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Assignment On

Principles of Insurance

Topic: about Prime Life Insurance Limited

Prepared for
Nusrat Nargis(NN)
Department of Business & Economics
Daffodil International University
Dhanmondi, Dhaka

Date of Submission
27 April 2008

Daffodil International University

102 Sukrabad,Dhanmondi Dhaka 1207

Prepared by

Md: Main Uddin Khan Polash

ID: 043-11-428

Md. Anowarul Islam

Id: 071-11-1517

Md. Ifte Khairul Islam

ID 052-11-929
MD.Anamul Kabir Rayadh

13 August 2008

Nusrat Nargis
Faculty of Business & Economics
Daffodil International University,
120, Sukhrabad, Dhanmondi,
Mirpur Road, Dhaka 1207

Subject: Submission of the report on Prime Islami Life Insurance Limited.

Dear Madam:
Here the report that I prepared on Prime Islami Life Insurance Limited. Which
will be mainly, based on the survey of the Prime Islami Life Insurance Ltd as
per your assignment.

In preparing the report, I have made sincere efforts to present the relevant
information pertinent to this report and have analyzed them accordingly.

In this connection may I urge up on the benign honor of yours to go through the
report and let us know about any change and adjustment on the report if required?

Sincerely yours

1. …………………

2. …………………

3. …………………

4. …………………

• Definition of Insurance 5

• History of insurance 6
• Origin of insurance 8
• Development Insurance in Bangladesh 10
• Objective 11
• Company name 12
• About Prime Islami Life Insurance Ltd 13
• Corporate status and legal form 13
• Nature of Business 13
• Over view of an Organization 14
• Mission, Vision, Goal 15
• Features 16
• Policies offered 17
• Investment, Risk consideration for changing premium 22
• Claims, Settlement of Claims 23
• Financial Highlights 24
• Business Growth Rate 25
• Improvement of Financial Health 26
• Investment Portfolio 27
• Life Revenue Account 28
• Life Insurance fund 31
• Outstanding Premium, Risk factors & management 32
perception about the risks
• Conclusion 33

Insurance is defined as a cp-operative device spread that loss caused by a particular
risk over a number of persons who are exposed to it and who agree to insure
themselves against that risk. Risk is uncertainty of a financial loss. It should not be
confused with the chance of loss, which is the probable number of losses out of a
given number of exposures. It should not be confused with peril, which is defined
as the cause of loss or with hazard, which is a condition that may increase the
chance of loss. Finally, risk must not be confused with losses itself which is the
unintentional decline in, or disappearance of value arising from a contingency.
Wherever there is uncertainty with respect to a probable loss there is risk. The
famous writers’ definitions about insurance are below:

“Insurance is a promise by an insurer to an insured of protection/or service.”
Mowbray and Blanchard.

“Insurance may be define as a system of combining many loss exposures, with the
cost of the losses being shared by all of the participants”-F.G. Granc.

“Insurance is a social device whereby the uncertain risk an individuals may be

combined in a group and thus made more certain, small periodic contributions by
the individuals providing a fund out of which those who suffer losses may
reimbursed”-Riegel and miller.

History of insurance
In some sense we can say that insurance appears simultaneously with the
appearance of human society. We know of two types of economies in human
societies: money economies (with markets, money, financial instruments and so
on) and non-money or natural economies (without money, markets, financial
instruments and so on). The second type is a more ancient form than the first. In
such an economy and community, we can see insurance in the form of people
helping each other. For example, if a house burns down, the members of the
community help build a new one. Should the same thing happen to one's neighbor,
the other neighbors must help. Otherwise, neighbors will not receive help in the
future. This type of insurance has survived to the present day in some countries
where modern money economy with its financial instruments is not widespread
(for example countries in the territory of the former Soviet Union).

Turning to insurance in the modern sense (i.e., insurance in a modern money
economy, in which insurance is part of the financial sphere), early methods of
transferring or distributing risk were practiced by Chinese and Babylonian traders
as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants
traveling treacherous river rapids would redistribute their wares across many
vessels to limit the loss due to any single vessel's capsizing. The Babylonians
developed a system which was recorded in the famous Code of Hammurabi, c.
1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant
received a loan to fund his shipment, he would pay the lender an additional sum in
exchange for the lender's guarantee to cancel the loan should the shipment be

Achaemenian monarchs were the first to insure their people and made it official by
registering the insuring process in governmental notary offices. The insurance
tradition was performed each year in Norouz (beginning of the Iranian New Year);
the heads of different ethnic groups as well as others willing to take part, presented
gifts to the monarch. The most important gift was presented during a special
ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold
coin) the issue was registered in a special office. This was advantageous to those
who presented such special gifts. For others, the presents were fairly assessed by
the confidants of the court. Then the assessment was registered in special offices.

The purpose of registering was that whenever the person who presented the gift
registered by the court was in trouble, the monarch and the court would help him.
Jahez, a historian and writer, writes in one of his books on ancient Iran:

The owner of the present is in trouble or wants to construct a building, set up a

feast, have his children married, etc. the one in charge of this in the court would
check the registration. If the registered amount exceeded 10,000 Derrik, he or she
would receive an amount of twice as much."

A thousand years later, the inhabitants of Rhodes invented the concept of the
'general average'. Merchants whose goods were being shipped together would pay
a proportionally divided premium which would be used to reimburse any merchant
whose goods were jettisoned during storm or sink age.

The Greeks and Romans introduced the origins of health and life insurance c. 600
AD when they organized guilds called "benevolent societies" which cared for the
families and paid funeral expenses of members upon death. Guilds in the middle
Ages served a similar purpose. The Talmud deals with several aspects of insuring
goods. Before insurance was established in the late 17th century, "friendly
societies" existed in England, in which people donated amounts of money to a
general sum that could be used for emergencies.

Separate insurance contracts (i.e., insurance policies not bundled with loans or
other kinds of contracts) were invented in Genoa in the 14th century, as were
insurance pools backed by pledges of landed estates. These new insurance
contracts allowed insurance to be separated from investment, a separation of roles
that first proved useful in marine insurance. Insurance became far more
sophisticated in post-Renaissance Europe, and specialized varieties developed.

Toward the end of the seventeenth century, London's growing importance as a

centre for trade increased demand for marine insurance. In the late 1680s, Mr.
Edward Lloyd opened a coffee house that became a popular haunt of ship owners,
merchants, and ships’ captains, and thereby a reliable source of the latest shipping
news. It became the meeting place for parties wishing to insure cargoes and ships,
and those willing to underwrite such ventures. Today, Lloyd's of London remains
the leading market (note that it is not an insurance company) for marine and other
specialist types of insurance, but it works rather differently than the more familiar
kinds of insurance.

Insurance as we know it today can be traced to the Great Fire of London, which in
1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon

opened an office to insure buildings. In 1680, he established England's first fire

insurance company, "The Fire Office," to insure brick and frame homes The first
insurance company in the United States underwrote fire insurance and was formed
in Charles Town (modern-day Charleston), South Carolina, in 1732.

Benjamin Franklin helped to popularize and make standard the practice of

insurance, particularly against fire in the form of perpetual insurance. In 1752, he
founded the Philadelphia Contribution ship for the Insurance of Houses from Loss
by Fire. Franklin's company was the first to make contributions toward fire
prevention. Not only did his company warn against certain fire hazards, it refused
to insure certain buildings where the risk of fire was too great, such as all wooden
In the United States, regulation of the insurance industry is highly Balkanized, with primary
responsibility assumed by individual state insurance departments. Whereas insurance markets
have become centralized nationally and internationally, state insurance commissioners opera0te
individually, though at times in concert through a national insurance commissioners'
organization. In recent years, some have called for a dual state and federal regulatory system
for insurance similar to that which oversees state banks and national banks.


The concept of such a philosophy of grouping to gather or risk sharing developed

in every ancient time. We are probably go back to 4th century, which witnessed the
practice of BOTTOMRY BONDS and RESPONDENTIA BONDS in maritime
trade. If at a time distress in mid ocean, the master of the vessel used to be need of
fund/money for completion of journey, but could not manage the same at an
intermediary port either on his account or on the account of the owner of the
vessel; master was empowered to raise such fund by pledging the vessel. Such a
system was known as Bottomry Bonds, as the loan was used to be given by signing
bond. The term of the agreement was that the loan was required to repay only if the
ship reached destination safe and sound. In case total loss of the ship, nothing was
required to be repaid. It was quite obvious, therefore, that the creditors used to
charge a premium, in addition to interest, to protect themselves against the
possibility of total losses when they lose the principal amount. Similar loans could

also be raised on pledge of cargo and this was used to be done on Respondentia
Bonds. The terms

of repayment were exactly the same. The practice has been abandoned since 19th
century because of tremendous advancement in communication system.

Another practice, which is still in existence, is known as GENERAL AVERAGE,

which has in itself the element of sharing the loss of one by all. It is a very old
custom and can be traced back to916 B.C. during the time of Rhodians. In
maritime adventure it is probable that the ship a long with cargo and other interest
is in great distress ocean and it may be required of the master of the vessel to take a
bold decision on the spot aiming at the safety of the venture. Such as action may
involve incurring of expenditure or sacrifice. For example, throwing overboard of
the cargo to lighten the vessel.

Up to 18th century we also experience, amongst the merchant community, a system
to sharing risks with each other. They used to form a group where in one of the
merchant, in particular voyage, used to accept the risk against a premium from
others whilst the others used to trade. On the different occasion another from the
group used accept the risk whilst the rest used to trade, and so on. So at one time
had to take the responsibility of risk bearing and collection was such, which could
reasonably take, caring of probable loss. As the group was indeed small and the
professional expertise on risk management was rather varying limited, the rate of
premium used to be necessary high. Here also it is necessary for the student to
appreciate that, even through, this is not the present day system of insurance as an
isolated specialized entity, but nevertheless, that concept of insurance, that is to
say, a system of sharing or spreading risk gradually developed because of need,
which was ultimately replaced by modern insurance approach.


Insurance is not a new idea or proposition to the people of Bangladesh. About half
a century back, during the British rule in the then India, some insurance companies
started transacting insurance business, particularly life, in this part of the world.
Since 1947 until 1971 insurance business gained momentum in this part of what
then known as East Pakistan. There were about 49 companies transacting both life
and general insurance business.

With the emergence of the People’s Republic of Bangladesh, the government, in

order to make available the future of liberation to the general mass, nationalized
the insurance industry 1972 by Presidential Order No.95, more specifically in
known as the Bangladesh Insurance (Nationalization) Order, 1972. By virtue of
this order, save and except postal life insurance and foreign life insurance
companies, all companies and organization transacting all types of insurance
business in this country came under this nationalization. Five insurance
corporations ware basically established, viz,

1. Jatiya Bima Corporation,

2. Teesta Bima Corporation,
3. Karnaphuli Bima Corporation,
4. Rupsa Bima Corporations,
5. Surma Bima Corporations,

The Jatiya Bima Corporation was not an underwriting corporation, instead, it was a
central corporation to supervise and control the activities of remaining four
subsidiary corporations responsible for underwriting. As per this order Teesta and
Karnaphuli were made responsible for general insurance business and Rupsa and
Surma were made responsible for life insurance business. All the existing 49
companies were merged with these 4 corporations. Whilst life companies or the
life portion of a composite company joined the Rupsa and Surma, the general
companies of general portion of composite company joined the Teesta and


As the requirement of this course, the students are mandated to prepare a report
upon which the faculty evaluates and provides the grade. Our honorable faculty
provides us a guideline for preparing this term paper. The students followed this
online in a very strict manner. The introductory part of the report includes the vary
primary concepts of life insurance policy its meaning and backgrounds. It also
features the life insurance policy in the Bangladesh prospective.

The scenario of insurance policy in Bangladesh has focused from different point of
view. After a general look, I concentrated on general features of life insurance, its
needs, its recent developments and its activities and related other issues. Finally,
background, the different policies it offers and some special offers it has under its
product banner.

Prime Islami Life Insurance Limited

About Prime Islami Life Insurance Ltd

Prime Islami Life Insurance Ltd. was incorporated as prime life insurance
company ltd. In july 2000 with combined efforts of renowned business
Personalities, Bankers and Retired Secretary, Govt. of Bangladesh. With a view to
running the company as per ideology and principle of shariah, it was converted
into Prime Islami Life Insurance Limited In April 2002. In a relatively very short

span of time, Prime Islami Life Insurance Limited (PILIL) has achieved an
excellent progress in business and product developments.


Prime Islami Life Insurance Ltd, is a public Limited Company incorporated under
Companies Act, 1994 on 24 July 2000 with an authorized Share capital of Tk
100,00,000 divided into 1,000,000 Ordinary Shares of Tk 100/= each of which
300,000 ordinary share of Tk 100/= each were issued and fully paid-up by the
Sponsors /Directors of the company. The Company went for public issue in
November 2006 and its shares are listed in both Dhaka and Chittagong Stock
Exchanges in the Year 2007. The company is engaged in Islami Life Insurance

The registered office of the Company is situated at Raj Bhaban (6th floor) 29
Dilkusha, C/A Dhaka-1000.


The Company is mainly engaged in individual, group life including Micro (Mukta
Bima) and P.I.D.P.S (Prime Islami Deposit Pension Scheme).In Case of individual
& group Life insurance (Akok Bima) the risk commences from the issue date of
F.P.R (First Premium Receipt) and in case of Micro Insurance scheme (Mukto
Bima) & PIDPS the risk covers from the date of issue of pass Book. In addition, it
also operates Group Insurance.

Over view of an Organization

Head Office: Prime Islami Life Insurance Ltd.
Head Office
Raj Bhaban (6th Floor)
29, Dilkusha C/A, Dhaka- 1000. Phone:
Address : 9560889,9562512, 01711-920787
Fax +880-2-9566923
E-mail: plicl@bdonline.com,www.primeinsu.com

Company Registration Date

Registration date of the : 2000
Company (ONLY LIFE


Company Registration Date

Registration date of the : 2002

Raj Bhaban (6th floor )

Registered Office : 29, Dilkusha C/A, Dhaka-1000
Phone: 9560889, 9554538

Number of Branch : 82 (Eighty Two)

Number of Director : 12 (Twelve)

M.M Rahaman & co.

Auditor : Chartered Accountants
54 Dilkusha C/A, Dhaka -1000

M. Azizul Haque
Former Inspector General of Police.
Management & Financial : Ex Advisor of Caretaker Government of People’s
Consultant Republic of Bangladesh

Law Adviser : Rokonuddin Mahammud


• To abide by shariah Principles in say-to-day business affairs.
• To build dynamic, sound and professional management team.
• To develop innovative products to add value to our customers
• To ensure quality management system.
• To ensure best customer services
• To ensure good governance

• To maintain utmost integrity responsibility and transparency

• To become the best the private life insurance company in Bangladesh and in
South-East Asia as whole.
• To change beliefs, attitudes, values and practices in the Islamic life
insurance industry.

To sere the humanity for its well-being in the present and the world hereafter by
providing financial and moral gains through utmost good faith, good conduct,
mutual trust, sincerity, integrity, and personalized services.

The following underlying assumption, measurement base, rules, regulations and
accounting pronouncement have been considered in and presenting the financial

• Going concern
• Accrual unless stated otherwise
• Historical cost convention
• The Insurance Act 1938
• The companies Act 1994
• The Securities and Exchange (SE) Rule, 1987
• The Income Tax ordinance, 1984

• The Listing Regulation of Dhaka and Chittagong Stock Exchange and

• The Bangladesh Accounting Standards (BAS)

1,2,7,8,10,14,16,18,24,25,26,28,30 & 37 which have been adopted the
Insurance of Chartered Accountants of Bangladesh (ICAB).

Policies Offered

01. Islamic Endowment Assurance Plan (Hajj Bima)
Age at Entry : 18 to 50 Years
Term : 10, 15 & 20
Mode of : Yearly, Half Yearly & Quarterly
Maturity Age : 70 Years
Supplementary : DIAB - Double Indemnity Accidental Benefit
PDAB - Permanent Disability Accidental Benefit
Benefits : Under this plan the sum assured is payable on death if
occurring earlier or on survival of life assured till end of

02. Assurance Cum Pension and Medical Benefit Plan

Age at Entry : 18 to 50 Years
Term : 5-42
Mode of : Yearly, Half Yearly & Quarterly
Maturity Age : 60 Years
Supplementary : na
Benefits : On death of Assured pensioner occurring before date of
maturity, 10 (ten) times of yearly pension is payable, or on
survival of assured pensioner benefit will be paid in quarterly
installments for ten years and thereafter as long as he lives.

05. Three PaymentEndowment
Five Payment EndowmentAssurance
AssurancePlan Plan
Age at Entry : 18 to 50 Years
Term : 12,
10, 15, 18,
20, 2125,&&2430
Mode of : Yearly, Half Yearly & Quarterly
Maturity Age : 70
50 Years
Supplementary : DIAB, PDAB, HI
Benefits : 25%
assured willschedule
benefit be paid is
completion of one-third
10%term. Another
of Sum 25%isofpayable
Assured sum assured
of 15 will be paid on
of term
15% of SumofAssured
two-third of term and
is payable of 25atof
end of term
20% of Sum 50% of basic
Assured sum withofprofits
is payable will be paid. Even
35 of term
25% ofpayment of 2nd installment
Sum Assured is payable ofthe45full
of sum
term assured is
The rest ifofdeath
30% occurs
of sum before
with profit is payable at the

end of term.
04. Prime Islami Deposit Pension Even after payment of 4th installment the full
Age at Entry sum assured
: 18 to 50 Years with profits is payable if the death occurs before
Term : maturity.
10 & 15
Mode of : Yearly, Half Yearly & Quarterly
Maturity Age : 50 Years
Supplementary : na
Benefits : Under this plan the sum assured is payable on normal death
and double of the sum assured is payable on accidental death
or after expiry of the term sum assured with profits (if any) is

06. Group Term Life Assurance Plan

Age at Entry : 20 to 65 Years
Term : 01 year
Mode of : Yearly
Maturity Age : 60 Years
Supplementary : DIAB, PDAB, HI & PPD
Benefits : The Group Term Life Insurance Scheme covers the risk of
death of an employee while is service on death during the
contract period the sum assured is payable. Initially the
contract is for a period of three years where the premiums are
payable annually in advance an thereafter the contract may be
renewed for further period(s).

07. Group Endowment Assurance Plan

Age at Entry : 20 to 59 Years
Term : 01 - 42
Mode of : Yearly
Maturity Age : 60 Years
Supplementary : DIAB, PDAB, HI
Benefits : The Scheme provides for payment of full sum assured at the
death of an employee while in service or in case of survival of
retirement age at 60 years the employee will be entitled to
100%, 50% or 25% of the sum assured according to contract.

08. Multiple Benefits Life Assurance Plan
Age at Entry : 20 to 55 Years
Term : 10, 20, 30 & 40
Mode of : Yearly, Half Yearly & Quarterly
Maturity Age : 65 Years
Supplementary : na
Benefits : Premium is payable half of the term of the policy.
Fulfill the half term of the policy the sum assured is payable
and also the sum assured is payable at the end of the specified
term. At the event on death at any time of term two multiple
of sum assured (for normal death) & three multiple of sum
assured (for accidental death) is payable.

10. Premium Back Term Assurance Plan

Age at Entry : 20 to 55 Years
Term : 10, 15 & 20
09. Mode
ChildofProtection Assurance
: Yearly, Half PlanYearly & Quarterly
Age at Entry : 20 to 55 Years
Term Age : : 6510Years
- 30
Supplementary : na
Mode of Payment : Yearly, Half Yearly & Quarterly
Maturity Age : : Under this plan the sum assured is payable on death of the
65 Years
assured before date of maturity or on survival annual
Supplementary : na
premium multiplied by the policy term will be refunded.
Benefits : In the event of death of the payor in continue the policy,
12. Couple/Dampati Assurance Plan
11. Age
Single payment Endowmentpremiums are not payable
Assurance Plan for remaining period(s).
at Entry : 18 to 50 (Female) & 21 - 50 (Male) Years
Age at Entry Also 1% (one percent) of sum assured is payable (as
Term : : 10,
1812,to 14,
50 16,
18, 20, 22 & 24
: : Yearly,
10 & 15 to the Child and at the end of the term total
Half Yearly, Quarterly & Monthly
Mode of Payment : sum
Payment assured with profits is payable. In the event of
One Time
Age : : 60death
60Years of the Child assured within the term, the payor
Supplementary shall get full sum assured as per schedule below:
Supplementary : : naNIL
Benefits 25% this
: : Under of sum
plan assured
sumdoubleon completion
assured of survival
policy term nottill
Benefits Under this plan ofisthe
payable on
sum assured of wife
is payable on
end of than or
term, 6 months.
on death if occurring earlier and also sum
survival of the assured till end of term, or on death if
50% of
assured is sum assured
payable on completion
on death ofoccurring
of husband, if policy term more
occurring earlier.
term6 of
policy.but not more than 12 months.
75% of sum assured on completion of policy term more
18 than 1 (one) year but not more than 2 (two) years.
100% of (full) sum assured on completion of policy
term above 2 years.
Investments are stated in the account at their cost of acquisition is accounted for on
accrual basis. Dividend income and entitlement to entitlement to Bonus share are
recognized when right to receive such dividend and bonus share is established.

Risk consideration for changing premium

Interest rate risks

Volatility of money market, which ultimately imposes upward pressure on interest
rate structure, may erode organization profitability.

Exchange rate risks

Devaluation of local currency against major international currencies affects
business performance of import based companies or companies borrowing in
foreign currency affects adversely.
Industry risks
The Company is operating in a highly competitive industry. Entrance of competitor
in the business arena may hamper business
growth of the company
Market and technology-related risks
To be competitive in the market Insurance companies always need to develop new
products and services as well as to introduce new
insurance policies. Failing of which may make the Company out performed by its
Potential or existing government regulations
As an insurance company, Prime Islami life Insurance Limited is directly regulated
by the Chief Controller of Insurance. Any
unfavorable change in regulations may affect the Company's business.
Potential changes in global or national policies
Unfavorable change in global and national policies will affect company’s business

Operations risks
Liberalization of permission to set up more insurance companies by government
may result in severe competition amongst insurers thus reducing premium and

Clams are policy benefit payable according to the terms of policy contract. Claims
by survivals are recorded when these become due for payment. Death claims are
accounted for when intimated.

Provision for outstanding death claims less any reinsurance thereof is made for
those policies where the intimation of death has been received up to 31st December,

Settlement of Claims
You will agree with me that reputation, image and upliftment of the Company
largely depend on early settlement of claims. Our Company is very much sincere
and prompt to settle the Claims Company is very much sincere and prompt to settle
the claims. During 2006, 101 death claims were settled and 3103 survival benefits
were paid amounting to TK 36.00 lac and Tk 2.57 crore respectively, being 5.20%
of total premium procured during the year.

Financial Highlights
Business Performance
SL.NO Particulars 2006 2005 2004 2003 2002
01 Gross 56.37 34.30 18.29 13.02 5.95
First Year 32.22 21.09 11.41 9.87 5.56
Renewal 24.05 13.16 6.79 3.12 0.38
Group 0.10 0.05 0.09 0.03 0.01
02 Assts *192.37 27.11 13.69 7.41 5.21
03 Life Fund 43.86 21.23 9.27 2.83 0.09
04 Investment 33.34 15.58 6.65 1.90 1.90
05 Investment 3.25 0.95 0.35 0.20 0.24
Income 3.25
06 Claims 2.93 1.51 0.28 0.11 0.002
07 Claims to 5.20 4.40 1.53 0.84 0.03
Premium (%)

08 Management 32.50 21.01 11.38 9.96 5.75

a. Commission 23.10 14.96 7.29 6.69 3.50

b. Admin 9.40 6.05 4.09 3.27 2.25

09 Management 57.65 61.25 62.21 76.50 96.64
Exp. To
income (%)

Business Growth Rate

2006 2005 2004 2003 2002

Premium 64.34 87.53 40.48 118.82 193.10
(in %)
Assets *609.63 98.03 84.75 42.22 33.24
(in %)
Life 106.59 129.02 227.56 30044.44 36.37
Fund (in
Premium Life Fund

20 21.23
10 9.27
0 0.09
2002 2003 2004 2005 2006

Premium Life Fund

20 18.29
0.28 1.51 2.93
0 0.002 0.11
2002 2003 2004 2005 2006





100 192.37


5.21 7.41 13.69 27.11

2002 2003 2004 2005 2006

Improvement of Financial Health

The company has been able to make a significant growth during its 06(six) years of
life and a comparative financial statement of last two years is given below:

(Taka in crore)

Description 2005 2006 Growth Rate

Life Fund Tk 21023 Tk 43.86 106.59%
Investment Tk 15.59 Tk 33.34 113.86%
Total Assets Tk 27.11 Tk 1925.38 609.63%
Investment Tk 0.95 Tk 3.25 242.00%

(Taka in crore)
Investment Portfolio
Description 2005 2006
Islami Bond Tk 4.60 Tk 7.15
Mudarabah Term Tk 10.81 Tk 25.67
Shares Tk 0.18 Tk 0.52
The above statement speaks that the company has been getting a sound financial
footing gradually.

Life Revenue Account

For the year ended December 31, 2006

Amount in Taka

Notes 2006 2005




First Year Premium 210,917,439


Renewal Premium 322,174,72 21,917,439

240,475,96 131,621,880
Group Insurance Premium 240,475,96 131,621,880
Gross Premium 495,744
Reinsurance Premium 343,035,063
Net Premium (129,351)
20 (1,322,778)
21 562,328,78
OTHER INCOME 9,549,966

32,465,431 161,253

Total 806,537,30 444,662,695

First year Premium , where the maximum
Premium Paying period is

Two years

Three years

Four years

Five years

Six years

Seven years

Eight years

Nine years

Ten years 254,229,043 160,737,919

Eleven years 28,821 29,989
Twelve years or (including though out life ) 67,916,861 50,149,531

322,174,72 210,917,439

Life Revenue Account Continued


By Death 3,644,887 2,099,434

By Survival 25,181,547 12,738,773

By Others (Disability Claim) 14,554 60,000

By Surrenders 421,000 119,927

29,261,988 15,018,134

Profit Commission 5,244 47,653

Life Insurance fund

This consists of the accumulated balance of life insurance Fund up to December
31, 2006.The break-up as under

Balance as on January 212,269,127 92,662,097

Add: increase in Life Revenue Account during the year 226,374,280 119,607,030

Balance as on December 31 438,643,407 212,269,127



Death claim 350,000 240,654

Claim on Survival 602,931 54,249



1. Asean Re – Takaful International (L) Ltd 1,118,437 240,215

2. Jiban Bima Corporation 593,117 593,117

1,711,554 833,332


6, 626, 13 10,111,723

1st Year Premium 4,450,791 3,860,536

Renewal Premium 2,175,342 6,251,187

Total 6,626,133 10,111,723

Outstanding Premium
The above balance represents outstanding amount of premium due on 31st
December 2006 but subsequently collected.
Risk factors & management perception about the risks

Interest rate risks

Volatility of money market, which ultimately imposes upward pressure on interest
rate structure, may erode organization profitability.

Exchange rate risk

Devaluation of local currency major international currencies affects business
performance of import based companies or companies borrowing in foreign

Industry risks
The company is operating in a highly competitive industry. Entrance of competitor
in the business arena may hamper business growth of the company.

Market perception:
To be company in the market Insurance companies always need to develop new
product and services as to introduce new insurance policies. Failing of which may
make the company by its competitors.

Potential or existing government regulation:

As an insurance company, prime Islami life Insurance Limited is directly regulated
by the chief controller of Insurance. Any unfavorable change in regulations may
affect the company’s business.

Potential changes in global or national policies

Unfavorable change in global and national policies will affect company’s business