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Sandhani Life Insurance Company Ltd.

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. A lot of troubles and threats always hinder
and make difficulties to success. 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. Sandhani Life Insurance Company Limited was incorporated in
March 28, 1990 The Company is a publicly traded Company and its shares are listed on the
Dhaka Stock Exchange and Chittagong Stock Exchange. However, we have prepared this
report on Sandhani 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
Sandhani Life Insurance Co. Ltd, we 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 we have found out throughout our study.

Our report topic is Overall Activities Sandhani Life Insurance Co. Ltd. So, to get an accurate
realization about Sandhani Life Insurance Co. Ltd. we 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.

Sandhani Life Insurance Company business started with the creation of product or service
and ended with the attempt to sell it. Sandhani 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. Sandhani Life can take pride in
mounding 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.

Introduction:

Origin:

As we are the student of business administration we have been authorized by our guide
teacher to prepare a report on the activities of the general idea of lending’s of Sandhani Life
Insurance Company given to the customers; analyze the methods of determining their risk
assessment of lending’s. Along with, the way of offering the products of the company will be
examined.

Purpose:
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The purpose of this report is the writing purpose as well as to know about the activities of the
companies, their activities, rates, performances.

Objectives:

Broad Objectives: A broad objective is to find out the overall activities of Sandhani Life
Insurance Company ltd. Also about their services and rates which is different in different
situation.

Specific Objectives:

1. To find out the general activities of Sandhani Life Insurance Company

2. To find out their services.
3. To find out the different products.
4. To find out the different types rates.
5. To find out the different types condition

Scopes:

To find out the overall activities & accounts department of Sandhani Life Insurance
Company ltd.

Limitations:

In this short time, we have tried to give our maximum effort to provide the information about
the total activities of Sandhani Life Insurance Company ltd. To prepare this report we face
some limitations, like Privacy of the company

Methods and Sources:

Primary Sources: Primary sources will be collected from interview and questionnaires

Secondary sources: Secondary sources for data collection are given below:

1. Web site.

2. Leaflet.

3. Newspaper.

4. Annual report.

Contact Method:

Contact methods were personal interview

Company overview & its Activities:

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Sandhani Life Insurance Company Limited was incorporated in March 28, 1990 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. Sandhani Life’s Present Workforce:

Head office and ordinary life              = 1200

Gono-Grameen Bima                           = 2121

Development                                        = 21679

Total                                                     = 25000

Sandhani Life Insurance Co. 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, 1990 after the Government of Bangladesh
allowed the private sector to operate in the insurance sector in 1988 to carry on the business
of insurance in the Private Sector. 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
Sandhani Life. But more importantly, in fulfillment of the avowed commitment towards
social development, Sandhani 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 marketing and management of these innovative products.

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.
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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, Sandhani Life set before itself a high standard of all round performance
coextensive with professional soundness and proficiency.

Vision:

1. We will be the premier life Insurance Company in Bangladesh

2. “Adding value” will be the operative words of organization
3. We will serve our customers with respects and will provide the best solution of their
needs
4. 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

Goal:

1. Provide financial security to our customers with insurance policies that are most
suitable for them
2. Make life insurance an easy saving instrument and a profitable one with attractive
bonus and improved customer service
3. Collect small savings from the people of our country and invest the accumulated
savings in profitable nation building enterprises.

The product of Sandhani Insurance Co. Ltd. Ordinary Life Insurance:

Sandhani 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.

Some Popular Plans

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

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

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, 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.

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.

1. 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 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 @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.
2. Child Educational Protection Plan with profits: Multiple benefits in the form of
scholarship, monthly annuity etc. in addition to sum assured is available under these
plans. Under one plan sum assured or a part thereof is also payable to the policyholder
in case the child dies prematurely.
3. 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.
4. Moving Term Plan: Policies under the plan are initially issued and is 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
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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.
5. 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
proposed. This plan perfectly suits the needs of the executive class.

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.

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:

SLIC 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 from the date of such withdrawal.
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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 10% to 12% of sum assured at maturity of policy depending on
terms if the policy would have been in force for at least 2/3rd of its term.

Average Rate of Bonus

On the basis of the three types of bonuses the Company now pays to it’s with profit policies,
the average bonus earned by a Tk. 1, 00,000 sum assured endowment policy per thousand
sum assured per year shall be as following:

Term of Policy           Total bonus at maturity         Average rate per thousand per S.A. year

10 years                               Tk. 52,000                                                 Tk. 52

15 years                                Tk. 81,000                                                 Tk. 54

20 years                                Tk. 1, 15,000                                              Tk. 58

Sandhani Life first launched Micro-insurance product in 1990 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 Sandhani 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.

Coverage map:

Sandhani life insurance Company limited is one of the renowned insurance companies all
over the country. It covers a huge area for its service. A coverage map is given bellow:
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Target group and the product

In GNB/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/her. There is no need for medical check-up. The person
needs to be between 18 and 45 years of age, have a monthly income of Taka5,000/=(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.

Policy Documents and Micro Investment (Loan)

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.
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Micro Investment (Loan)

GN-GRB gives small project loans to its policyholders on 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 installments. 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 at least one year before
being eligible for a loan. The maximum loan given is Taka 5,000/= (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 installments 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.

Group Life Insurance

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 ³Employee Benefit Package´ in Bangladesh.
Exclusive features of Group Insurance are: Insurance coverage to a number of individuals
under a single contract

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

 Simple insurable conditions

 Easy administrative procedure
 Prompt claim settlement
 Affordable premium
 Tax exemption on premium

Sandhani 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 Sandhani Life Insurance Company Limited include:

 Semi-Government organization, autonomous bodies

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 Private, Non-Government Organizations (NGO’s)

 Educational & Financial Institutions
 Public Limited Companies
 Associations, Business organizations etc

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

 Traditional Schemes: for insurance coverage of members/employees of a group

 Exclusive Schemes: for insurance coverage of clients of financial institutions

There are different types of Income source of Sandhani life insurance Company limited.
This are:

Premium:

 1st year premium
 Renewal premium

Others:

 Assets sales income

 Investment income
 Late fee
 Change fee
 Advance receipt
 Arrear receipt

The Income sources of Sandhani Life Insurance Company limited are given
bellow:

 Income Sources
 1st year premium
 Renewal premium
 Home loan premium
 Interest on home loan
 Late fee
 Alteration fee
 Re-writing fee
 Policy stamp fee
 Loan bond fee
 Policy loan recovery
 Interest on policy loan
 Motor cycle loan recovery
 Interest on Motor cycle loan
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 By-cycle loan recovery

 Interest on By-cycle loan
 Linces fee
 Proposal form
 Calendar
 Dairy
 Telephone Index
 Visiting Card
 Rate book
 Uttaron
 Application fee for home loan
 Application fee for Delta care hospitalization
 Premium

Accounts control: 

There are two types of account control system for maintaining the accounts of Sandhani life
Insurance Company limited.

1) Cash system

2) Crual system

Cash system: Cash system is a system which is used by Sandhani life Insurance Company
limited to maintain the cash received and payment only based on daily basis. Use some
documents and bank memorandum or vouchers. Without cash basis others accounts are not
included here.

Crual system: Here only those payments are included which are payable in future or could
be earn in future. No cash payments are included here. This is used for future transaction.

Account circle:

 There is a account circle maintain by the Delta Life insurance Company Limited. This is
given below:
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The main service of Sandhani Life insurance company limited is Ordinary Life insurance.
This Ordinary Life insurance uses three types of documents for its procedures. These are

 P.R (present receipt)

 Daily receiving statement
 Check credit advise

These three types of documents used by the company to make easier transaction and early
settlement. In present receipt used for collecting present documents. In daily receiving
statement it has Date, Amount, branch name, bima number in the chart. Check credit service
is used specially for early settlement.

Corporate Social Responsibilities (CSR)

Community

We aim to be a good corporate citizen and to work in partnership with the community. We
have participated while the nation in a crises of natural disaster.

Customers

We will determine our customer’s needs and have a commitment to provide high quality
services to meet them.

Environment
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The Company reports annually our direct and indirect contributions to improving the
environment.

Health & Safety

We are committed to providing a healthy and safe working environment for our staff and
visitors.

Human Rights

We respect the Universal Declaration of Human Rights and are guided by its principles. The
company strictly follows non-discriminatory policies in all its procedures such as recruitment
and promotions and has in place a performance management system that rewards employees
based on merit and contribution.

Standards of Business Conduct

We are committed to ensuring our business is conducted in all respects according to high
ethical, professional, and legal standards and follows good corporate governance practices.

Suppliers

The Company’s suppliers are carefully assessed and approved against established criteria.
Suppliers are managed as partners in our operations and we arrange seminars with surveyor
companies to improve communication and provide technical skills training. In addition, to
ensure compliance with our high service quality standards, satisfaction surveys are conducted
regularly to measure service performance.

Workforce

The Company holds a biannual Employee Focus Survey, which focuses on the drivers of
business performance, in particular employee engagement and customer focus. The
company's aim is to be as an employer of choice by engaging its staff and providing them
with the necessary skills and opportunities to contribute to the company's success and fulfill
their potential.

SWOT ANALYSIS

Not surprisingly, in the competitive arena of marketing era SWOT analysis is a must base on
product, price, place and promotion of a financial institute. From the SWOT analysis we can
figure out ongoing scenario of the bank. So to have a better view of the present

SWOT Analysis

1) Internal factor

(a) Strength

(b) Weakness
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2) External factor

(a) Opportunity

(b) Threats

SRTENGTH:

 Quality of the Delta Life management

 Location of the Delta Life sales & Agency Office
 Good banker-customer relationship.
 Financial condition of DLICL
 Environmental constraint
 Personal relationship with the DLICL employees

WEAK NESS:

 Sometimes it takes longer to meet claims

 Have not the same position in all the branches.
 Sometimes it could not get its target in service center.

OPPORTUNITY:

 Huge business area.

 Introducing on line system all over the country in insurance business.
 Growth of sales volume.
 Introducing more branches.
 Develop relations and correspondence with foreign Insurance companies.
 Could make contacts with more banks

THREATS:

 Other Insurance Companies in Bangladesh.

 Different classic service of other Insurance Companies.
 Political unrest and Economic recession.
 Illegal business operation by the some clients.
 New entrance

Recommendations:

It is an auspicious for Sandhani Life as a well reputed leading insurance company of

Bangladesh. This has been able to attract customer. Sandhani Life facing extensive
competition from the new entrants and the other insurance company. So, to increase market
share and to retain customers it should take proper policy and strategies that can play vital
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role on the present competitive situation in the insurance sector. The following measures
should be under taken to improve more the insurance business of Sandhani Life.

 The findings of this study observed that the executives of SLICL, have little judgment
(idea) about their customers. So in this case, training program should be under taken
to develop the interpersonal dealings of the SLICL employees.
 As both clients and beneficiaries are influenced by most of the same factors. So
SLICL should give importance or priorities to allure customers by developing or
formulating the same strategies or policies for clients and beneficiaries.
 As the bank choice of customers (both clients and beneficiaries) are related with the
customers satisfaction, so it should improve the performance of promises in time,
personal attention to the clients, tangible Insurance facilities and courteous and
knowledge of insurance employees.
 “Quality of the SLICL management”, “Reputation of SLICL”; “personal relationship
with the employees” and “Location of SLICL office” implies the implicit cause of
insurance choice such as perceived risk by customer. So the management of SLICL
should take the corrective measures to reduce the financial risk, performance risk,
physical risk, social risk and psychological risk perceived by customers.
 The choice factors of bank implicate the customers perceptions of value including two
sides total customer value and total customer cost. Total customer value included
product value, service value, personnel value, and image value whereas total customer
cost includes monetary cost, time cost, and energy cost and psychic cost. So the
management of SLICL should try to equalize the value between the two sides.

Conclusion:

Sandhani Life insurance Company is one of the leading insurance Company in Bangladesh.
The performance of Sandhani life Insurance company is getting better day by day. Its
premium, assets, claims meeting, utilization of income is getting better in last five years. The
study is about the activities of Sandhani Life Insurance Company limited, its cash payments,
claims meeting, premium collection, service offered, products etc. The study also has showed
that the factors are related with the customer perceived risk and customer’s value and cost
furthermore, the study has identified that the SLICL customer (both Clients and beneficiaries)
are influenced by most of the same factors. Here Sandhani life insurance Company limited
could improve its marketing strategy for customer satisfaction. Overall we can see that
Sandhani life insurance Company limited is one of the progressive Insurance Company in
Bangladesh for its servicing and its better performance.

Reference
www.Sandhanilife.com
www.google.com
www.wekipedia.com
www.assignmentpoint.com