QUALITATIVE &QUANTITATIVE ANALYSIS OF

SANDHANI LIFE INSURANCE COMPANY LTD.

Insurance & Risk Management (F-210)

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A REPORT ON
SANDHANI LIFE INSURANCE COMPANY LTD.

Submitted To
Samia Sultana Tani
Associate Professor,
Department of Finance,
Faculty of Business Studies,
University of Dhaka.

Submitted By
Section: B

No.

Name

Roll No.

Anik Sha

21-089

Md. Rasedul Islam

21-253

Md. Azaharul Islam

21-261

Md. Rasadul Islam

21-263

Mehedi Hasan

21-271

Arjun Kumar Das

21-272

Md. Rafiqul Islam

21-273

Robiul Islam

21-282

Date of Submission:

Comments

15th December, 2016

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LETTER OF TRANSMITTAL
15th December 2016
To
Samia Sultana Tani
Associate Professor,
Department of Finance,
Faculty of Business Studies,
University of Dhaka.

Subject: Submission of Term Paper on QUALITATIVE AND QUANTITATIVE

SANDHANI LIFE INSURANCE COMPANY LTD .

Dear Madam:
It is an honor for us to submit the Term Paper on QUALITATIVE AND
QUANTITATIVE ANALYASIS OF SANDHANI LIFE INSURANCE COMPANY
LTD. which is prepared as a partial requirement of the course named Insurance & Risk
Management (F-210) of BBA program under Department of Finance of the Faculty of
Business Studies, University of Dhaka.
We would like to convey our special thanks and gratitude to you for patronizing our effort &
for giving us proper guidance and valuable advice. We have tried our best to cover all the
relevant fields. We earnestly request you to call upon us if you think any further work should
be done on the topic that you have chosen for us.

Thank you and look forward to receiving your cordial approval of our submission.

Yours Sincerely,

Md. Azaharul Islam

ID: 21-261

On behalf of the group members.

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ACKNOWLEDGEMENT
In performing our report, we had to take the help and guideline of some respected persons,
who deserve our greatest gratitude. The completion of this project gives us much Pleasure.
We would like to expand our deepest gratitude to all those who have directly and indirectly
guided us in writing this assignment.
In addition, we would like to show our earnest gratitude to our course teacher Samia Sultana
Tani , course instructor of Insurance and Risk management , University Of Dhaka, to
introduce us to the methodology of this report. From the direct observation of the company it
is easy to understand the necessity of insurance in Bangladesh.
Many people, especially our classmates and team members itself, have made valuable
comment suggestions on this proposal which gave us an inspiration to improve our report.
We thank all the people for their help directly and indirectly to complete our report.

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EXECUTIVE SUMMARY
As a course requirement for Insurance & Risk Management (F-210) the report is on a
QUALITATIVE

AND

QUANTATIVE

ANALYSIS

OF

SANDHANI

LIFE

INSURANCE COMPANY LTD. which is assigned to us by our course teacher Samia

Sultana Tani, Associate Professor, Department of Finance, University of Dhaka.
From this report, what we can learn about is given below:
1. Sandhani life insurance company
2. Functions of Sandhani life insurance company
3. Features of Sandhani life insurance company
4. Policies of Sandhani life insurance company
5. Sandhani Life's Vision & Mission
6. Premium
7. Ratio analysis
This is the report and related matter that you have assigned us on different lectures in this
semester. The report carrying essential rules and regulation that carry important meaning. We
also have been informed on Sandhani Life Insurance & its policies and features. We try our
best to make the report an excellent. This report is made according to your direction. We
appreciate you having this report as it will, we hope, help us in our academic and carrier life.

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TABLE OF CONTENTS
PART

Content
Introduction

PART-ONE

Quantitative Analysis
Liquidity Ratio
Leverage Ratio
Profitability Ratio
EPS

PART-THREE

Reference

7-8

Sandhani life insurance company

Policies of Sandhani Life Insurance
Company
Sandhani Life's Vision & Mission
Strategic Objectives
Features of Sandhani Life Insurance
Company

PART- TWO

Page No.

22
Findings and Recommendations
Conclusion
References

10
10
11-16

18

19
20
20
21

26
28
29

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INTRODUCTION
In this chapter we tried to describe the origin of the report, objective of the report, scope and
limitations of the report.

ORIGIN OF THE REPORT

The BBA Program under the department of finance offers a course named Insurance &
Risk Management (F-210) which requires submitting a report on a specific topic
determined by the course instructor. The report under the headline CASE STUDIES OF
SANDHANI LIFE INURANCE COMPANY LTD. has been prepared towards the purpose.

OBJECTIVE OF THE REPORT

There are several objectives to conduct the study which are:
1. Sandhani life insurance company
2. Functions of Sandhani life insurance company
3. Features of Sandhani life insurance company
4. Policies of Sandhani life insurance company
5. Premium
6. Bonus
7. Surrender value

METHODOLOGY
To prepare this report we have collected data from different published materials. Then we
have conducted a secondary study. After that we have prepared an informative and reliable
report. We also collect data from internet .This way we collected primary data from personal
visit of Sandhani Life Insurance Company. Thus we have used both primary and secondary
report to prepare this report.

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LIMITATION OF THE REPORT

Every study has some limitations. We faced some usual constraints during the course of our
preparation for the report. Lack of experience and knowledge are to main obstacle to prepare
this report.

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OVERVIEW SANDHANI LIFE INSURANCE

COMPANY LTD.

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SANDHANI LIFE INURANCE COMPANY

LTD.
Sandhani Life Insurance Company Ltd. is one of the leading Life Insurance Company in
Bangladesh since 1990.
Clients are the spirit of our business, so we build a genial & realistic relationship with clients.
SLIC enlarge its network by establishing agency offices. As a result in 31st December 2010
8.61 lac Policyholder is now under the shade of Sandhani.
SLIC provide Life Insurance coverage in the remote area as well as within all the people of
the country.
The core business activities of SLIC covers Micro Insurance for the Poor People, Ordinary
Life Policy for the General, Group Insurance for the Corporate, Education Policy for the
Students, Hajj Policy for the Religious People and so on.
To be a competent service provider, SLIC maintain the quality, also increasing the growth
rate by maximizing the Return on Investment.
As a whole SLIC is a complete package with corporate practice, diversified business profile
and foster entrepreneurship.

Policies of Sandhani Life Insurance Company

Commitments
To build a safe and sound prospect for every Individual, Society and Community.

Policyholder
SLIC seeks to build an ever relationship with the policyholder by providing a qualitative
service.

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Employees
SLIC seeks to enhance employees skill, efficiency and make them more innovative and
dedicative by providing effective professional training and a highly motivated remuneration
package.

Shareholders
SLIC seeks to satisfy the shareholders by achieving consistent operating performance and by
disclosing transparent financial information.

Business Partner
SLIC seeks to maintain excellent relationship with its business partners.

Community
SLIC seeks to live up its responsibilities to the community by providing various types of
Philanthropic activities to play a supportive role to protect our social, cultural, environmental,
economical and national interest.

Sandhani Life's Vision & Mission

1. To ensure social & family protection through Life Insurance Policy of all the families of
Bangladesh.
2. To ensure highest possible services to Shareholders & Policyholders of the company with
modern technology & dedicated professionalism.
3. To settle & handover insurance claims to the doorstep of policyholders or their nominees
within quickest possible time.
4.To provide highest dividend & bonus to the shareholders & policyholders respectively.
5. To increase asset, investment & life fund with modern technology & most efficient
management.

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Strategic Objectives
In order to achieve companys long-term goal, it has maintain a number of key business
objectives which are:
Prompt claim settlement;
Improve staff-client relationship;
Enhancement of employees skill and efficiency;
Maximize shareholders wealth through a sustainable return on their
investment;
Maintenance of social commitment;
Establishment of corporate governance.

Features of Sandhani Life Insurance Company

Ethical Principles
We are committed to living by the principles and practices established by our corporate and
social responsibility and business ethics, which enable us to manage effectively our impact on
the society and environment.

Integrity & Honesty

We believe only integrated, honest and sincere employees can bring the company in a
sustainable position.

Objectivity
We are committed to serve our clients and beneficiaries and conduct all business activities
according to the business principles.

Accuracy and In Timely Manner

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We are very much aware about the accuracy of all the calculation and evaluation by using the
report of the expertise and serve to the valued clients in timely manner.

Performance in due care

To maintain the professional competence, it requires a continuing awareness and an
understanding of relevant technical professional and business developments, so as a public
service provider we exercise a sound judgment in applying professional knowledge and skill
in the performance of such service.

Safety & Confidentiality

According to the principles of safety and confidentiality we are alert to the possibility of
inadvertent disclosure of information of a prospective client or employer and the
identification, evaluation and elimination of hazards that could cause harm to our employees,
property and the environment.

Respect and Trustiness

We earn the trust and respect of our shareholders, employees, clients and business partners by
being honest, fair & open and honoring our commitments.

Accountability & Transparency

We are in practice of highest level of accountability and transparency regarding our product,
business activities, performance and financial results to meet the expectation of all the valued
users and beneficiaries.

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Premium:
An insurance premium is the amount of money that an individual or business must pay for
an insurance policy. The insurance premium is considered income by the insurance company
once it is earned, and also represents a liability in that the insurer must provide coverage for
claims being made against the policy.
Insurance Premium earned by Sandhani Life Insurance Companies are given below:
Year
2011
2012
2013
2014

Premium(In Million)
263.26
224.92
236.95
222.62

Interpretations: In 2011 the insurance premium of Sandhanis was 263.26 .But in 2012 it was
224.92.In 2013 it has improved and again falls in 2014.So there is no stable increase or decrease
in the collection of premium

Claim:
An insurance claim is a formal request to an insurance company asking for a payment based on
the terms of the insurance policy. The insurance company reviews the claim for its validity and
then pays out to the insured or requesting party (on behalf of the insured) once approved.
Insurance claims cover everything from death benefits on life insurance policies to routine health
exams at your local doctor. In many cases, third parties file claims on behalf of the insured
person, but usually only the person(s) listed on the policy is entitled to claims payment.
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Insurance Premium earned by Sandhani Life Insurance Companies are given below:
Year

Claim(In Million)

2011

71.8

2012

89.72

2013

129.88

2014

172.54

Interpretations: From the analysis we have found that in 2011,2012,2013& 2014 the insurance
claim was 71.8,89.72,129.88 & 172.54.It has been seen that the growth rate of claim is increasing.

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Quantitative Analysis of
SANDHANI LIFE INSURANCE COMPANY LTD.

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Liquidity Ratios:
Liquidity ratios measure a firms ability to meet its current obligations. These include:
Current Ratio:
Current Ratio = Current Assets / Current Liabilities
This ratio indicates the extent to which current liabilities are covered by those assets expected to
be converted to cash in the near future. Current assets normally include cash, marketable
securities, accounts receivables, and inventories. Current liabilities consist of accounts payable,
short-term notes payable, current maturities of long-term debt, accrued taxes, and other accrued
expenses. Current assets are important to businesses because they are the assets that are used to
fund day-to-day operations and pay ongoing expenses.

Year
Current Asset
Current Liabilities
2014
233108472
24,221,665
2013
224,316,611
22,420,079
2012
69,497,682
15,585,771
2011
132,675,654
18,265,453
Table: Current Asset to Current Liabilities

Current Ratio
9.62
10.00
4.45
7.26

Graphical Presentation:

Interpretation:
The current ratio for the year 2011,2012, 2013 & 2014 is 7.26, 4.45,10 & 9.62 respectively,
compared to standard ratio 2:1 this ratio is more higher which shows comparitively high short
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term liquidity efficiency at the same time holding more than sufficient current assets mean
efficient use of resources.
Sales to Working Capital:
Sales to Working Capital = Sales / Working Capital
Sales to working capital give an indication of the turnover in working capital per year. A low
working capital indicates an unprofitable use of working capital.

Year

Sales Premium

2014
2013
2012
2011

23695
22492
26326
25094

Working
Capital
20888
20189
53911
11441

Sales to Working
Capital
1.134383
1.114072
0.488323
2.19334

Working Capital:
Working Capital means a measure of both a company's efficiency and its short-term financial
health. The working capital is calculated as:
Working Capital= Current Asset- Current Liabilities
The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has
enough short term assets to cover its short term debt. Anything below 1 indicates negative W/C
(working capital). While anything over 2 means that the company is not investing excess assets.
Most believe that a ratio between 1.2 and 2.0 is sufficient. Also known as "net working capital".
Graphical Presentation:

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Interpretation:
It is very clear from the above calculations that the working capital of the company is gradually
decreasing over the years, which does not show good short term liquidity efficiency. But in
2013 it is improved.

Leverage Ratios:
By using a combination of assets, debt, equity, and interest payments, leverage ratios are used to
understand a company's ability to meet it long term financial obligations. Leverage ratios measure
the degree of protection of suppliers of long term funds. The level of leverage depends on a lot of
factors such as availability of collateral, strength of operating cash flow and tax treatments. Thus,
investors should be careful about comparing financial leverage between companies from different
industries. For example companies in the banking industry naturally operates with a high leverage
as collateral their assets are easily collateralized. These include:
Debt Ratio:
Debt Ratio = Total Debt / Total Assets
The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of
funds provided by the creditors. The proportion of a firm's total assets that are being financed
with borrowed funds. The debt ratio is calculated by dividing total long-term and short-term
liabilities by total assets. The higher the ratio, the more leverage the company is using and the
more risk it is assuming. Assets and liabilities are found on a company's balance sheet.

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Year

Total Debt

Total Assets

Debt Raito

2013

10127

11204

0.903874

2012
2011

9333
8318

10139
9037

0.920505
0.920438

2010

7302

7947

0.918837

Table: Debt-to-Asset ratio

Graphical Presentation:

Interpretation: In 2012 company had the maximum assets comparison to the total debts. In 2013 it
had been reduced drastically.
Debt to Equity Ratio:
Debt to Equity Ratio = Total debt / Total Equity
The debt to equity ratio is the most popular leverage ratio and it provides detail around the
amount of leverage (liabilities assumed) that a company has in relation to the monies provided by
shareholders. As you can see through the formula below, the lower the number, the less leverage
that a company is using. The debt to equity ratio gives the proportion of a company (or person's)
assets that are financed by debt versus equity. It is a common measure of the long-term viability
of a company's business and, along with current ratio, a measure of its liquidity, or its ability to
cover its expenses. As a result, debt to equity calculations often only includes long-term debt
rather than a company's total liabilities. A high debt to equity ratio implies that the company has
been aggressively financing its activities through debt and therefore must pay interest on this
financing.

Year

Total Debt

Total Equity

Debt-Equity Ratio

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2013
2012
2011
2010

10127
9333
8318
7302

898
806
707
639

11.27728
11.5794
11.76521
11.42723

Table: Debt-Equity Ratio

Interpretation: SLI has the more debt proportion to the equity capital.In 2011 it had the highest
debt capital and in 2013 it has the lowest debt equity .
Long- term debt to equity ratio: A widely used measure of the balance between debt and equity
in the firms long term capital structure. The higher the ratio, the greater the companys leverage
is. Generally companies with higher ratios are thought to be more risky because they have more
liabilities and less equity.
Year

Long term Debt

Total Equity

Long term Debt to Equity Ratio

2013

1111

898

1.237194

2012

959

806

1.189826

2011

597

707

0.844413

2010

476

639

0.744914

Table: Debt Equity Ratio

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Interpretation: From the analysis of statements it is found that the equity is decreasing proportion
to long term debt.
Profitability Ratios:
Profitability is the net result of a number of policies and decisions. This section of the discusses
the different measures of corporate profitability and financial performance. These ratios, much
like the operational performance ratios, give users a good understanding of how well the
company utilized its resources in generating profit and shareholder value. The long-term
profitability of a company is vital for both the survivability of the company as well as the benefit
received by shareholders. It is these ratios that can give insight into the all-important "profit".
Profitability ratios show the combined effects of liquidity, asset management and debt on
operating results. These ratios examine the profit made by the firm and compare these figures
with the size of the firm, the assets employed by the firm or its level of sales. There are four
important profitability ratios that I am going to analyze:
Net Profit Margin:
Net Profit margin = Net Profit / Sales x 100
Net Profit Margin gives us the net profit that the business is earning per dollar of sales. This
margin indicates the profit after all the costs have been incurred it shows that what % of turnover
is represented by the net profit. An increase in the ratios indicates that a firm is producing higher
net profit of sales than before.
Table
Year
2014

Profit after
tax
602

Sales

Net Profit Margin Ratio

23695

2.540620384

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2013

687

22492

3.054419349

2012

935

26326

3.551621971

2011

1724

25094

6.870168168

Return on Assets:
Return on Assets (ROA) = Profit after Taxation / Average Total assets x 100
ROA measures of a company's profitability, equal to a fiscal year's earnings divided by its total
assets, expressed as a percentage. This is an important ratio for companies deciding whether or
not to initiate a new project. The basis of this ratio is that if a company is going to start a project
they expect to earn a return on it, ROA is the return they would receive.
Simply put, if ROA is above the rate that the company borrows at then the project should be
accepted, if not then it is rejected.

Year

Profit After Tax

Total Assets

Ratio

2014

602

11190

5.379803

2013

687

11082

6.199242

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2012

935

10167

9.19642

2011

1724

9037

19.07713

Table:
Graphical Presentation:

Return on Equity (ROE):

Return on Total Equity = Profit after taxation x 10
Return on Equity measures the amount of Net Income earned by utilizing each dollar of Total
common equity. It is the most important of the Bottom line ratio. By this, we can find out how
much the shareholders are going to get for their shares. This ratio indicates how profitable a
company is by comparing its net income to its average shareholders' equity. The return on equity
ratio (ROE) measures how much the shareholders earned for their investment in the company.
The higher the ratio percentage, the more efficient management is in utilizing its equity base and
the better return is to investors.
Year

Net Income

Total Equity

Ratio

2014

602

898

0.670379

2013

687

806

0.852357

2012

935

707

1.322489

2011

1724

639

2.697966

Table: Return on total equity

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Interpretation:

In 2011 company has the highest return of 2.69.While it was 1.32 in

2012.It is seen that the return is reducing year by year.

Earnings Per Share:

Earnings per share (EPS) is the portion of the companys distributable profit which is allocated
to each outstanding equity share (common share). Earnings per share is a very good indicator of
the profitability of any organization, and it is one of the most widely used measures of
profitability.
Growth in EPS is an important measure of management performance because it shows how much
money the company is making for its shareholders, not only due to changes in profit, but also
after all the effects of issuance of new shares.

2014

2013

2012

2011

48%

48%

30%

25.50%

Table: Earnings Per Share

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Interpretation:
EPS is one of the widely used method to measure its profitability. In 2013 and 2014 company
declared 48% of its profit per share .In 2011 it was 25.5%.

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FINDINGS & RECOMMENDATIONS

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Findings:
After the collecting and analyzing of data I have got some findings. These findings are
completely from our personal point of view. Those are given below.
Company is in very good position because of its asset strength and life fund.
There is most strength point is no loan from any institution.
As an insurance company, I have talked personally that they seem to believable
institution. There is no fraud.
Life fund is as stable as IDRAs rule.
It has skilled employee to serve the policy holder.

Recommendations:
Though the market is so much competitive, but the performance of the team of Sandhani Life
Insurance Company Ltd. is really satisfactory. Their offerings, services, post purchase behavior
with their valuable clients, regular notifications sent to the customers, organized way of making
policies, available agencies or branches, available customer care services through the whole
world etc. are helping them to capture the maximum amount of customers in this field. Some
recommendations for the organization areEvery employee are unhappy about their salary, it should increase.
Company should increase customer awareness about insurance sector.
Computerized system and latest communication devices are the most important elements
for the coming year for Sandhani Life Insurance Company Ltd.

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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 three years. The study is
about the financial of Sandhani Life Insurance Company Ltd., its cash payments, claims meeting,
premium collection, service offered, products etc. The study also has showed that the factors are
related with the investors, customers and cost furthermore, the study has identified that the
Sandhanis 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 Ltd. is one of the
progressive Insurance Company in Bangladesh for its servicing and its better performance.

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Reference
1. Sandhani life insurance companys policy paper
2. www.sandhanilife.com/
3. Annual Reports

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