Northern General Insurance Co. Ltd.

Transcription

1 Northern General Insurance Co. Ltd. (If there is any contrary information please communicate with DSE through Disclaimer: The contents of this presentation are entirely based on disclosures made by the company. Therefore, DSE does not assume any responsibility on the authenticity of the facts and figures presented thereof. Brief Overview of the Company 1. Date of Incorporation: April 8, Authorized Capital: Tk. 250 million 3. Paid up Capital: Tk. 60 million 4. Number of Branches: 22 Details of the Issue Description Ordinary Shares Offer Value In Taka Capital in Taka Pre-IPO Placement 600, ,000,000 Public Offering 900, ,000,000 Paid up Capital after IPO Particulars Ordinary Shares Face Value (Tk.) Capital in Taka Pre-IPO Paid up 600, ,000,000 capital IPO 900, ,000,000 Paid up capital after IPO 1,500, ,000,000

2 Board of Directors: SL Name of Director Designation Shares Held (%) Other Associations 1 Al- haj Nasiruddin Chairman, Board of Directors 5.43% Vice-Chairman, Social Ivestment Bank Proprietor, Nasim Trading Company Proprietor, Nams Trade 2 Abdul Matin Chairman, Executive Committee Corporation. 5.43% Chairman, Metropolitan Medical Center Technical Director, Rupali Life Insurance Co. Proprietor, Modern Textile Mills Modern Dyeng and Screen Printing 3 Mohd. Azam Chairman, Claim Committee 4 S.M. Ayub Ali Chowdhury Chairman, Audit Committee 5.43% Proprietor, Zia and Brothers. Proprietor, Bushra Trading. 8.15% Managing Director, City Pharmaceuiticals Director, Hi- Fashion Director, K.B. Knit Fashion Director, Fortune Fashion Proprietor, M/S Chowdhury Construction.

3 SL Name of Director Designation Shares Held (%) Other Associations 5 Al-haj Md. Saiful Alam Director 8.15% Chairman, First Security Bank Director, Al-Arafah Islami Bank S. Alam Cold Rolled Steels 6 Thamina Rahman Do 7.30% 7 Hamidul Haq Do 7.30% Chairman, Paradise Corporation (Pvt.) Director, Eden Multi Care Hospital Director, First Security Bank 8 Foysal Ahmed Patwary Do 7.30% Director, Patwary Potato Flakes Director, Greentech Greenhouse Bangladesh. 9 Ferdousi Islam Do 7.30% Director, Prime Bank Trusty Association Co. Chairman, Preema Construction Director, Razanigandha Cargo Chairman, Baznabo Textile Mills Chairman, Prime Sanctuary

4 SL Name of Director Designation Shares Held (%) Other Associations 10 Al-haj Md. Shafiul Alam Do 7.30% Chairman, Ambia Accessories Proprietor, Patenga Builders Corporation. Chairman, S.A. Chemical Industries Chairman, Ocean Shipping Agencies (Pvt.) 11 Md. Sarwar Salim Do 7.30% Panwin fashion Director, Western Developers 12 Abdus Samad Do 5.43% Director, Al-Arafah Islami Bank S.Alam Power Plant Karnaphuli Prakritik Gas Proprietor, Samad Trading Agencies.

5 Performance at a glance Particulars Net Premium Growth 21.98% 13.32% 10.17% % Net Claims Growth 24.51% 31.01% % % Management Expenses Growth 0.47% -1.78% 10.81% 9.19% Net Profit after Taxes Growth % % 64.87% 40.50% Earnings per Share Growth % % 64.87% 40.50% Post IPO EPS Growth % % 64.87% 40.50% Total Assets Growth 2.57% -3.52% 8.51% 4.41% Retained Earnings/Accumulated Profit (11.65) (8.01) (4.85) Growth % 95.19% Total Reserves* Growth 35.91% 21.28% 24.97% 5.11% Total Net Assets Growth 7.99% 6.67% 13.22% 15.60% Net Asset Value per Share Growth 7.99% 6.67% 13.22% 15.60% *Total Reserves = Reserve or Contingency Accounts+ Balance of Funds and Accounts USE OF PROCEEDS: The Company offers its shares to the public as required by the Insurance Act, 1938 and Insurance Rules, The net proceeds of the present issue of 900,000 shares of Tk each at par totaling Tk. 90,000, will strengthen the capital base of the Company and augment business expansion.

6 RISK FACTORS AND MANAGEMENT S PERCEPTION ABOUT RISKS: Interest rate risks Profitability of the company also depends on interest rate structure other than underwriting profit earned by the company. In 2007 the company has earned Tk. 10,695,845 as interest income. Moreover the company has procured vehicles on bank financing. Any unfavorable change in interest rate structure may affect the company s business adversely. The effect of change in interest rate structure will be very negligible in case of bank financed vehicles. On the other hand, if income on fixed deposit falls the company will go for alternative investment schemes to utilize its funds. Exchange rate risks Taka had been devalued significantly against dollar and it is very unlikely of any immediate appreciation of Taka. Devaluation of local currency against major international currencies may not affect the company s insurance business. Since NGICL is not engaged into any insurance business in foreign currency, exchange rate risk is not relevant here. Industry risks The company is operating in a highly competitive industry. Presently, 62 insurance companies are operating in the country, of which 44 including the SBC are in general insurance business and the remaining 18 including the JBC are in life insurance business. NGICL has to face stiff competition arising from the existing 43 general insurance companies excluding SBC. The company has successfully accessed the market till date with a proactive approach by a group of professional and vast experienced insurance people. Therefore, the company is working on offering services at competitive terms. Despite the extreme competition, NGICL s business operations show satisfactory performance. Market and technology-related risks To be competitive in the market, insurance companies need to develop new services /products and offer excellent clientele services and also to expand the market by bringing more and more items under the preview

7 of insurance otherwise the competitors may take away company s business. Insurance business globally is increasing. Industrialization and other infrastructure of the country are remarkably developed, as such the general insurance business is increasing day by day. New items are coming under the cover of insurance as days pas by the market is expanding as people are realizing the importance of insurance. Because of the company s excellent services and introduction of new products, the company faces a very low degree of market and technological related risk. Potential or existing government regulations Government policy change in respect of rates of premium, underwriting commission, agent s commission reinsurance commission, interest on deposits etc. may affect income and profitability of the company. The Government has proposed new Insurance Act and Rules and try to shift the responsibility of insurance sector to Ministry of Finance from Ministry of Commerce to establish the discipline and corporate culture in this industry. Therefore a positive impact is expected on insurance companies. Potential changes in global or national policies Change in government policy as will as policy of foreign countries may affect adversely the business of the company. The history of insurance /re-insurance business for over two hundred years proves that any major structural change affecting our reinsurance business is unimaginable. Any such event would create a global destabilization,,, which the major economies must not cause to happen. Operations risks Political and social condition may affect smooth operation of the business resulting in drastic fall to the value of its investment. There is no record of reduction in the premium income of the company arising from political unrest in the past. Moreover insured are very much careful to take risk coverage on their properties. Therefore premium income ratio is increased at the time of political unrest.