Megna Life Insurance

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Introduction:

Meghna Life Insurance Co. Ltd Fundamental Company Report provides acomplete overview of the companys affairs. All available data is presented in acomprehensive and easily accessed format. The report includes financial and

SWOT information, industry analysis, opinions, estimates, plus annual andquarterly forecasts made by stock market experts. The report also enables directcomparison to be made between Meghna Life Insurance Co. Ltd and itscompetitors. This provides our Clients with a clear understanding of Meghna LifeInsurance Co. Ltd position in the Insurance Industry.

Meghna Insurance Company Limited At a glance:

Meghna Insurance Co. Ltd was incorporated on 18th March 1996 underthe company Act 1994 as a public company limited by shares for

carrying out all kinds of general insurance activities and was granted

certificate for commencement of Business on 8th February 2000 forgeneral insurance business. The Authorized capital is Tk. 200 million

consisting of 2,000,000 ordinary shares of Tk. 100 each. Thesponsors/subscribers have already contributed to the paid up capital of

Tk. 60.00 million as required by the Chief Controller of Insurance. Infulfillment of the conditions of license by the Chief Controller

of Insurance, the company now proposes to raise the paid up capital to

Tk. 150.00 million by issuing 900,000 ordinary shares of Tk. 100.00each by way of initial public offering (IPO). Since its establishment in

1996 as one of the leading general insurance companies in the

private sector, the Company has within a short span of timeestablished itself as one of the most reputed and trustworthyinsurance companies in the country. Selective underwriting and

prompt settlement of claims have contributed towards building up a

very respectable image of the Company within the businesscommunity. The Company has 18 branches throughout the country.

About the company:

n the ninetieth decade some enthusiastic Bangladeshi professionals along withsome others of similar state of mind dreamed of establishing a Life InsuranceCompany in order to participate in the financial activities of the country such asreduction of unemployment, alleviation of poverty and to contribute to the nationfor the upliftment of the lot of common people. Eventually due to ceaselessefforts and courageous initiative of the Chairman and some other entrepreneurs,Meghna Life Insurance Co. Ltd. was emerged in 1996.

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The main object of Meghna Life was to provide maximum financial security to aperson and families by giving modern Insurance facilities. Its other objectives areto turn it into a profitable savings institution through payment of bonus at anattractive rate and enriched servicing and invest the accumulated small savingsin the nation building various welfare and profitable projects.

Meghna Life Insurance Co. Ltd. was accorded formal approval by the Govt. on 5 th

May, 1996. It was emerged as the 4th Private Sector indigenous Life Insuranceafter a prolonged complicated process of preparatory work under the guidanceand leadership of Mr. Nizam Uddin Ahmed, the current and founder Chairman ofthe Company. It started carrying on the Life Insurance business since 1st June,1996. Meghna Life has now consolidated its position on strong footing. Atransparent and accountable management is here who are working relentlesslyto boost up its position on a prestigious level.The authorised capital of the company is Tk. 30 crore and paid up capital at

present stands at Tk. 9.375 crore.In 1996 Premium income, Life Fund & Investment was Tk. 3.30 crore, Tk. 0.04crore & Tk. 2.59 crore respectively and in 2006 such Premium income, Life Fund& Investment increased to Tk. 231.27 crore, Tk. 415.91 crore & Tk. 130.71 crorerespectively.From 1996 to 2008 Meghna Life paid 33.47 crore taka as death claim, taka 47.03crore as survival benefit Tk. 4.78 crore as maturity claims and Tk. 2.42 crore asbonus to the policy holders. This success has been possible due to constantguidance supervision and ceaseless efforts of the Honble Chairman and

Directors and the present competent management.It soon made a mark in the Life Insurance arena by not only being the top listedamong the Private sector indigenous companies, but by undertaking andsuccessfully implementing innovative and welfare oriented Life Insuranceschemes. It introduced an array of conventional Life and other Insuranceproducts of Loko Bima, Islami Bima (Takaful) Swanirvor Bima and Islami KhudraBima (Takaful) many of which were the first in Bangladesh. For the first timeHospitalization benefit Insurance product was also introduced by Meghna Life.Meghna Life has earned reputation in every corner of the insurance Industry. Itcan take pride of its prestigious achievements which are moulded withtransparency, accountability, impeccable working capacity, sincerity, honesty andsagacity.The company has diversified its products to match customers needs andsatisfaction. Currently it provides multifarious Life Insurance products to cater tothe aspirations & needs as well as religious beliefs to the clients. There is no iota

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of doubt that Meghna life will go forward with its new missions and visions in thedays to come.

Corporate information:

Date of Incorporation:05.05.1996Commencement of Business:05.05.1996with Department of Insurance:01.06.1996 Registered Office : Biman Bhaban (2nd floor)100, Motijheel C/A.,Dhaka-1000, Bangladesh.Phone, Fax & e-mail : 880-2-9558297, 880-2-9558993, 880-2-9556204

Fax No. : 880-2-7171942e-mail :[email protected]@meghnalife.comAuthorized Capital:Tk. 30 CroresIssued, Subscribed and paid up Capital:Tk. 16.45 CroresAuditors:A. Wahab &Co.Chartered Accountants Date of 1st Trading of share in DSE & CSE :04.09.2005Legal Adviser :TheLaw Society, Dhaka.

Board of Directors:

Chairman

Nizam Uddin Ahmed

Vice-Chairman

Hasina Nizam

Directors

Md. Jamal Uddin

Nasir Uddin Ahmed

Jobaida Nasreen

Sharmin Nasir

Dilruba Sharmin

Mazharul Islam

Independent Director

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Professor Md.Mohiuddin

Managing Director

Muhammed Shah Alam, FCA

Company Secretary

Mian Mohd. Mashiur Rahman

Management:

Managing Director

Muhammed Shah Alam FCA

Director-Marketing & Development

Lt. Col. (Retd.) M. Shamsuddin Ahmed

Adviser

M. A. Majid FCA

Consultant-Marketing & Dev.

M. Sultan Khan

Deputy Managing Directors

Md. Khorshed AlamD. S. Taiful Islam

N. C. Rudra

Sadequr Rahman

Senior Executive Directors

Md. Mohidur Rahman Khan

Md. Abdur Razzaque

Executive DirectorAbu Bakar Siddik Sohel

Quamrul Hasan Khondker

Joint Executive Director

Faruk Ahmed Siddique

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Senior General Manager

Md. Shamsul Hoque

Md. Kazi Ataur Rahman

Saifuddin Ahmed (Opu)

Aziz Ahmed

General Managers

Nurul Aman Chowdhery

Shajahan Ali Mollick

Md.Nizam Uddin

Monirul Hasan Milon

Abdul Kader

Company Secretary


:: Company :: Committees

Members of Audit Committee

Professor Md. Mohiuddin Chairman

Nasir Uddin Ahmed Member

Sharmin Nasir "

Members of Management Committee

Muhammed Shah Alam FCA Chairman

M.A. Majid, FCA Member

Lt. Col. (Retd.)

M. Shamsuddin Ahmed"

Md. Khorshed Alam "

D. S. Taiful Islam "

N.C. Rudra "

Md. Mohidur Rahman Khan "

Md. Abdur Razzaque "Abu Bakar Siddik Sohel "

Md. Shamsul Hoque "

Mian Mohd. Mashiur Rahman Member Secretary

The Shariah Council:

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1 Professor Moulana Muhammad Salah Uddin

Khatib, National Mosque Baitul Mukarram,Dhaka.

Chairman

2 Justice Mohammed Abdur Rouf

Former Chief Election Commissioner.

Member

3 Moulana & Poet Ruhul Amin Khan

Joint Secretary, Jamiatul Modarresin & Editor,

Daily the Inquilab, Dhaka.

Member

4 Mufti Mohammed Nurul Huda Fayazi, Pir

Saheb- Karimpur.Chairman, Quran Education Board,

Bangladesh.

Member

5 Moulana Mohammed Saleh

Principal, Madrasa-e-Alia, Khulna.

Member

6 Doctor Moulana M.A FaruqueChairman, Islamia Studies Department, South

East University

Member

7 Moulana Mohammed Ali Hossain.Ex-Principal Islamia Alia Madrasa,

Chalkbazar, Comilla.

Member

8 Mufti Muhammad Amimul Ehsan Muraqib

COMPANY REPRESENTATIVES

9 Al hajj Nazim Uddin Ahmed Chairman Member

10 Muhammed Shah Alam FCA, Managing Director

11 Abu Bakar Siddique Sohel, (ED-Islami Khudra Bima)

12 Quamrul Hasan Khondker, (ED-Islami Bima) Member Secretary

Major Offices:

Ekok Bima Loko Bima IslamiBima(Takaful)

IslamiKhudraBima

(Takaful)

SwanirvorBima

GrandTotal

HeadOffice

1 1

DivisionalOffice

18

RegionalOffice

98

RegionalOffice

64

192

Zonal 9 District 173 Zonal 6 District 590 Zonal 3 2540

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Office 6 Office 7 Office 0 Office Office 2

BranchOffice

287 ThanaOffice

10000 BranchOffice

245 ThanaOffice

3737

BranchOffice

48

15181

Total 402 11835 305

439

3

8

0

17917

Products:

Meghna Life Insurance Company Ltd. has introduced innovative and attractivepolicies with a view to attract different class of people of the country. At presentMeghna Life Insurance Company is offering the following policies in other 6 (Six)different categories:

Ordinary Life (Ekok Bima)

Group Insurance

Loko Bima

Islami Bima (Takaful)

Islami Khudra Bima (Takaful)

Swanirvar Bima

Ordinary Life (Ekok Bima) :

Meghna Life offers a wide variety of ordinary life product/plans ranging from themost common endowment type to more modern and sophisticated plans likeendowment with open term, pension plan, child protection plan, etc. and the aimof increasing pension, increasing protection with provision for premium refundetc. The plans have been designed keeping in view the diverse and multifacetedneeds of the insuring public belonging to different strata of the Society.

The followings are the Plans of Ordinary Life: (Ekok Bima)

Sl. Schemes

1. Endowment Insurance Plan - with Profits

2. 3 (three) Payment Insurance Plan - with Profits

3. Biennial Endowment Insurance - with Profits

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4. Child Protection Endowment Insurance - with Profits

5. Insurance Cum Pension Plan - without Profits

6. Single Premium Guaranteed Benefit Plan - without Profits

7. Education Expense Insurance Plan - with Profits

8. Premium Back Term Insurance - without Profits

9. Islami Endowment Plan - with Profits

10. Islami Biennial Payment Assurance Plan - with Profits

11. Islami 5 (five) Instalment Insurance Plan - with Profits

12. Meghna Life DPI - with Profits

Group Insurance :

This scheme has been designed to make the officials and employees of MeghnaLife Insurance Co. Ltd. free from tension and financial hardship. With a verysmall premium, very large amount of Sum-assured may be taken with regard tothe risk of accident and premature death. The arrangement of Group Insurancemay be made if at least 10 members are there. In case of group term Insurancethere may be 5 members. Premium normally be paid on annual basis. Thepremium of this insurance may be paid fully or partially by the employees and theemployers.

Loko Bima :

Loko Bima Project was emerged on 13th June 1998. The aim and object of LokoBima Project is to arouse 90%. People of the country towards savings and tomake them conscious and self-reliant through Insurance. This project plays avery important role in solving social problems of a large number of people byreduction of unemployment, population control, development of cottage Industry,rural development so to say social backwardness etc. The following are the plansof Loko Bima-

Sl. Schemes

1. Endowment Insurance plan - with Profits.

2. Child protection Endowment Insurance - with Profits.

3. Meghna deposit Premium scheme - with Profits.

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4. Single Premium Insurance - with Profits.

Islami Bima (Takaful) :

The aim and object of Islami Bima (Takaful) is to provide more financial securityof the mass people of this country through this project. This project wasintroduced to turn Life Insurance into a profitable savings arrangement throughpayment by instalments on the basis of Islami Shariah and transparent andimpeccable servicing.The followings are the Plans of Islami Bima: (Takaful)

Sl. Schemes

1. Islamic Endowment Insurance Plan (Takaful) - with Profit

2. Islami Takaful 3 (three) Payment Insurance Plan - with Profits

3.Islami Bima (Takaful) Biennial Endowment Insurance Plan - with

Profits

4.Islami Bima (Takaful) Child Protection Endowment Insurance Plan -

with Profits

5. Islami Bima (Takaful) Insurance-Cum Pension Plan - without Profits

6.

Islami Bima (Takaful) Single Premium Guaranteed Benefit Plan -

without Profit

7. Islami Bima (Takaful) Education Expense Insurance Plan - with Profits

8. Islami Bima (Takaful) Premium Back Term Insurance - without Profits

9. Islamic Endowment Plan (Takaful) - with Profits

10. Islamic Biennial Payment Assurance (Takaful) Plan - with Profits

11. Islami 5 (five) Instalment Insurance Plan - with Profits

12. Takaful Islami DPI - with Profits

The project is conformed with a Shariah Council comprising 15 (Fifteen)

members.

Islami Khudra Bima (Takaful) :

The object of Islami Khudra Bima (Takaful) is to create habit of savings for thelow income group of people of Bangladesh, ensure profit and savings throughmodern Insurance facilities and to introduce interest free Islami Bima. These are

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the following plans-

Sl. Schemes

1. Endowment Insurance - with Profits.

2. Child Protection Endowment Insurance - with Profits.

3. Single Premium Guaranteed Insurance - with Profits.

4. Islami Khudra DPS - with Profits.

Supplementary Hospitalization Insurance Benefit

Those who are within the age of 18 to 55 years, they take this Insurance with theprincipal policy.

Advantages available in the Hospital-

Staying in the Private room.

Doctors Consultation Fees.

Diagnosis expenses.

Surgical Operation expenses.

Medicine.

Relevant Services Expenses.The special characteristic of the scheme:

This advantage may be taken for wife and children of the policyholder.

Very less premium. Any medical facility is available at home and abroad.

Facilities of any Govt. Hospital or any other Private Hospital with 50 bedsmay be available.

Medical treatment expenses in any extraneous hospitalization will beborne in Bangladeshi Currency.

Consultation of Doctors may be taken with ones own choice.

Rebate of Tax is available.Rules of payment of medical bill of the Hospital-

The company will directly make payment of the Hospital bills subject to

admission in the Hospital approved by the company.

Re-imbursement: If the policyholder himself bears expenses on approvedtreatment from the Hospital which has no contract with the company, in that casethe company will reimburse Hospital bills. But in these cases all the vouchers andpapers shall be deposited within 30 days after release from Hospital and thecompany will arrange reimbursement of those after due scrutiny.

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Supplementary Dread Disease Benefit (DDB 50%, 25%)

Disease and old age complicacy is indissolubly linked with human lives. Men

can, at anytime be attacked with serious disease and they may not be capable tohave proper treatment immediately. In this connection, Meghna Life can providemoney for treatment of such fatal diseases by DDB.Whatever Sum-assured may be, the supplementary Insurance cannot exceed 10lac as facility.If the policyholder is attacked with any of the following disease, 25% of the Sum-assured be paid immediately:

1. Heart attack2. Stroke3. Coronary Artinary Surgery4. Kidney Failure5. Multiple Sclerosis6. Paralysis.

Supplementary Accidental Death Benefit (ADB)

This supplementary Insurance may be taken adjoining the EndowmentAssurance, Whole Life Assurance, Term Assurance, Group Insurance or pensionscheme. ADB is normally given as supplementary cover with the Principal

Insurance policy.The advantages of taking ADB as supplementary cover with any Life Insurancepolicy is that if any policyholder dies due to accident the nominee of the insuredwill be provided with an amount equivalent to the Sum-assured within 90 days.The rate of premium is low in this Insurance as a result the Insured can take thispolicy as supplementary Insurance on nominal condition.

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Supplementary Permanent Disability and Accident Benefit (PDAB)

PDAB policy can be taken for death or disability by physical hurt due to accident.

In case of death the nominee of the Insured will get an additional amountequivalent to principal Sum-assured. An amount equivalent to the Sum-assuredis also paid to the nominee of the policyholder instantly if both hands or both legsor both the eyes or one hand and one leg are lost.In case of fully and permanent disability, the policyholder will be given 10% of theprincipal Sum-assured for next 10 years since the happening of accident asyearly allowance.In case of one leg or one hand and an eye are lost, the policyholder will be given50% of the Sum-assured instantly.

At the maturity, the full Sum-assured is paid.

Training:

There is no alternative to rise up in life without education and Training.Educational qualification is an indispensable part of a person engaged in anyprofession. Present age is the age of having expertise in any subject matter. One

must have sufficient knowledge on the works he has to do. It accelerates hisprosperity if he deserves his ability through achieving proper education andtraining.The management of Meghna Life Insurance Co. Ltd. has long been thinking tocreate technically qualified persons having sound knowledge on Insuranceprofession by giving them proper training and professional education.With this end in view the management opened a training cell in the company andappointed a senior official to impart professional training to the officials engagedboth in the field as well as in the Desk.

In the year at 2009 the company conducted different training courses on differentsubject matters for its officials which are as follows:

Sl.No. Course HeldNumber ofCourses

Total Trainees

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1. Sales Course 30 2767

2.Underwriting and Claims ManagementCourse

3 64

3.

Finance and Accounting Management for

Insurance Operation 3 45

4.Sales Course for the Zone/Branch Incharges.

12 721

5. Special Course for ExecutiveDirectors and Joint ExecuttiveDirectors, SVP and VP etc.

6. Office Management Course 2 82

7. Basic Course on Life insurance 2 12

8. Training of Trainers (ToT) 1 253 3,693

53 Training courses were held in different Divisional offices including Head officeof the company where 3,693 officials participated. The company also sent itsofficials to the Bangladesh Insurance Academy where 5 training courses wereheld and 20 officials participated in those courses.Besides, Meghna Life also introduced coaching classes since 2001 for theDiploma course conducted by Bangladesh Insurance Academy in its ownpremises where a good number of officials attended the classes. In themeantime, some of the officials have passed in the examinations. Meghna LifeInsurance Company Ltd. during 2001-2009 initiated epoch-marketing steps toprofessionally train up their officials and to make them fit to handle any technicalworks smoothly and perfectly.

Sales training:

A sales Training course for the officials of Loko Bima was held at the Head Officerecently. Hon'ble Chairman, Mr. Nizam Uddin Ahmed, Managing Director and the

Adviser are seen in the picture.

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Progress at a glance in last five years

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Progress at a glance last 10 years

Particulars 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

1st Year

Premium 89.96 78.31 64.87 58.26 49.17 34.30 27.41 23.35 17.90 12.09

RenewalPremium

177.10 152.30 118.81 89.84 57.64 41.59 28.69 19.26 12.01 7.28

GroupPremium

0.88 .65 .59 .35 .26 .22 .25 .17 .13 .09

GrossPremium

267.94 231.27 184.27 148.45 107.07 76.11 56.35 42.78 30.04 19.46

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InvestmentIncome

55.73 35.84 21.40 10.35 6.20 3.44 2.04 1.29 .91 .55

OtherIncome

0.42 .25 .10 .15 .44 .32 .78 .14 .12 .17

Total Income 323.52 266.96 205.15 158.59 113.03 79.87 59.17 44.21 31.07 20.18

PolicyBenefits

58.14 42.58 31.02 20.31 13.08 8.17 5.35 4.16 2.60 1.02

ManagementExpenses

114.91 94.34 76.23 64.34 52.65 38.71 32.93 26.23 18.65 12.47

OverallExpensesRatio(%)

42.88 40.79 41.36 43.34 49.16 50.86 58.43 61.31 62.08 64.08

Life Fund 550.57 415.91 294.23 201.33 131.00 84.99 53.65 34.28 21.19 12.08

InvestmentPortfolio

413.88 291.06 200.78 130.80 82.70 44.80 26.57 15.84 9.90 7.57

Total Assets 618.81 474.73 342.84 242.10 164.05 106.10 71.68 50.58 34.89 21.96

Business performance:

2009 2008 2007 2006 2005 2004 2003

Ordinary LifeNew Business

Number of Policies 52,102 43,579 44.620 44,599 42,745 32,210 30,651

Sum Assured (In Crore Taka) 460.76 364.84 328.77 292,93 264.98 192.39 179.51

1st Year Premium (In CroreTaka)

38.13 30.13 27.71 24.76 22.05 16.89 15.62

Business In Force

Number of Policies 2,14,730 1,83,714 170,1511,46,484

1,22,342 75,305 61,773

Sum Assured (In Crore Taka) 1491.79 929.68 862.76 729.96 601.43 430.52 351,08

Loko BimaNew Business

Number of Policies 1,24,818 1,71,993 1,53,3681,49,441

1,50,4521,09,502

87,476

Sum Assured (In Crore Taka) 364.42 400.34 289.17 260.00 237.98 164.98 125.23


27.23 26.64 20.27 18.58 15.72 10.13 7.43

Business In Force

Number of Policies 5,09,070 4,23,148 3,09,2132,52,740

2,09,761 84,885 69,959

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Islami BimaNew Business

Number of Policies 21,653 20,640 19.128 18,589 17,024 9059 7,278



14.96 13.42 11.91 10.49 7.79 5.27 4.11

Business In Force

Number of Policies 69,898 56,845 45.173 25,586 26.431 14.018 9,496


Islami Khudra BimaNew Business

Number of Policies 28,578 38,172 33.240 36.645 30,281 22,475 ---

Sum Assured (In Crore Taka) 79.86 84.66 65.82 65.94 54.69 39.30 ---


6.73 6.71 4.98 4.43 3.61 2.01 ---

Business In Force

Number of Policies 80,236 63,177 42.118 30.580 17,483 12,478 ---

Sum Assured (In Crore Taka) 181.73 103.61 63.04 49.42 32.43 23.23 ---

GroupNew Business

Number of Policies 16 5 4 4 --- --- ---

Sum Assured (In Crore Taka) 16 19.93 1.91 .35 --- --- ---

Annual Premium (In Crore Taka) 55.73 .010 .015 .029 --- --- ---

No. of Lives Insured 7530 1984 274 124 --- --- ---

Business In Force

Number of Policies 16 11 8 7 4 4 4

Sum Assured (In Crore Taka) 16 70.12 49.02 6.45 30.11 15.50 13.37

No. of Lives Insured 7530 7.149 2,997 2,475 2,187 2,013 1,531

Swanivar BimaNew Business

Number of Policies 4,699 2.291 --- --- --- --- ---

Sum Assured (In Crore Taka) 35.91 6.75 --- --- --- --- ---


2.91 1.41 --- --- --- --- ---

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Business In Force

Number of Policies 5,121 2,291 --- --- --- --- ---

Sum Assured (In Crore Taka) 39.49 6.75 --- --- ---- --- ---

Publications and library facilities:

Meghna Life Insurance Company Ltd. took initiative to bring out a publication titled Meghna Lifesince its inception. At the outset it was a half yearly publication comprising the news and views ofthe company. From 2000 it is being published yearly. But from Oct., 2004, this publication withthe same title Meghna Life is being published as a monthly bulletin with a new look and newvision. This Bulletin has aroused much enthusiasm and Zeal amongst the officials specially

working in the field. Its a special publication of its kind which demonstrates Businessperformances for every month. This is reserved for the officials of Meghna Life only. Other thanthese, special publications are also brought out in the wake of any seminar, symposium,meetings etc.

Meghna Life has brought out the following publications in Bengali-

TitleMode of Publication

No. ofIssues

RemarksPublished

Meghna Life Half Yearly 10 1997-2004

Islami Bima (Takaful) Yearly 2 2003-2004

Meghna Life (News Bulletin) Monthly 5 Oct. 04-March, 05

Loko Bima Yearly 3 2000-2003

Annual Report Yearly 8 Since 1997

Besides Meghna Life also publishes leaflets, Booklets, special issues of different projectsdetailing different plans and other relevant information.

Library Facilities:Meghna Life has a mini Library. There are some books on different subjects of Insurance such asLife Insurance, General Insurance, Salesmanship, Insurance law, Re-Insurance, Managementand other rare books in the Library.

The officials of Meghna Life Insurance Company have the opportunity to collect books fromLibrary for reading.

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Meghna Life donated Taka 10 Lac to the Army Relief Fund

Mr. Nizam Uddin Ahmed, Chairman, Meghna Life Insurance Company Limited accompanied byLt. Col. (Retd.) M. Shamsuddin Ahmed, Director of the Company is seen handing over a Chequefor Taka 10 Lac to General Moyeen-U-Ahmed, Chief of Bangladesh Army Staff recently for theSIDR hit people.

RISK FACTORS AND MANAGEMENT PERCEPTION REGARDING RISKS:

management team and expanding trend of insurance business in the country. MICLhas already proved its leading role by its attractive earning performance. The

coverage of natural calamities like cyclone, flood by insurance may severely weakenthe financial strength of the company by accruing heavy claims on its own retained

account. The estimated losses arising from natural calamities are covered by higher

rates of premium and reinsurance coverage for such losses. Management has takeninto consideration statistical assessment of occurrence of natural calamities in setting

its rates of premium and reinsurance risks. Moreover, most of our trained port folios

(Fire ncluding flood, cyclone risks) are protected under catastrophic Excess of LossTreaty with S.B.C. The company is operating in a field involving a great deal of

external/internal risk factors and the management ofMeghna Insurance CompanyLimited perceives the risk actors which are as follows simultaneously:-

Interest rate risks:

Interest rates change may affect profitability of the company for borrowing orinvestment.

Management Perception:

Company runs its business on the guideline of Insurance company act. The companydoes not involve with any large borrowing however it has substantial amount of FDR.

In the recent change in interest rate, the management is planning to diversify its

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investment in capital market and other profitable area of investment with complianceof Insurance Act as well.

Exchange rate risks: Devaluation of local currency against major international

currencies may affect companys marine insurance business adversely.

Management Perception:Marine insurance always covered by re-insurance with international re-insurer.Besides this if there is any burden for the company that will be overcome by the

increased business on other areas.

Industry risks:

I. Liberalization of permission to set up more insurance companies by theGovernment.

II. Natural calamities Liberalization of permission to set up more insurancecompanies by government may result in severe competition amongst insurers

resulting in reduction of premium income and profitability of the company.


Though liberalization of permission to set up more insurance companies bygovernment may be encouraging to new entrants resulting tough competition, MICLdoes not apprehend any loss of business due to its competent and highly

experienced.

Market & Technology related-risks:To be competitive in the market, insurance companies need to develop new products

andoffer excellent clientele services and also to expand the market by bringing more and

more items under the preview of insurance otherwise the competitors may takeaway

companys business.


Insurance business globally is increasing. New items are coming under the cover ofinsurance as days pass by, the market is expanding as people are realizing the

importance of insurance. Because of our excellent services and introduction of newproducts, the company does not envisage any market & technological related risks.

Potential or existing government regulations:Government policy change in respect of imposing new tax, VAT, stamp duty, rates of

premium, underwriting commission, agents commission, reinsurance commission,interest on deposits etc. may affect income and profitability.


According to the Insurance Act 1938 and Insurance rules 1958 all insurancecompanies have to comply with the allowable limit of expenses and investment. In

the recent past Caretaker Government new Insurance Act 2008 has been introducedwhich already approved in the committee of Jatio Sangsad of the present

government, which is very much favor of the insurance industry.

Potential changes in global or national policies:Any structural change in the international insurance business adversely affecting

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reinsurance operations may have negative impact on the profitability of thecompany.


The history of insurance/re-insurance business for over two hundred years provesthat any major structural change affecting our reinsurance business is unimaginable.

Any such event would create a global destabilization which the major economiesmust not cause to happen.

History of non-operation, if any:

Is there any chance for the company to become non-operative?Most of the general insurance companies in Bangladesh run its business successfully

and after IPO increases its efficiency and accountability under supervision ofregulatory body. So chance to become non-operative in future is minimum.

Operational risks:

Political and social unrest situations may affect smooth operation of the businessresulting in drastic fall to the value of its investment.

]

Management Perception:Political unrest in the past could not reduce the premium income of the company asthe shortfall is overcome by increased income in subsequent period.

Settleemnt of claims:

Claim Under Policies (Including Provision For Claims Due or Intimated) Less Re-Insurance byDeath/Survival : Tk. 581,411, 516

Particulars Ordinary Life Loko Bima Islami BimaIslamiKhudra

SwanirvarBima

Group Total

By Death 14,633,050 6,190,704 2,361,090 179,591 103,500 - 23,467,936

By Survival 247,312,826 7,159,600 91,863,600 - - - 346,336,026

By Surrender 2,095,828 2,515 356,656 - - - 2,454,635

Bouns in Cash 46,561,674 21,274,454 197,143 53,024 665 - 68,068,835

Claim by Maturity 66,445,080 74,639,004 - - - - 141,084,084

Total 2009 377,048,458 109,265,931 94,778,490 215,155 103,500 - 581,411,516

Total 2008 312,131,728 42,333,086 68,506,033 1,530,986 970,00 1,370,299 425,872,132

21


22/22

During the year 2009 the company has settled and adjust Tk. 580,462,700 including last yearoutstanding claims worth Tk. 259,577,955 as death claim, maturity claims and survival benefit.The amount of Tk. 271,691,732 was outstanding as on December 31, 2009. Out of outstandingamount, the company has settled Tk. 255,303,937 as of the date of audit

News & Events:

DATE : 22- 05- 2010

SUBJECT : Price Sensitive Information

Dear Sir,

This is for kind information of all concerned that the Board of Directors of Meghna Life

Insurance Company Limited in its 82nd (Emergent) meeting held on 22nd May, 2010 at4.15 p.m. to 5:15 p.m. has taken the following price sensitive decisions:

1. Denomination of share value

: To change the denomination of share value of thecompany from Tk. 100.00 to Tk. 10.00 each havingthe market lot as 50 (Existing market lot) sharessubject to approval of the shareholders and theregulatory authorities.

2. Purchase of a commercial space : To purchase a commercial floor space measuring3,500 sft. at 2nd floor of AFFORD SULTANELYSIUM PLAZA, Mouza- East Nasirabad,Chittagong Divisional Town, Chittagong, total valueto the tune of Tk. 2,45,87,500.00 (Two crore fortyfive lac eighty seven thousand five hundred) onlyexcluding the cost of stamp, registration fee andother related expenses.

Thanking you,

Yours faithfully,


Company Secretary

Documents

Megna Life Insurance