, age and policy number. The process is

given below-

Fig: Process of Policy Department

Setting FPR file schedule

according to policy no.

Dolil endorse

policy no.

Checking Stamping

Counter

Sign

Dolil

Dispatched

Record File in the

record room

DCS Summary( Full

Month)

Bank Statement

Reconsolution

Credit Voucher Journal

DES Summary

Register

Similarity check in Bank Statement

and Summary Register

Credit Voucher




26

3.3 Service Center:

Service center is worked for renewal activities. If anyone do late to give premium with due time,

employee of service center takes decision for next requirement. It has several department. These

are Claims department, Accounts department, Alteration department. Claims department works

for maturity, surrender and loans.

3.3.1 Claims department:

Claims department is worked for maturity, surrender and loan. When Policy holder claims for

maturity or surrender, claims officer pay their amount with calculating in the medium of issuing

check. Its average payment period is one month.

3.3.2 Alteration department:

Alteration department is worked for any alteration like policy amount changing, renew Dolil etc.

27

Chapter- 4

Financial Statement Analysis

28

4.1 Ratio Analysis:

Quantitative analysis of information contained in a company’s financial statements. Ratio

analysis is based on line items in financial statements like the balance sheet, income statement

and cash flow statement; the ratios of one item – or a combination of items - to another item or

combination are then calculated. Ratio analysis is used to evaluate various aspects of a

company’s operating and financial performance such as its efficiency, liquidity, profitability and

solvency. The trend of these ratios over time is studied to check whether they are improving or

deteriorating. Ratios are also compared across different companies in the same sector to see how

they stack up, and to get an idea of comparative valuations. Ratio analysis is a cornerstone of

fundamental analysis. Ratio points out the operating efficiency of the firm i.e. whether the

management has utilized the firm’s assets correctly, to increase the investor’s wealth. It ensures a

fair return to its owners and secures optimum utilization of firm’s assets.

Ratio analysis helps in inter-firm comparison by providing necessary data. An inter firm

comparison indicates relative position. It provides the relevant data for the comparison of the

performance of different departments. If comparison shows a variance, the possible reasons of

variations may be identified and if results are negative, the action may be initiated immediately

to bring them in line. Yet another dimension of usefulness or ratio analysis, relevant from the

View point of management is that it throws light on the degree efficiency in the various activity

ratios measures this kind of operational efficiency.

a) Liquidity Ratios

b) Leverage Ratios

c) Profitability Ratios

d) Activity Ratios

e) Market Ratios

4.1.1 Liquidity Ratios:

Liquidity ratios measure a firm’s ability to meet its current obligations. These include:

29

Current Ratio:

Current Ratio = Current Assets / Current Liabilities

This ratio indicates the extent to which current liabilities are covered by those assets expected to

be converted to cash in the near future. Current assets normally include cash, marketable

securities, accounts receivables, and inventories. Current liabilities consist of accounts payable,

short-term notes payable, current maturities of long-term debt, accrued taxes, and other accrued

expenses. Current assets are important to businesses because they are the assets that are used to

fund day-to-day operations and pay ongoing expenses.

Table-4: Current Ratio

Year 2014 2013 2012

Current Asset 36622816949 29500117360 26247925470

Current Liability 1819779782 1845941306 1339709679

Current Ratio 20.12

15.98

19.59

Fig: Current Ratio of Delta Life Insurance Company Ltd.

Source: Annual Report of Delta Life Insurance Company Ltd.

0

5

10

15

20

25

2014 2013 2012

Current Ratio

Year

Source: Primary Data

30

The current ratio for the year 2012, 2013 & 2014 is 19.59, 15.98 & 20.12 respectively, compared

to standard ratio 2:1 this ratio is more higher which shows high short term liquidity efficiency at

the same time holding more than sufficient current assets mean efficient use of resources.

Sales to Working Capital:

Sales to Working Capital = Sales / Working Capital

Sales to working capital give an indication of the turnover in working capital per year. A low

working capital indicates an unprofitable use of working capital.

Table-5: Sales to Working Capital

Year 2014 2013 2012

Sales 37690241423 35414665656 31585092463

Working capital 34803037167 27654176054 24908215791

Sales to Working Capital 1.083 1.281 1.268

Fig: Sales to Working Capital of Delta Life Insurance Company Ltd

Source: Annual Report of Delta Life Insurance Company Ltd


0.95

1

1.05

1.1

1.15

1.2

1.25

1.3

2014 2013 2012

Sales to Working Capital

Year

31

This liquidity ratio for the years 2012, 2013 & 2014 is 1.083, 1.281 & 1.268 times respectively,

compared to standard ratio 2:1 this ratio is lower which shows low short term liquidity efficiency

at the same time holding less than sufficient current assets mean inefficient use of resources.

Working Capital:

Working Capital means a measure of both a company's efficiency and its short-term financial

health. The working capital is calculated as:

Working Capital= Current Asset- Current Liabilities

The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has

enough short term assets to cover its short term debt. Anything below 1 indicates negative W/C

(working capital). While anything over 2 means that the company is not investing excess assets.

Most believe that a ratio between 1.2 and 2.0 is sufficient. Also known as "net working capital".

Table-6: Working Capital Ratio

Year 2014 2013 2012

Current Asset 36622816949 29500117360 26247925470

Current Liability 1819779782 1845941306 1339709679

Working Capital 34803037167 27654176054 24908215791

It is very clear from the above calculations that the working capital of the company is gradually

increasing over the years, which shows good short term liquidity efficiency.

4.1.2 Leverage Ratios:

By using a combination of assets, debt, equity, and interest payments, leverage ratios are used to

understand a company's ability to meet it long term financial obligations. Leverage ratios

measure the degree of protection of suppliers of long term funds. The level of leverage depends

on a lot of factors such as availability of collateral, strength of operating cash flow and tax

treatments. Thus, investors should be careful about comparing financial leverage between

companies from different industries. For example companies in the banking industry naturally

operates with a high leverage as collateral their assets are easily collateralized. These include:


32

Debt Ratio:

Debt Ratio = Total Debt / Total Assets

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of

funds provided by the creditors. The proportion of a firm's total assets that are being financed

with borrowed funds. The debt ratio is calculated by dividing total long-term and short-term

liabilities by total assets. The higher the ratio, the more leverage the company is using and the

more risk it is assuming. Assets and liabilities are found on a company's balance sheet.

Table-7: Debt Ratio

Year 2014 2013 2012

Total Debt 36443796378 29897760084 27671287791

Total Assets 37682296378 30888760084 27717287791

Debt Ratio 0.967 0.968 0.998

Fig: Debt Ratio of Delta Life Insurance Company Ltd


0.95

0.955

0.96

0.965

0.97

0.975

0.98

0.985

0.99

0.995

1

1.005

2014 2013 2012

Debt Ratio

Year


33

Calculating the debt ratio, we came to see that this company is highly leveraged one.

Debt to Equity Ratio:

Debt to Equity Ratio = Total debt / Total Equity

The debt to equity ratio is the most popular leverage ratio and it provides detail around the

amount of leverage (liabilities assumed) that a company has in relation to the monies provided

by shareholders. As you can see through the formula below, the lower the number, the less

leverage that a company is using. The debt to equity ratio gives the proportion of a company (or

person's) assets that are financed by debt versus equity. It is a common measure of the long-term

viability of a company's business and, along with current ratio, a measure of its liquidity, or its

ability to cover its expenses. As a result, debt to equity calculations often only includes long-

term debt rather than a company's total liabilities. A high debt to equity ratio implies that the

company has been aggressively financing its activities through debt and therefore must pay

interest on this financing.

Table-8: Debt to Equity Ratio

Year 2014 2013 2012

Total Debt 36443796378 29897760084 27671287791

Total Equity 1238500000 991000000 46000000

Debt to Equity Ratio 29.43 30.17 601.5


34

Fig: Debt to Equity Ratio of Delta Life Insurance Company Ltd


We can see from the above calculations that this ratios continuously decreasing in the last three

years.

Current Worth to Net worth Ratio:

Current Worth to Net worth Ratio= Current Worth / Net worth Ratio

We can calculate current worth and net worth by using following formulas:

Current Worth = Total Current Assets – Total Current Liabilities

Net Worth = Total Assets - Total Liabilities

Table-9: Current Worth to Net worth Ratio

Year 2014 2013 2012

Current Worth 34803037167 27654176054 24908215791

Net worth 1238500000 991000000 46000000

Current Worth to Net worth Ratio 28.1 27.91 541.5

0

100

200

300

400

500

600

700

2014 2013 2012

Debt to Equity Ratio

Year


35

Fig: Current Worth Ratio of Delta Life Insurance Company Ltd


We can see from the above calculations that this ratios continuously decreasing in the last three

years. In 2012 it was 541.5, in 2013 it was 27.91 and in 2014 it was 28.1.

Total Capitalization Ratio:

Total Capitalization Ratio = Long-term debt / long-term debt + shareholders' equity

The capitalization ratio measures the debt component of a company's capital structure, or

capitalization (i.e., the sum of long-term debt liabilities and shareholders' equity) to support a

company's operations and growth. Long-term debt is divided by the sum of long-term debt and

shareholders' equity. This ratio is considered to be one of the more meaningful of the "debt"

ratios - it delivers the key insight into a company's use of leverage.

Table-10: Total Capitalization Ratio

Year 2014 2013 2012

Long-term debt 34624016596 28051818778 26331578112

long-term debt + equity 35862516596 29042818778 26377578112

Total Capitalization Ratio 0.965 0.966 0.998

0

100

200

300

400

500

600

2014 2013 2012

Current Worth Ratio

Year


36

Fig: Total Capitalization Ratio of Delta Life Insurance Company Ltd


It is obvious from the above calculations that there is a strictly stable in this ratio over the years.

4.1.3 Profitability Ratios:

Profitability is the net result of a number of policies and decisions. This section of the discusses

the different measures of corporate profitability and financial performance. These ratios, much

like the operational performance ratios, give users a good understanding of how well the

company utilized its resources in generating profit and shareholder value. The long-term

profitability of a company is vital for both the survivability of the company as well as the benefit

received by shareholders. It is these ratios that can give insight into the all-important "profit".

Profitability ratios show the combined effects of liquidity, asset management and debt on

operating results. These ratios examine the profit made by the firm and compare these figures

with the size of the firm, the assets employed by the firm or its level of sales. There are four

important profitability ratios that I am going to analyze:

0.94

0.95

0.96

0.97

0.98

0.99

1

1.01

2014 2013 2012

Total Capitalization

Ratio

Year

37

Net Profit Margin:

Net Profit margin = Net Profit / Sales x 100

Net Profit Margin gives us the net profit that the business is earning per dollar of sales. This

margin indicates the profit after all the costs have been incurred it shows that what % of turnover

is represented by the net profit. An increase in the ratios indicates that a firm is producing higher

net profit of sales than before.

Table-11: Net Profit Margin

Year 2014 2013 2012

Net Profit 36154795025 33061109736 29366780578

Sales 37690241423 35414665656 31585092463

Net Profit Margin 98.54 95.61 95.43

Fig: Net Profit Margin of Delta Life Insurance Company Ltd


Therefore, the Net Profit Margin was 95.43% in 2012, increase to 0.18% in 2013 and then

decrease to 2.93% in 2014.

0

20

40

60

80

100

120

Net Profit Margin

Net Profit Margin

Year


38

Return on Assets:

Return on Assets (ROA) = Profit after Taxation / Average Total assets x 100

ROA measures of a company's profitability, equal to a fiscal year's earnings divided by its total

assets, expressed as a percentage. This is an important ratio for companies deciding whether or

not to initiate a new project. The basis of this ratio is that if a company is going to start a project

they expect to earn a return on it, ROA is the return they would receive.

Simply put, if ROA is above the rate that the company borrows at then the project should be

accepted, if not then it is rejected.

Table-12: Return on Assets

Year 2014 2013 2012

Net income 1000425789 835761671 810780116

Total Average Assets 37682296378 30888760084 27717287791

ROA 0.959 1.07 1.06

Fig: Return on Assets of Delta Life Insurance Company Ltd


Return on assets increased in 2013 and it was maximum in year 2013.

0.9

0.92

0.94

0.96

0.98

1

1.02

1.04

1.06

1.08

1 2 3

Return on Assets

Year


39

Return on Equity (ROE):

Return on Total Equity = Profit after taxation x 10

Return on Equity measures the amount of Net Income earned by utilizing each dollar of Total

common equity. It is the most important of the “Bottom line” ratio. By this, we can find out how

much the shareholders are going to get for their shares. This ratio indicates how profitable a

company is by comparing its net income to its average shareholders' equity. The return on equity

ratio (ROE) measures how much the shareholders earned for their investment in the company.

The higher the ratio percentage, the more efficient management is in utilizing its equity base and

the better return is to investors.

Table- 13: Return on Equity

Year 2014 2013 2012

Net income 36154795025 33061109736 29366780578

Total Equity 1238500000 991000000 46000000

ROE 29.19 33.36 638.4

Fig: Return on Equity of Delta Life Insurance Company Ltd


0

100

200

300

400

500

600

700

1 2 3

Return on Equity

Year


40

The Return on Equity was maximum in 2012 but decreased in 2013 and went down more in

2014. This again may have happened due to the issue of more long-term debt in 20013 and 2014.

4.1.4 Activity Ratios

Activity ratio are sometimes are called efficiency ratios. Activity ratios are concerned with how

efficiency the assets of the firm are managed. These ratios express relationship between level of

sales and the investment in various assets inventories, receivables, fixed assets etc.

Total Asset Turnover:

Total Asset Turnover = Total Sales / Total Assets

The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales

in dollars by assets in dollars. Asset turnover measures a firm's efficiency at using its assets in

generating sales or revenue - the higher the number the better. It also indicates pricing strategy:

companies with low profit margins tend to have high asset turnover, while those with high profit

margins have low asset turnover.

Table- 14: Total Asset Turnover

Year 2014 2013 2012

Total Sales 37690241423 35414665656 31585092463

Total Assets 37682296378 30888760084 27717287791

Total Asset Turnover 1 1.147 1.14


41

Fig: Total Asset Turnover of Delta Life Insurance Company Ltd


The Return on Equity was maximum in 2012 but decreased in 2013 and went down more in

2014. This again may have happened due to the issue of more long-term debt in 2013 and 2014.

4.1.5 Market Ratios

Market Value Ratios relate an observable market value, the stock price, to book values obtained

from the firm's financial statements.

Earnings Per Share- EPS:

Earnings Per Share = Profit after Taxation/Number of Shares

The portion of a company's profit allocated to each outstanding share of common stock. Earnings

per share serve as an indicator of a company's profitability. Earnings per share are generally

considered to be the single most important variable in determining a share's price. It is also a

major component used to calculate the price-to-earnings valuation ratio.

0.9

0.95

1

1.05

1.1

1.15

1.2

2014 2013 2012

Total Asset Turnover

Year

42

Table- 15: Earnings Per Share

Year 2014 2013 2012

Profit after Taxation 1000425789 835761671 810780116

Number of Shares 123750000 123750000 4500000

Earnings Per Share 8.084 6.754 180.2

Fig: Earning Per Share-EPS of Delta Life Insurance Company Ltd


Price / Earnings Ratio:

Price / Earnings Ratio = Stock Price Per Share/Earning Per Shares

The Price-Earnings Ratio is calculated by dividing the current market price per share of the stock

by earnings per share (EPS). (Earnings per share are calculated by dividing net income by the

number of shares outstanding.) The P/E Ratio indicates how much investors are willing to pay

per dollar of current earnings. As such, high P/E Ratios are associated with growth stocks.

(Investors who are willing to pay a high price for a dollar of current earnings obviously expect

high earnings in the future.) In this manner, the P/E Ratio also indicates how expensive a

0

20

40

60

80

100

120

140

160

180

200

2014 2013 2012

Earning Per Share-EPS

Year


43

particular stock is. This ratio is not meaningful, however, if the firm has very little or negative

earnings. The Price-Earnings Ratio is calculated by dividing the current market price per share of

the stock by earnings per share (EPS). (Earnings per share are calculated by dividing net income

by the number of shares outstanding.) The P/E Ratio indicates how much investors are willing to

pay per dollar of current earnings. As such, high P/E Ratios are associated with growth stocks.

(Investors who are willing to pay a high price for a dollar of current earnings obviously expect

high earnings in the future.) In this manner, the P/E Ratio also indicates how expensive a

particular stock is. This ratio is not meaningful, however, if the firm has very little or negative

earnings.

Table- 16: Price-Earnings Ratio

Year 2014 2013 2012

Stock Price Per 10 10 10

EPS 8.084 6.754 180.2

Price-Earnings Ratio 1.237 1.481 0.056

Fig: Price/Earning Ratio of Delta Life Insurance Company Ltd


0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1 2 3

Price/Earning Ratio

Year


44

The P/E ratio was 0.056 times in 2012 and increased further to as high as 1.481 times in the

following year. However, in 2014 it declined to 1.237 times which is an alarming signal for the

potential investors.

3.2 Common Size Analysis:

The term "trend analysis" refers to the concept of collecting information and attempting to spot a

pattern, or trend, in the information. In some fields of study, the term "trend analysis" has more

formally-defined meanings. Although trend analysis is often used to predict future events, it

could be used to estimate uncertain events in the past. Financial statement information is used by

both external and internal users, including investors, creditors, managers, and executives. These

users must analyze the information in order to make business decisions, so understanding

financial statements is of great importance. Several methods of performing financial statement

analysis exist. I will discuss two of these methods: horizontal analysis and vertical analysis.

4.2.1 Horizontal Analysis:

Horizontal analysis is the comparison of historical financial information over a series of

reporting periods, or of the ratios derived from this financial information. The intent is to see if

any numbers are unusually high or low in comparison to the information for bracketing periods,

which may then trigger a detailed investigation of the reason for the difference. The analysis is

most commonly a simple grouping of information that is sorted by period, but the numbers in

each succeeding period can also be expressed as a percentage of the amount in the baseline year,

with the baseline amount being listed as 100%.It is a procedure in fundamental analysis in which

an analyst compares ratios or line items in a company's financial statements over a certain period

of time. The analyst will use his or her discretion when choosing a particular timeline; however,

the decision is often based on the investing time horizon under consideration.

45

Table-17: Horizontal Analysis of Balance Sheet

Horizontal Analysis

Delta Life Insurance Company Ltd

Balance Sheet

As the Dcember 31 2014,2013,2012

Horizontal Analysis

2014 2013 2012

Assets 2014 2013 2012

Loan

On insurers

polices within

their surrender

value

667275484 591515642 509955906 130.85 115.9 100

Investment

Statutory

deposit with

Bangladesh

Bank

15000000 15000000 2000000 750 750 100

Bangladesh

Govt. Treasury

Bond

1087658820 8747225969 8385482195 129.71 104.3 100

Shares listed on

stock exchanges

9916201374 6301694232 5131994379 193.22 122.7 100

Debentures and

bonds

307095470 456571210 476518717 64.446 95.81 100

Mutual Fund 10000000 10000000 30000000 33.333 33.33 100

Central

Depository

Bangladesh Ltd.

3138890 3138890 3138890 100 100 100

46

DLIC Securities

Limited

399999910 399999910 320200000 124.92 124.9 100

Investment

Property

1008507427 450816503

Other loans 84714026 85698840 91154267 92.935 94.01 100

Agents' balance 43738 34597 3461053 1.2637 0.999 100

Outstanding

Premium

537446216 548650428 646608173 83.118 84.85 100

Collection in

hand

86716514 96931160

Interest,

dividends and

rents accruing

but not due

884714219 856571106 806813031 109.66 106.1 100

Advances and

deposits

1237817198 949435460 785420077 157.6 120.8 100

Sundry deptors 71121188 70896104 55089341 129.1 128.6 100

Cash and bank

balances

On fixed

deposits with

banks

9170495604 8811861312 7652567484 119.84 115.1 100

On current

account with

banks

287494840 307345828 384335639 74.803 79.96 100

On SND

account with

banks

1041156498 764003551 947127835 109.93 80.66 100

47

Cash in hand 1826214 1695431 1353853 134.89 125.2 100

Cash in transit 14016757 29652458 11823448 118.55 250.7 100

Branch petty

cash

1447102 1378729 2881182 50.226 47.85 100

Other accounts

Fixed assets( t

cost less

accumulated

depreciation)

1050850491 1378756931 1456667484 72.141 94.65 100

Stamps,

printing and

stationary in

hand

8628938 9885793 12694837 67.972 77.87 100

Total Assets 3768229638 30888760084 2771728779

1

135.95 111.4

4

100

Share Capital and

Liabilities

Shareholders' Capital

Authorized

500000000

ordinary shares

of Tk. 10 each

5000000000 5000000000 5000000000 100 100 100

Issued, subscribed and paid-up

123750000

ordinary shares

of Tk. 10 each

fully paid up

1237500000 990000000 45000000 2750 2200 100

48

Dividend

equalization

reserve

1000000 1000000 1000000 100 100 100

Life Insurance

fund

3052920342 28051818778 2633157811

2

115.94 106.5 100

Fair Value

change Account

4094813104

Estimated

liabilities in

respect of

outstanding

claims, whether

due or intimated

475416245 704635592 665191938 71.471 105.9 100

Amount due to

other persons or

bodies carrying

on insurance

business

36909668 41237585 67197302 54.927 61.36 100

Sundry

creditors

1077316584 835582888 329371461 327.08 253.6 100

Provision for

doubtful debts

82827488 83399711 73363920 112.9 113.6 100

Reserve for

unexpected risk

135638742 170747611 192184968 70.577 88.84 100

Premium

deposits

11671055 10337919 12400090 94.121 83.37 100

Total share

capital and

3768229637

8

30888760084 2771728779

1

135.95 111.4 100

49

liabilities

Source: Annual Report

Table-18: Horizontal Analysis of Profit and Loss Account

Horizontal Analysis


Profit and Loss Account

As the December 31 2014,2013,2012

2014 2013 2012 Horizontal Analysis

2014 2013 2012

Balance of fund

beginning of the

year

28051818778 26331578112 23282041204 120.49 113.1 100

Adjustment mde

during the year

208255502 236693681 107622750 193.51 219.9 100

First Year

premium( OL)

576686965 461967190 371198513 155.36 124.5 100

First Year

premium(

GN_GRB)

423738824 373794481 439481594 96.418 85.05 100

Renewal premium(

OL)

2154083201 2125491329 2100825850 102.54 101.2 100

Renewal premium(

GN_GRB)

1935272063 1908281303 1761099104 109.89 108.4 100

Group life

insurance premium

240456743 329276557 253611545 94.813 129.8 100

Health insurance

premium

114033431 148082400 160575350 71.016 92.22 100

50

Gross Premium 5444271227 5346893260 5086791956 107.03 105.1 100

Reinsurance

premium

-39138673 -49951329 -57365054 68.227 87.08 100

Net Premium 5405132554 5296941931 5029426902 107.47 105.3 100

Interest, dividend

& rents

3002764079 2677563111 2327639110 129 115 100

Other Income 21844721 36127150 27682381 78.912 130.5 100

Total 36689815634 34578903985 30774412347 119.22 112.4 100

First year

premium, where

the maximum

premium paying

period is

Single 62235461 54319012 39127779 159.06 138.8 100

Four years 6254 69838 24626 25.396 283.6 100

Five years 264227 794041 1907326 13.853 41.63 100

Six years 100213 176139 133871 74.858 131.6 100

Seven years 154283 143329 268491 57.463 53.38 100

Eight years 136649 199481 182533 74.863 109.3 100

Nine years 198228 45545 60963 325.16 74.71 100

Ten years 321526647 280280673 326121651 98.591 85.94 100

Eleven years 9869943 11145062 10290786 95.91 108.3 100

Twelve years or

over( including

throughout life)

605933884 488588551 432562090 140.08 113 100

1000425789 835761671 810680116 123.41 103.1 100

Claims under

policies( including

51

provision for

claims), less

reinsurance

By death 168386861 290426378 198712875 84.739 146.2 100

By maturity 1724905487 1602465862 1584915505 108.83 101.1 100

By survival 585943828 545195395 507657519 115.42 107.4 100

by hospitalization 78981797 142919044 69301485 113.97 206.2 100

By others 465259 5231218 3555305 13.086 147.1 100

By surrenders 174665186 95619378 82607186 211.44 115.8 100

Annuities 708405 677023 617740 114.68 109.6 100

Bonus in Cash 1196620019 766385540 376596797 317.75 203.5 100

Profit commission 15910755 27818187 18902430 84.173 147.2 100

3946587597 3476738025 2842866842 138.82 122.3 100

Expenses of management

Commission

(a) Commission to

Insurance

agents(less that on

reinsurance)

540124285 443193569 506653082 106.61 87.47 100

(b) Allowances and

commission

250390424 310388247 123821179 202.22 250.7 100

Salaries etc. 445029866 435148180 413390239 107.65 105.3 100

Traveling and

conveyance

9153021 8620584 10798099 84.765 79.83 100

Director's fees 730250 1097500 1048000 69.68 104.7 100

Auditors' fees 491250 460000 1000000 49.125 46 100

Medical fees 1923163 1346224 2150635 89.423 62.6 100

Legal and 1945516 5227702 6507451 29.897 80.33 100

52

professional fees

Insurance policy

stamp

11186405 8945935 9395437 119.06 95.22 100

Advertisement and

publicity

7974158 10603252 9406597 84.772 112.7 100

Printing and

stationery

14916173 14852166 16624741 89.723 89.34 100

Office rent 70900276 90454290 84390181 84.015 107.2 100

Bank charges 38557347 42371015 43383914 88.875 97.67 100

Repairs and

maintenance

10202270 9110628 5610590 181.84 162.4 100

Car fuel,

maintenance &

repairs

30041349 27382636 27383272 109.71 100 100

Group insurance 5264082 5138256 5336752 98.638 96.28 100

Papers and

periodicals

499063 470874 515950 96.727 91.26 100

Telephone, telex &

electricity etc.

13685563 14882322 15080772 90.748 98.68 100

Training &

recruitment

expenses

1423934 1281641 1734769 82.082 73.88 100

fees &

subscriptions

5657974 8727711 7050083 80.254 123.8 100

Donations 30000 1370819 4598268 0.6524 29.81 100

Entertainment 352668 451574 2714139 12.994 16.64 100

Staff welfare 1658511 2123640 26383926 6.2861 8.049 100

Insurance

premium (general)

3574975 2442359 2190938 163.17 111.5 100

53

Postage & telegram 3174395 3196197 3362088 94.417 95.07 100

Uniform & liveries 894134 811302 841774 106.22 96.38 100

Development

expenses

15942508 15799660 13199916 120.78 119.7 100

prize & awards 16168465 4407423 1137964 1420.8 387.3 100

Conference 7569610 6845749 8180779 92.529 83.68 100

Company

registration (

renewal) fees

18714127 17903772 18474420 101.3 96.91 100

Stamps 3174099 4341258 2147778 147.79 202.1 100

Staff transport

expenses

1449589 2550724 2004020 72.334 127.3 100

AGM/EGM

expenses

1816331 3693365 3352467 54.179 110.2 100

Silver jubilee 3933682 26242547 0 14.99 100

CDBL related

charges

830617 8219993 1519002 54.682 541.1 100

1535446398 1517794249 1407631769 109.08 107.8 100

Other expenses

Depreciations 30839405 32240086

Provision for

doubtful debts

12209336 50656 0 24102 100

Reserve for

unexpired risk

135638742 170747611 192184968 70.577 88.85 100

Provision for

income tax

155700000 372355900

Appropriations

Dividend 356400000 945000000

Balance of the fund 30529203492 28051818778 26331578112 115.94 106.5 100

54

at the end of the

year

Total 36689815634 34578903985 30774312347 119.22 112.4 100


4.2.2 Vertical Analysis:

It is a method of financial statement analysis in which each entry for each of the three major

categories of accounts (assets, liabilities and equities) in a balance sheet is represented as a

proportion of the total account. The main advantages of analyzing a balance sheet in this manner

are that the balance sheets of businesses of all sizes can easily be compared. It also makes it easy

to see relative annual changes in one business. When using vertical analysis, the analyst

calculates each item on a single financial statement as a percentage of a total. The term vertical

analysis applies because each year's figures are listed vertically on a financial statement. The

total used by the analyst on the income statement is net sales revenue, while on the balance sheet

it is total assets. This approach to financial statement analysis, also known as component

percentages, produces common-size financial statements. Common-size balance sheets and

income statements can be more easily compared, whether across the years for a single company

or across different companies.

Table-19: Vertical Analysis of Balance Sheet

Vertical Analysis


Balance Sheet

As the December 31 2014,2013,2012

2014 2013 2012 Vertical Analysis

Assets 2014 2013 2012

Loan

On insurers polices

within their

surrender value

667275484 591515642 509955906 1.770

8

1.915 1.8398

5

55

Investment

Statutory deposit

with Bangladesh

Bank

15000000 15000000 2000000 0.039

8

0.048

6

0.0072

2

Bangladesh Govt.

Treasury Bond

1087658828

0

8747225969 8385482195 28.86

4

28.31

8

30.253

6

Shares listed on

stock exchanges

9916201374 6301694232 5131994379 26.31

5

20.40

1

18.515

5

Debentures and

bonds

307095470 456571210 476518717 0.815 1.478

1

1.7192

1

Mutual Fund 10000000 10000000 30000000 0.026

5

0.032

4

0.1082

4

Central Depository

Bangladesh Ltd.

3138890 3138890 3138890 0.008

3

0.010

2

0.0113

2

DLIC Securities

Limited

399999910 399999910 320200000 1.061

5

1.295 1.1552

4

Investment

Property

1008507427 450816503 2.676

3

1.459

5

Other loans 84714026 85698840 91154267 0.224

8

0.277

4

0.3288

7

Agents' balance 43738 34597 3461053 0.000

1

0.000

1

0.0124

9

Outstanding

Premium

537446216 548650428 646608173 1.426

3

1.776

2

2.3328

7

Collection in hand 86716514 96931160 0.230

1

0.313

8

Interest, dividends

and rents accruing

but not due

884714219 856571106 806813031 2.347

8

2.773

1

2.9108

7

56

Advances and

deposits

1237817198 949435460 785420077 3.284

9

3.073

7

2.8336

8

Sundry debtors 71121188 70896104 55089341 0.188

7

0.229

5

0.1987

5

Cash and bank balances

On fixed deposits

with banks

9170495604 8811861312 7652567484 24.33

6

28.52

8

27.609

4

On current account

with banks

287494840 307345828 384335639 0.762

9

0.995 1.3866

3

On SND account

with banks

1041156498 764003551 947127835 2.763 2.473

4

3.4171

Cash in hand 1826214 1695431 1353853 0.004

8

0.005

5

0.0048

8

Cash in transit 14016757 29652458 11823448 0.037

2

0.096 0.0426

6

Branch petty cash 1447102 1378729 2881182 0.003

8

0.004

5

0.0103

9

Other accounts

Fixed assets ( t cost

less accumulated

depreciation)

1050850491 1378756931 1456667484 2.788

7

4.463

6

5.2554

5

Stamps, printing

and stationary in

hand

8628938 9885793 12694837 0.022

9

0.032 0.0458

Total Assets 3768229637

8

3088876008

4

2771728779

1

100 100 100

Share Capital and Liabilities


57

Authorized

500000000 ordinary

shares of Tk. 10

each

5000000000 5000000000 5000000000 13.26

9

16.18

7

18.039

3


123750000 ordinary

shares of Tk. 10

each fully paid up

1237500000 990000000 45000000 3.284 3.205 0.1623

5

Dividend

equalization

reserve

1000000 1000000 1000000 0.002

7

0.003

2

0.0036

1

Life Insurance fund 3052920349

2

2805181877

8

2633157811

2

81.01

7

90.81

6

95.000

6

Fair Value change

Account

4094813104 10.86

7

Estimated liabilities

in respect of

outstanding claims,

whether due or

intimated

475416245 704635592 665191938 1.261

6

2.281

2

2.3999

2

Amount due to

other persons or

bodies carrying on

insurance business

36909668 41237585 67197302 0.097

9

0.133

5

0.2424

4

Sundry creditors 1077316584 835582888 329371461 2.858

9

2.705

1

1.1883

3

Provision for

doubtful debts

82827488 83399711 73363920 0.219

8

0.27 0.2646

9

58

Reserve for

unexpected risk

135638742 170747611 192184968 0.36 0.552

8

0.6933

8

Premium deposits 11671055 10337919 12400090 0.031 0.033

5

0.0447

4

Total share capital

and liabilities

3768229637

8

3088876008

4

2771728779

1

100 100 100


Comparisons:

Financial trend analysis is an applied, practical approach for monitoring the financial condition

of any company through the use of financial indicators. I shall use technique to compare previous

three-year period data and observes how they change. This would permit an assessment of the

current financial condition.

4.2.3 Trend Analysis

A firm's present ratio is compared with its past and expected future ratios to determine whether

the company's financial condition is improving or deteriorating over time. Trend analysis studies

the financial history of a firm for comparison. By looking at the trend of a particular ratio, one

sees whether the ratio is falling, rising, or remaining relatively constant. This helps to detect

problems or observe good management.

59

Table-20: Trend Analysis

Trend Analysis

Delta Life Insurance Company Ltd.

Performance Area 2014 2013 2012 Trend

a) Liquidity Ratios

Current Ratio 20.12486198 15.98107007 19.59224889 Increase in 2014

Working Capital 34803037167 27654176054 24908215791 Increase in 2014

Sales to Working

Capital

1.082958399 1.280626318 1.268059211 High in 2013

b) Leverage Ratios

Debt Ratio 0.967133107 0.967917132 0.998340386 Leverage remain

same

Debt to Equity Ratio 29.42575404 30.16928364 601.5497346 Drops in leverage in

2014

Current Worth/Net

worth Ratio

28.10095855 27.90532397 541.482952 Higher in 2012

Total Capitalization

Ratio

0.965465335 0.965877968 0.998256095 Leverage remain

same

c) Profitability Ratios

Net Profit Margin 2.7267125 95.61063517 95.42596702 Lower profitability

in 2014

Return on Assets 0.959463687 1.07032816 1.059511335 Remain same

Return on Equity 29.19240616 33.36136199 638.4082734 Higher in 2012

d) Activity Ratios

Total Asset Turnover 1.000210843 1.146522734 1.139544847 Higher efficiency

2013

60

e) Market Ratios:

Earnings Per Share-

EPS

8.0842488 6.753629665 180.1733591 Higher in 2012

Price/Earnings Ratio 1.23697331 1.480685275 0.055502101 Higher in 2013


Summary:

Financial Statement Analysis is a method used by interested parties such as investors, creditors,

and management to evaluate the past, current, and projected conditions and performance of the

firm. This report mainly deals with the insight information of Delta Life Insurance Company Ltd.

In the current picture where financial volatility is endemic and financial intuition is becoming

popular, when it comes to investing, the sound analysis of financial statements is one of the most

important elements in the fundamental analysis process. At the same time, the massive amount of

numbers in a company's financial statements can be bewildering and intimidating to many

investors. However, through financial ratio analysis, tried to work with these numbers in an

organized fashion and presented them in a summarizing form easily understandable to both the

management and interested investors. It is required by law that all private and public limited

companies must prepare the financial statements like, income statement, balance sheet and cash

flow statement of the particular accounting period. The management and financial analyst of the

company analyze the financial statements for making any further financial and administrative

decisions for the betterment of the company. Therefore, I select this topic, so that I have done

some financial analysis that will certainly help the management of review their performance and

also assist the interested people like investors and creditors. That as a financial analyst how can I

make any important financial decision by analyzing the financial statements of the company.

Because, it is the primary responsibility of the financial managers or financial analyst to manage

the financial matters of the company by evaluating the financial statements. I am also providing

some important suggestions and opinions about the financial matters of the business.

61

Chapter-5

Findings and Recommendations

62

5.1 Findings:

While working at Delta Life Insurance Company Ltd., Cell-1 and service center, I have attained

to the newer kind of experience. After the collecting and analyzing of data I have got some

findings. These findings are completely from my personal point of view. Those are given below.

Company is in very good position because of it’s asset strength and life fund.

There is most strength point is no loan from any institution.

As an insurance company, I have talked personally that they seem to believable

institution. There is no fraud.

Life fund is as stable as IDRA’s rule.

It has skilled employee to serve the policy holder.

5.2 Recommendations:

Though the market is so much competitive, but the performance of the team of Delta Life

Insurance Company Ltd. is really satisfactory. Their offerings, services, post purchase behavior

with their valuable clients, regular notifications sent to the customers, organized way of making

policies, available agencies or branches, available customer care services through the whole

world etc. are helping them to capture the maximum amount of customers in this field. Some

recommendations for the organization are-

When I worked as an intern, I see many customer don’t know when premium period. When they

come into the company, they feel hesitate like in the claims department. Man power should

increase in the claims department.

Every employee are unhappy about their salary, it should increase.

Company should increase customer awareness about insurance sector.

Computerized system and latest communication devices are the most important elements

for the coming year for Delta Life Insurance Company Ltd.

63

5.3 Conclusion:

Delta Life insurance Company is one of the leading insurance Company in Bangladesh. The

performance of Delta life Insurance company is getting better day by day. Its premium, assets,

claims meeting, utilization of income is getting better in last three years. The study is about the

financial of Delta Life Insurance Company Ltd., its cash payments, claims meeting, premium

collection, service offered, products etc. The study also has showed that the factors are related

with the investors, customers and cost furthermore, the study has identified that the DLICL

customer (both Clients and beneficiaries) are influenced by most of the same factors. Here Delta

life insurance Company limited could improve its marketing strategy for customer satisfaction.

Overall we can see that Delta Life Insurance Company Ltd. is one of the progressive Insurance

Company in Bangladesh for its servicing and its better performance.

i

Bibiography

1. http://www.investopedia.com/terms/l/liquidityratios.asp

2. http://www.investopedia.com/terms/w/workingcapital.asp

3. http://www.deltalife.org/pdf/Annual_Report_2014.pdf

4. http://www.accountingtools.com/horizontal-analysis

5. http://www.idra.org.bd/

6. http://www.investopedia.com/terms/r/ratioanalysis.asp

7. http://www.aaii.com/journal/article/16-financial-ratios-for-analyzing-a-companys-strengths-

and-weaknesses.touch

8. http://study.com/academy/lesson/liquidity-ratio-definition-calculation-analysis.html

9. Annual Report 2014

10. Annual Report 2012

http://www.investopedia.com/terms/l/liquidityratios.asp

http://www.investopedia.com/terms/w/workingcapital.asp

http://www.deltalife.org/pdf/Annual_Report_2014.pdf

http://www.accountingtools.com/horizontal-analysis

http://www.idra.org.bd/

http://www.investopedia.com/terms/r/ratioanalysis.asp

http://www.aaii.com/journal/article/16-financial-ratios-for-analyzing-a-companys-strengths-and-weaknesses.touch

http://www.aaii.com/journal/article/16-financial-ratios-for-analyzing-a-companys-strengths-and-weaknesses.touch

http://study.com/academy/lesson/liquidity-ratio-definition-calculation-analysis.html

ii

Appendix


Balance Sheet

As the Dcember 31 2014,2013,2012

2014 2013 2012

Assets

Loan

On insurers polices within their

surrender value

667275484 591515642 509955906

Investment

Statutory deposit with Bangladesh

Bank

15000000 15000000 2000000

Bangladesh Govt. Treasury Bond 10876588280 8747225969 8385482195

Shares listed on stock exchanges 9916201374 6301694232 5131994379

Debentures and bonds 307095470 456571210 476518717

Mutual Fund 10000000 10000000 30000000

Central Depository Bangladesh Ltd. 3138890 3138890 3138890

DLIC Securities Limited 399999910 399999910 320200000

Investment Property 1008507427 450816503

Other loans 84714026 85698840 91154267

Agents' balance 43738 34597 3461053

Outstanding Premium 537446216 548650428 646608173

Collection in hand 86716514 96931160

Interest, dividends and rents

accruing but not due

884714219 856571106 806813031

Advances and deposits 1237817198 949435460 785420077

Sundry deptors 71121188 70896104 55089341

Cash and bank balances

On fixed deposits with banks 9170495604 8811861312 7652567484

On current account with banks 287494840 307345828 384335639

On SND account with banks 1041156498 764003551 947127835

Cash in hand 1826214 1695431 1353853

Cash in transit 14016757 29652458 11823448

Branch petty cash 1447102 1378729 2881182

iii

Other accounts

Fixed assets( t cost less accumulated

depreciation)

1050850491 1378756931 1456667484

Stamps, printing and stationary in

hand

8628938 9885793 12694837

Total Assets 37682296378 30888760084 27717287791

Share Capital and Liabilities


Authorized

500000000 orninary shares of Tk. 10

each

5000000000 5000000000 5000000000


123750000 ordinary shares of Tk. 10

each fully paid up

1237500000 990000000 45000000

Dividend equalization reserve 1000000 1000000 1000000

Life Insurnce fund 30529203492 28051818778 26331578112

Fair Vlue change Account 4094813104

Estimated liabilities in respect of

outstanding claims, whether due or

intimated

475416245 704635592 665191938

Ammount due to other persons or

bodies carrying on insurance

business

36909668 41237585 67197302

Sundry creditors 1077316584 835582888 329371461

Provission for doubtful debts 82827488 83399711 73363920

Reserve for unexpected risk 135638742 170747611 192184968

Premium deposits 11671055 10337919 12400090

Total share capital and liabilities 37682296378 30888760084 27717287791

iv


Profit and Loss Account

As the Dcember 31 2014,2013,2012

2014 2013 2012

Balance of fund begining of the

year

28051818778 26331578112 23282041204

Adjustment mde during the year 208255502 236693681 107622750

First Year premium( OL) 576686965 461967190 371198513

First Year premium( GN_GRB) 423738824 373794481 439481594

Renewal premium( OL) 2154083201 2125491329 2100825850

Renewal premium( GN_GRB) 1935272063 1908281303 1761099104

Group life insurance premium 240456743 329276557 253611545

Health insurance premium 114033431 148082400 160575350

Gross Premium 5444271227 5346893260 5086791956

Reinsurance premium -39138673 -49951329 -57365054

Net Premium 5405132554 5296941931 5029426902

Interest, dividend & rents 3002764079 2677563111 2327639110

Other Income 21844721 36127150 27682381

Total 36689815634 34578903985 30774412347

First year premium, where the

maximum premium paying

period is

Single 62235461 54319012 39127779

Four years 6254 69838 24626

Five years 264227 794041 1907326

Six years 100213 176139 133871

Seven years 154283 143329 268491

Eight years 136649 199481 182533

Nine years 198228 45545 60963

Ten years 321526647 280280673 326121651

Eleven years 9869943 11145062 10290786

Twelve years or over( including

throughout life)

605933884 488588551 432562090

v

1000425789 835761671 810680116

Claims under policies( including

provision for claims), less

reinsurnce

By death 168386861 290426378 198712875

By maturity 1724905487 1602465862 1584915505

By survival 585943828 545195395 507657519

by hospitalization 78981797 142919044 69301485

By others 465259 5231218 3555305

By surrenders 174665186 95619378 82607186

Annuities 708405 677023 617740

Bonus in Cash 1196620019 766385540 376596797

Profit commission 15910755 27818187 18902430

3946587597 3476738025 2842866842

Expenses of management

Commission

(a) Commission to insurnce agents(less that on reinsurnce)

540124285 443193569 506653082

(b) Allowances and comission 250390424 310388247 123821179

Salaries etc. 445029866 435148180 413390239

Traveling and conveynce 9153021 8620584 10798099

Director's fees 730250 1097500 1048000

Auditors' fees 491250 460000 1000000

Medical fees 1923163 1346224 2150635

Legal and proffesional fees 1945516 5227702 6507451

Insurance policy stamp 11186405 8945935 9395437

Advertisement and publicity 7974158 10603252 9406597

Printing and stationery 14916173 14852166 16624741

Office rent 70900276 90454290 84390181

Bank charges 38557347 42371015 43383914

Repairs and mintenance 10202270 9110628 5610590

Car fuelll, maintenance & repairs 30041349 27382636 27383272

Group insurance 5264082 5138256 5336752

Papers and periodicals 499063 470874 515950

vi

Telephone, telex & electricity etc. 13685563 14882322 15080772

Training & recruitment expenses 1423934 1281641 1734769

fees & subscriptions 5657974 8727711 7050083

Donations 30000 1370819 4598268

Entertainment 352668 451574 2714139

Staff welfare 1658511 2123640 26383926

Insurance premium (general) 3574975 2442359 2190938

Postage & telegram 3174395 3196197 3362088

Uniform & liveries 894134 811302 841774

Development expenses 15942508 15799660 13199916

prize & awards 16168465 4407423 1137964

Conference 7569610 6845749 8180779

Company registration ( renewal) fees 18714127 17903772 18474420

Stamps 3174099 4341258 2147778

Staff transport expenses 1449589 2550724 2004020

AGM/EGM expenses 1816331 3693365 3352467

Silver jubilee 3933682 26242547

CDBL related charges 830617 8219993 1519002

1535446398 1517794249 1407631769

Other expenses

Depreciations 30839405 32240086

Provision for doubtful debts 12209336 50656

Reserve for unexpired risk 135638742 170747611 192184968

Provision for income tax 155700000 372355900

Appropriations

Dividend 356400000 945000000

Balance of the fund at the end of the year

30529203492 28051818778 26331578112

Total 36689815634 34578903985 30774312347

Internship Report on Financial Analysis of Delta Life Insurance Company Ltd.

Business

Transcript of Internship Report on Financial Analysis of Delta Life Insurance Company Ltd.