COMPANY LTD HELD ITS 15 TH ANNUAL GENERAL MEETING The 15 th Annual General Meeting (AGM) of Prime Insurance Company Limited approved 30 per cent stock dividend for the year ended on December 31, 2010, in the city on Monday, April 18, 2011 at the auditorium of Bangladesh Institute of Administration and Management (BIAM). Mr Ferdous Amin, Chairman of the Company, presided over the meeting. A large number of Shareholders attended the meeting and unanimously approved the Accounts for the year ended December 31, 2010, Directors Report and the Auditor s Report. Moreover, the Shareholders appreciated the increase in the net profit (after tax) of Tk 83.24 million. They also approved the election of Directors, appointment of the Auditors for the year 2011 and fixation of their remuneration. They also considered the post facto approval for appointment of Mr Md Ezhar Hossain as Managing Director. In his speech, Mr Ferdous Amin said, Prime Insurance is eager to fulfill its vision to be one of the top insurers in the country by providing faster services to its clients. He said that the company planned to strengthen its operation and expand its business across country. He assured the Shareholders that the financial footing of the company would be strong and the Shareholders would get better and attractive return from their investments in the days ahead. Mr Md Shah Alam, Vice Chairman along with Ms Nazma Haque, Mr Md Zakiullah Shahid, Mr Shah M Hasan, Alhaj Abdul Gaffar Dubash, Mr Mizanur Rahman Mostafa, Mr Abu Hasan Khan, Ms Farhana Chowdhury- Directors and Mr AKM Nozmul Haque, Independent Director were present on the occasion. Mr Md Ezhar Hossain, Managing Director, Ms Mohammodi Khanam, Additional Managing Director, Bayazid Muztaba Siddiqui, Deputy Managing Director along with Mr Kamal Pasha, Company Secretary, Mr Md Lokman Hossain, Chief Finance Officer, and other officials were also present on the occasion. CREDIT RATING REPORT 2010 Prime Insurance Company Limited has recently been awarded to A from A- by the Credit Rating Information and Services Limited (CRISL) based on the company s high claim paying ability and satisfactory protection factor. The rating was assigned to Prime Insurance based on the Audited Financial Statements of the year ended on December 31, 2010 and other relevant information. Good Financial Performance, Improving Solvency Position, Good In-house Business, Diversified Investment Portfolio, Good IT Infrastructure, Experienced Top Management, Faster Claim Paying Ability, Healthy and Ethical Business, Good Working Environment, etc are the areas that rated the company in category A. Prime Insurance is committed to offer high quality insurance service by providing its clients with Efficiency, Quality and Service. CRISL also views the company with Stable Outlook for its business growth and believes that the company will be able to maintain its fundamentals with the same trend in the projected future.
FIRST QUARTER FINANCIAL INFORMATION Prime Insurance Company Limited has already published its first quarter financial information of the company as it ended on March 31, 2011. According to the report, the company s Net Assets Value at present is BDT 34.39 billion. Company s Net Operating Cash Flow is BDT 9.57 million. The company has earned profit (before tax) BDT 16.90 million. Furthermore, Net Assets Value per share is BDT 16.70 and Net Operating Cash Flow per share is BDT 0.46. The number of weighed share after allocation of bonus share is 26,761,267. ELECTION OF CHAIRMAN AND VICE CHAIRMAN Mr Ferdous Amin and Mr Md Shah Alam have recently been reelected respectively as the Chairman and Vice Chairman of the Board of Directors of Prime Insurance Company Limited for next one year on its 213 th Board Meeting. Mr Ferdous Amin is one of the Sponsor Directors of the Prime Insurance Company. He has been contributing in the field of insurance industry for the last few years. He is also associated with the ready-made garments industry. He was a Director of BGMEA in the year of 2001-2002 and 2003-2004. Ferdous Amin, Chairman Md Shah Alam, Vice Chairman Mr Shah Alam is one of the Group-B Directors of the Prime Insurance Company. He is the Managing Director of M/S Radiant Shipping, Nice Food Products, Wellmart Super Store and also the Director of Western Marine Group. HELD TRAINING ON MARKETING AND MIS AND WORKSHOP ON WIN TO SELL: HOW TO IDENTIFY AND REACH THE TARGET GROUPS BY SENIOR EXPERT OF PUM- THE NETHERLANDS Prime Insurance organized a two weeks long internal training program on Marketing and MIS and Workshop on Win to Sell: How to Identify and Reach the Target Groups by foreign consultant, Mr Jozef Maria van der Poel, Senior Expert of PUM- The Netherlands from May 16, 2011 to May 26, 2011. In the training program it was also discussed Team Fellowship and Increase of Efficiency Level for Work. Marketing and Branch Control personnel along with the Management Team of the company attended the training program and certificates were distributed after completion of the training program. Furthermore, such training program is the continuous process for the company s service efficiency development and also to secure the interest of insured and the business partners.
MOHAMMODI KHANAM JOINS AS ADDITIONAL MANAGING DIRECTOR Ms Mohammodi Khanam, a reputed Insurance personality, has recently assumed the office of Additional Managing Director of Prime Insurance Company Limited. Prior to this appointment, she was an Executive Director, Head of Branch Control, of Green Delta Insurance Company Limited. She has in her credit more than two decades of experience in Insurance arena. Ms Khanam completed her MSS along with her BSS (Honors) in Economics from the University of Dhaka. She is an Associate of Bangladesh Insurance Academy (ABIA) and received prestigious Tyser Award for outstanding result. She attended a certified foreign training on Maritime Insurance Claims and Non Marine Insurance Claims under Tyser & Co Ltd in London. She had training on Reinsurance Practice and Methodology as well. She attended a seminar on Micro Insurance organized by Bangladesh Insurance Academy. During her long 23 years of experience in Insurance Profession, she worked in Branch Control, Claims, and Reinsurance. She has been awarded the esteemed International Who s Who of Professionals (USA) and also has been featured in the 2009-2010 edition of the Madison Who s Who Registry of Executives and Professionals. She has also been recognized as an International Trade Finance Specialist. She is a Life Member of Bangladesh Economic Association. She is a Regular Trainer of Bangladesh Insurance Association, Prime Bank Limited Training Institute, Dhaka Bank Limited and also occasional trainer of Pubali Bank Training Institute, and other private banks. Furthermore, she has been adjoined with Bangladesh National Television (BTV) as Program Announcer and Conductor since 1981. CONGRATULATION TO PRIME BANK CHAIRMAN Mr Md Ezhar Hussain, Managing Director, Prime Insurance Company Ltd along with Ms Mohammodi Khanam, Additional Managing Director of the company, recently paid a complimentary visit to Mr Mohammed Aminul Haque, in order to Congratulate him on his being elected as the Chairman of Prime Bank Ltd.
Feature: 1 MOMENT WITH... (The vision of our quarterly newsletter is to make its readers know about something informative and interesting. Therefore, we attempt to publish features on our valued clients who are contributing to the country through their entrepreneurship. For the second issue of our newsletter we have selected Mr Md Shakhawat Hossain, Managing Director of the leading shipbuilding company of the country, Western Marine Shipyard Limited for an interview in order to let you know how they run their business and their objective of establishing such heavy industry business in Bangladesha developing country.) About Mr Md Shakhawat Hossain: Mr Md Sakhawat Hossain, Managing Director of Western Marine Group established Western Marine Shipyard Ltd in 2000. Recently he has been awarded CIP for heavy industry for the year 2010. Mr Shakhawat graduated as a Marine Engineer from Bangladesh Marine Academy in 1981. Later he acquired MEO Class-1 (Chief Engineer) certificate from UK in 1989. He commenced his professional career with Bangladesh Shipping Corporation, subsequently served in different capacities in Singapore and Malaysia till 1993. In 1994 he started business by opening Western Marine Service in Chittagong providing ship repairing facilities. He is elected as the council Member of the Head Office, IMarEST, UK for 2009-2011. He is the first Bangladeshi to receive IMarEST President s Commendation Letter. Furthermore, he is a founder Director of Chittagong Metropolitan Chamber of Commerce and Industry. He is also a Director/Member of International Business Forum of Bangladesh (IBFB). He is the President of Chittagong Chapter and Life Member of Old Rajshahi Cadets Association. About Western Marine Shipyard Ltd: Western Marine Shipyard Limited is a pioneer ship building company in the country capable of constructing up to 10,000 DWT ocean-going vessels. The yard is fully equipped with all sort of hitech machineries and it comprises of all the major requirements for quality shipbuilding, which includes 35 acres of land, 3 modern slipways, fabrication sheds and yards over an area of about 140,000 sqm. Furthermore, to facilitate the construction works the yard has more than 50 various types of lifting equipments including number of heavy cranes, with capacity ranging from 5 Mt Ton to 100 Mt Ton. To initiate the tasks the yard has 4000 manpower, including 500 highly qualified Marine, Mechanical as well as Electrical Engineers, Naval Architects and Technologists. Currently, they are building 26 vessels and have already delivered 61 vessels to various local and foreign clients. The foreign customers of the shipyard include- Grona Shipping in Germany, Stella Shipping in Denmark, Lamor Corporation in Finland, Karachi Port Trust in Pakistan and Hundested-Rørvig Færgefart in Denmark. On November 26, 2010 the shipyard has created a history by delivering the largest vessels ever built in Bangladesh EMSSEA and EMSRIVER. These sister vessels are 5200 DWT ice-class multi-purpose vessels made for German owner. The shipyard has delivered another two of the same series on March 31, 2011 and eight more are under construction. A discussion with Mr Md Shakhawat: Hasina Begum, Assistant Manager, Public Relation as well as member of the Editorial Board of Prime Insurance, has conducted the interview with Mr Md Shakhawat. The conversation is as follows: Hasina: Good Afternoon Sir. At the very first of the interview, I want to thank you for giving us your valuable time. As we all know, Western Marine has earned the fame of being the pioneer shipbuilding company in the country, we want to know what made you think of establishing a world class shipyard in Bangladesh? Mr Shakhawat: Well, thanks for your interest. Actually, the reason behind this fruitful thought bears a long history. In 1994 the mother company of the shipyard Western Marine Services Limited began its journey. The intention was to provide technical support to vessels calling at Chittagong Port and Mongla Port (2 major ports of Bangladesh) in-case of any major breakdown. During those days the vessels calling at these ports had to face difficulties for lack of such expertise. Therefore, a group of marine professionals established the company
for the betterment of country s growth by providing technical support to foreign vessels calling at port. Later the mother company expanded its business in ship-repairing, dry-docking and export of spare parts for vessels in foreign nations. Then, in the year 2000 Western Marine Shipyard was established with the motto of building vessels for foreign ship-owners and creating new horizon of economic development in Bangladesh. Another reason for establishing a World Class Shipyard was to create the good image of Bangladesh all over the world. Shipbuilders are admired and honored globally for their contribution to the Nation in terms of foreign currency earning, mass employment and backward linkages. Hasina: Sir, in spite of the economic condition of the country, do you think it is prospective to expand ship building business in Bangladesh? Mr Shakhawat: Well, shipbuilding business is a very potential business and it is definitely prospective to expand it in Bangladesh. Though the recent global recession has affected the economy badly, the shipbuilding industry in this country was at rise. With the increase in regular global shipbuilding orders, the orders for small and medium sized vessels are ignored by the major shipyards. In the mean time, this huge market share is kept open for infant shipbuilders like Bangladesh. Therefore, a market has emerged for shipbuilding yards that can concentrate on producing smaller sea-going vessels whereas the industry leaders like China, South Korea and Vietnam go for the larger container ships, bulkers and tankers. Moreover, few shipyards capable of building international standard sea-going vessels have emerged in Bangladesh recently to meet this demand. Though it is a fact that Bangladesh is lagging far behind from the major shipbuilding nations, considering the present growth in the global shipbuilding, market experts say Bangladesh can catch-up to the course. Hasina: Would you please tell me how many ships have you built till now? Who are their owners? Mr Shakhawat: You ll be pleased to know that till 2007 we have built 54 vessels for inland and coastal use for various local clients. Our local clients include Bangladesh Government Bodies including LGED, CPA, BIWTA. Some of our local clients are Hotel Sarina, Brave Royal Shipping, Keari Tours and many others. In 2008 we went into international shipbuilding through Keel-laying of 5 X 4100 DWT ice class container vessels for Danish ship-owner. We have delivered 7 vessels to local and foreign buyers, 2 utility ferries to BIWTC, 1 floating reception vessel to LAMOR Corp AB, Finland and 4 multi-purpose vessels to Grona Shipping, Germany. Currently we are building 26 vessels for local and foreign owners: 8 MP vessels for Grona Shipping in Germany 5 Ice-class Container Vessels for Stella Shipping in Denmark 2 Passenger Vessels for Karachi Port Trust, Pakistan 1 Passenger Ferry for Hundested- Rørvig Færgefart in Denmark 1 Catamaran type passenger vessel for Chittagong Boat Club 2 Oil tankers for local clients 3 Fishing trawlers for Agro Food Services Ltd. 1 Ro-ro ferry for BIWTC 1 Pilot vessel for Chittagong Port Authority 1 Dredger for Mongla Port Authority 1 Crane Boat for Mongla Port Authority Hasina: One more thing, why did you choose Prime Insurance as your business Insurer? Mr Shakhawat: Truly, the professionalism and the way Prime Insurance treat their customers are the main reasons of our choosing Prime Insurance as the insurer of our new-built vessels. We are proud to have Prime Insurance as one of our partners and I look forward to conducting more business with them in the days onwards. Hasina: Finally, what do you envision for Future Bangladesh? Mr Shakhawat: That day is not far when Bangladesh will be globally known as a shipbuilding nation. We have walked through a long way at a very short period of time. Today, Bangladeshi shipbuilders are building vessels for foreign shipbuilding companies; it is indeed a matter of immense pride for us. But we still have a long way to go and I am hopeful and optimistic that we will definitely make it- as I believe as a nation we are very much active and we will be admired from all corners of the world for building quality sea-going vessels, which will sail across the seven seas with Bangladeshi flag hoisted. Hasina: Well, Sir, I really want to thank you once again on behalf of the Editorial Board of Prime Insurance for giving us the opportunity to have an informative conversation with you.
RISK MANAGEMENT Md Ezhar Hossain, Managing Director, Prime Insurance Co Ltd Risk management is the analysis and handling of risk using all forms of risk control. It brings together ideas and techniques drawn from many disciplines in order to provide a sound conceptual foundation and a set of tools for the analysis and control of risks. Therefore, risk management is concerned with the planning, arranging and controlling of activities and resources in order to minimize the impact of uncertain events. More methods- like, loss prevention and insurance may be employed in handling risk. A firm may spend large sums on trying to reduce the incident and severity of industrial accidents but it is still likely to insure the residual employers liability risk. Firms may suffer loss due to the destruction or loss of property either belonging to them or for which they are responsible. They may also incur large liabilities to third parties for accidents for wrongful acts of employees or agents or defects in their products. A firm may fail to produce its planned output at the planned unit cost owing to operation of many types of uncertain events. Production may be disrupted by- for example- fire, flood, strikes or cyclone. If an individual firm is exposed to any risk which could jeopardize its whole operation, it is likely that a member of the top management team will be assigned responsibility for dealing with it. For example -a pharmaceutical company may place a director responsible for product safety and the security of technical knowledge and research may equally be a top management job in a company operating in one of the high technology in industries. In such circumstances, the role of risk manager in relation to products and employers may be limited to the insurance arrangement. The larger and more continuous industrial processes become, the higher the ratio of business interruptions to material damage are likely to be. It is in this area that the justification for loss prevention reaches its highest level. Loss of production over a period of several months can lead to permanent loss of markets to competitors and in extreme cases may even result in closure of the industry provided that a company has adequate insurance cover for material damage and business interruption. Thus, insurance provides a means for handling risks with a low probability of suffering a large loss which an organization cannot afford or retain itself even on an internal funding basis. When loss experience is subject to large fluctuations from year to year and maximum losses may exceed a tolerable level that it becomes worthwhile to pay for insurance. Other reasons beside risk transfer considerations for entering into decisions to buy insurance is for various services which an insurer may provide through various services- like, risk reduction advisory and inspection services, financing and claim handling services. The whole purpose of insurance is to provide protection against uncertain losses. Important goals of all business firms are maximization of the rate of return on investment, high productivity, stability of financial results, economic growth and expansion. Most of the firms would include profitability amongst their primary objective. Therefore risk management policy and strategies will have to be decided in the light of corporate objectives. So, there is a close relationship between risk management policy and strategies of organizational objectives. A serious fire may destroy assets leading to cost of replacement. Moreover, there will be interruption of production leading to fall in turnover. In this situation, the firm has to raise cash to replace the assets. In this context purchase of insurance provides some degree of certainty regarding the amount and timing of cash outflows. Finally, risk management techniques, such as loss prevention, self-insurance scheme, purchase of commercial insurance will minimize the losses to the firm and obtain cash to replace the losses at the least possible costs from insurance companies. BIA DEMANDS FOR REDUCTION IN CORPORATE TAX Hasina Begum, Assistant Manager, Prime Insurance Co Ltd In Bangladesh, the Insurance business, after much adventure and experimentation, is now being established as an emerging industry distributed between the public and private sectors. The privatization policy adopted in the 1980s paved the way for a number of insurers to emerge in the private sector. This resulted in a substantial growth of premium incomes, competition, improvement in services, and introduction of newer types of business in wider fields hitherto untapped.
Up to 2000, the government has given permission to 24 general insurance companies and 10 life insurance companies in the private sector. Insurers of the country now conduct almost all types of general and life insurance, except corporate insurance and export credit guarantee insurance, which are available only with the Shadharan Bima Corporation. Numerous institutions, associations and professional groups work to promote the development of insurance business in Bangladesh. In this context, Bangladesh Insurance Association s (BIA) leaders demanded reduction of the existing high rate of corporate tax on the insurance companies, cut tax on their capital gain, and keep a tax exemption ceiling for the insurance agents in a prebudget meeting with National Board of Revenue (NBR) lately. They said the insurance companies are paying corporate tax at the rate of 42.5 per cent, like the commercial banks, and the rate is too high for the sector. The BIA also proposed reduction of the licence renewal fees of the insurance companies, and allowing the banks and insurers to get tax refund on offering of dividends, like the publicly traded companies. The government should impose tax on the insurance companies at a rate of 35 to 37 per cent, like the listed companies, and not at a high rate like banks, said BIA representative and Rupali Insurance Managing Director, PK Roy. He also proposed the NBR to reduce the rate of income tax for the life insurance companies to 15 per cent. Mr Roy also sought fixation of tax on the insurers capital gain at the rate of 5.0 per cent from the existing 10 per cent, and 3.0 per cent for the Sponsor Directors from 5.0 per cent. NBR first secretary (income tax policy), Apurba Kanti Das said that the majority of the insurance agents are doing their job on a part-time basis along with other full-time jobs. On this ground, the revenue board has not kept the provision of any tax exemption ceiling on their earnings as insurance agents. In the fiscal year 2002-03, the insurance companies were entitled to enjoy a 10 per cent tax rebate against the offering of minimum 25 per cent dividend. The BIA demanded reintroduction of the same in the upcoming budget. The Revenue Board Chairman assured the BIA of providing all possible support after discussing their proposals with the NBR field-offices. In addition, a total of 62 insurance companies are operating in Bangladesh till date. Of these companies, 60 are private, two state-owned and one is foreign. Insurance Development and Regulatory Authority, under the Ministry of Finance, is the regulatorybody of the country s insurance sector. At present, 43 general insurance companies and 17 life insurance companies are private. The two other public insurance companies are Shadharan Bima Corporation and Jiban Bima Corporation. BEST PERFORMERS Prime Insurance selects its best performer each month based on the employees Business in order to keep compe ve a tude among its staffs. In this regard, Mr Md Helal Uddin, Deputy Manager, Narayanganj Branch, has been selected as the Best Performer for the month of January. Mr Mainul Islam Chowdhuri, SVP and In- Charge of Kadamtali Branch has been selected as the Best Performer for the month of February and Ms Rouksana Malake, AVP, Principal Branch, has been selected as the Best Performer for the month of March. Md Helal Uddin Deputy Manager Mainul Islam Chowdhuri SVP Rouksana Malake AVP
SETTLES MARINE CARGO CLAIM Prime Insurance Company Limited has recently settled a Marine Cargo Claim of Taka amounting 1 million. Mr Md Ezhar Hossain, Company Managing Director handed over the cheque to Mr Md Rafiqul Alam, Deputy General Manager, Accounts, of NR Group (NRG Hometex Ltd) against settlement of Marine Cargo Insurance claim. In the ceremony, Mr Basudev Chakrabarty, Deputy Managing Director and In-Charge of Narayangonj Branch of Prime Insurance was present among others. Prime Insurance Company Limited Is Honored to Sponsor Country s One of The Leading Football Teams, Chittagong- Mohammaden Sporting Club Editorial Board of Prime Insurance ADVISOR Ferdous Amin Chairman of the Board EDITOR Md Ezhar Hossain Managing Director MEMBERS Mohammed Monirul Alam Kamal Pasha Mahmuda Akter Hasina Begum 63 Dilkusha C/A (6th Floor), Dhaka-1000, Bangladesh. Phone: (+88-02) 9562512, Fax : (+88-02) 9566923, email : info@prime-insurance.net