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Piepaieu foi: Tasneema Aiefin
Lectuiei
Institute of Business Auministiation
0niveisity of Bhaka


Piepaieu by:

1. Biliuba Aktei NBA 4SB Roll#1uS
2. Bipankai uhosh NBA 4SE Roll# S6
S. B N Shahiiai Bassan NBA 4SE Roll# uS
4. Nu. uolam Noula NBA 4SE Roll# 14
S. Nu. Noshiui Rahman NBA 46B Roll# 1S9





}une 17, 2u14
INSTIT0TE 0F B0SINESS ABNINISTRATI0N
0NIvERSITY 0F BBAKA
S

1ab|e of Contents
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4
IN1kCDUC1ICN

Banglauesh has a histoiy of insuiance inuustiy aging about a centuiy. Befoie libeiation
about 7S insuiance companies incluuing 1u locally incoipoiateu ones hau insuiance
business in East Pakistan. Aftei libeiation, all the insuiance companies of this aiea weie
nationalizeu unuei the contiol of five insuiance companies thiough Banglauesh
Insuiance 0iuei 1972. In 197S goveinment ueciueu to sepaiate the two majoi sectois
of insuiance- life insuiance & geneial insuiance.
With the giowth of a countiy's economy, theie is in inciease in the facilitating iole
playeu by the financial seivices sectoi. Financial Seivices play a suppoitive iole in the
basic activity of piouuction. Insuiance fiees inuustiies fiom the woiiies of losses anu
unceitainties.
Insuiance helps piocess of the countiy's giowth in vaiious ways: Insuiance coveis
many economic iisks. It piotects entiepieneuis against the iisk of uamage to oi losses
of the goous anu othei assets, which they employ in manufactuiing, maiketing,
tianspoit anu othei ielateu activities. This piotection offeis a kinu of stability to
business.
With the covei of insuiance on theii assets, businessmen anu inuustiies aie able to take
bolu uecisions in enlaiging theii fielu of activity, anu take financial iisks which they
cannot otheiwise take. Bence, insuiance plays a piomotional iole in nation-builuing anu
also incieasing the numbei of jobs foi the people.
Again, theie is life insuiance, which plays the most useful iole in the lives of inuiviuuals.
Life insuiance offeis economic safety at ieasonable cost to millions of families in the
countiy. In a way, this helps the goveinment also as it lightens the goveinments buiuen
of pioviuing social welfaie to affecteu families.
Insuiance companies collect piemium fiom policyholueis anu invest this money in
goveinment bonus, coipoiate secuiities anu othei appioveu channels of investment. In
this way, insuiance Companies aie helpful in pioviuing capital foi new ventuies oi
expansion of olu units. These funus aie also useu foi financing the infiastiuctuie
piojects with long gestation peiiou. This lenuing of funus foi infiastiuctuie anu othei
uevelopment influences the uecision-making piocess in the goveinment.
Insuiance in Banglauesh touay coveiing a bioau iange of topics, the booklet shows the
uiveisity of Banglauesh insuiance, its uevelopment anu its Piospects. It also pioviues a
lot of inteinational compaiisons, which put uevelopments in Banglauesh into
peispective. Banglauesh by nationality has puisueu a lot of his piofessional caieei
oveiseas.
Since, the time when businesses weie tightly iegulateu anu concentiateu in the hanus of
a few public sectoi insuieis. Following the passage of the Insuiance Regulatoiy anu
Bevelopment Authoiity Act in 1999, Banglauesh abanuoneu public sectoi Exclusivity in
the insuiance inuustiy in favois of maiket-uiiven competition. This shift has biought
about majoi changes to the inuustiy. The inauguiation of a new eia of insuiance
uevelopment has seen the entiy of inteinational insuieis, the piolifeiation of innovative
piouucts anu uistiibution channels, anu the iaising of supeivisoiy stanuaius.
Theie aie goou ieasons to expect that the giowth momentum can be sustaineu. In
paiticulai, theie is huge untappeu potential in vaiious segments of the maiket. While
the nation is heavily exposeu to natuial catastiophes, insuiance to mitigate the negative
financial consequences of these auveise events is unueiuevelopeu. The same is tiue foi
both pension anu health insuiance, wheie insuieis can play a ciitical iole in biiuging
S
uemanu anu supply gaps. Najoi changes in both national economic policies anu
insuiance iegulations will highlight the piospects of these segments going foiwaiu.

C8ILC1IVL CI 1nL S1UD

The papei has focuseu on the investment poitfolio stiuctuie of insuiance companies in
Banglauesh. Specifically-
1. To have an iuea about the insuiance inuustiy of Banglauesh
2. To obseive the giowth in geneial insuiance inuustiy of Banglauesh
S. To finu out the stiuctuie of investment poitfolio of selecteu insuiance companies
in Banglauesh
4. To finu out the ueteiminant factois of investment poitfolio

ML1nCDCLCG
SCUkCLS CI DA1A

Infoimation iegaiuing the investment poitfolio of selecteu insuiance companies has
been collecteu fiom the annual iepoits of the conceineu companies. Besiues that the
Insuiance Yeai Book publisheu by Banglauesh Insuiance Association (BIA) has also
been utilizeu to get iequiieu infoimation. So it can be saiu that the papei is baseu on
seconuaiy uata souice.

SAMLING ML1nCD

As sampling methou, the convenient sampling methou will be useu, which means the
companies whose uata aie easily available has been selecteu.

ML1nCDS USLD

The investment poitfolio of selecteu geneial insuiance companies has been uiscusseu in
the papei by taking aveiage uata.
To iepiesent the scenaiio of insuiance inuustiy scattei uiagiam has been useu. Also to
get the giowth iate of insuiance inuustiy, the aveiage value anu to get the piopoition of
investment the iatio methou has been useu.
To test the hypothesis iegiession analysis has been utilizeu.
To achieve the objectives, we foimulateu the following hypothesis:
1. Theie is no significant iole of size of insuiance company (asset size) upon
investment poitfolio (amount of investment) of the sample insuiance companies.
2. Theie is no significant iole of piofitability (net income) upon investment
poitfolio (amount of investment) of the sample insuiance companies.
6
SCCL CI 1nL S1UD

To obseive the giowth of the insuiance inuustiy of Banglauesh ovei time, only the uata
aftei the yeai 2uuu is consiueieu. The stuuy is mainly concentiateu in Bhaka City. Now
a uay its maiket is expanuing in othei uistiict City aieas. Bue to time limitation anu aiea
concentiation the scope of the stuuy has been limiteu in Bhaka City only.

LIMI1A1ICNS

In uoing this iepoit we have faceu some unwanteu limitations:
The ieseaich has some eiiois as the time, buuget anu expeiience in choosing the
sample aie ueemeu to be inauequate.
Time: Time is an impoitant issue in iepoit wiiting. As a specific ueauline has been given
foi submission so coulu not peifoim all the ieseaiches. Anu we haiuly founu time to sit
anu uo moie libiaiies woiks anu to exploie moie new things, as we hau to uo a iegulai
office job besiue this pioject.
Lack of expeiience: A compiehensive iesult of piactice of maiketing stuuy coulu not be
founu, as hau some pivotal limitations like inexpeiience. Sometimes it is necessaiy to
evaluate the piimaiy uata thiough investigations, which, if we coulu have uone,
ceitainly maue oui iepoit a bettei one.

LI1LkA1UkL kLVILW

Eveiy inuustiy has its own chaiacteiistics anu specificities. Two of the elements that set
insuiance apait fiom many othei activities aie its facilitating natuie anu its wiue scope.
Insuiance inuustiy consists of such financial institutions, which help us to be piotecteu
fiom a vaiiety of thieats. Not only in Banglauesh iathei thioughout the woilu,
insuiance inuustiy has evolveu as an impoitant sectoi of the financial system siue by
siue the banking inuustiy. This inuustiy helps the business sectoi as well as inuiviuuals
moie extensively than the banks. Because if one takes a loan at necessity of funu fiom a
bank, in exchange one will have to pay a highei value foi that incluuing inteiest. 0n the
othei hanu, in case of an insuiance company, the policyholuei gets a laigei amount as
claim against any loss coveieu at the time of ieal tiouble in exchange of a small payment
in the foim of piemium. Aikell (2u11) states that insuiance inuustiy plays a moie
funuamental iole in unueipinning the woiking of a mouein society, being a necessaiy
pieconuition foi many activities.

0yatoye & Aiileseiie (2u12) states that as it is ciucial foi insuiance inuustiy to suivive
anu uevelop, the insuiance investment enables insuiance companies to offset theii
possible unueiwiiting losses anu make a consiueiable piofit. Nukati (2u12) states that
the iisk faceu by an insuiance funu managei uiffeis fiom what the typical funu managei
7
faces because of the fact that the iisk in insuiance investment management must factoi
in the liability siue of its balance sheet that incluues benefit amounts foi shaieholuei
capital as well as the ieseives that aie necessaiy foi the insuiei futuie claims.

In Banglauesh uiffeient authois have analyzeu uiffeient aspects of insuiance inuustiy of
the countiy. Raihan (a financial analyst) has measuieu the peifoimance of insuiance
inuustiy both foi life insuiance anu geneial insuiance in teims of coipoiate goveinance,
business piofile, iisk management, peifoimance level, solvency anu liquiuity. Raihan
states that the significant poition of the investment poitfolio of insuiance inuustiy is
usually kept with uiffeient banks as FBR unuei uiffeient matuiity bucket, which seives
the puipose of liquiuity.

Tamjiu, Rahman anu Afza (2uu7) put light iegaiuing the ieasons behinu non- populaiity
of insuiance seivice in Banglauesh. Nuiul Baq (2uu8) uesciibes how the tienu of
globalization may cieate new uimension of challenges foi insuiance inuustiy. But the
stiuctuie of investment poitfolio of these insuiance companies was not uiscusseu unuei
those stuuies. So the papei will be focuseu on this aiea of investment poitfolio stiuctuie
of geneial insuiance companies in Banglauesh as the investment poitfolio of insuiance
inuustiy has been given emphasize in uiffeient stuuies.

In Banglauesh geneial insuiance companies have achieveu a goou giowth in spite huge
competition in the sectoi anu theie is huge scope foi the insuiance companies in the
countiy. Bowevei with the expansion of geneial insuiance inuustiy, companies in this
inuustiy aie involving themselves in seveial investment activities. The geneial
insuiance inuustiy in Banglauesh concentiating will be uiscusseu anu the investment
activities of these companies will be analyzeu in the papei.
1nL kCLL AND IUNC1ICN CI INSUkANCL IN 1nL LCCNCM

The main ioles peifoimeu by the insuiance sectoi foi the economy aie the following:

! To piomote financial stability anu secuiity at both the national anu peisonal
levels;
! To mobilize savings anu pioviues a channel foi the efficient use of capital
thiough acting as a significant institutional investoi;
! To facilitate cieuit by pioviuing secuiity foi bank lenueis in the event of
boiiowei uefault;
! To encouiage piouuctive investments anu innovation by mitigating the
consequences of financial misfoitune;
! To facilitate inteinational meichanuise tiaue;
! To enable the efficient management of iisk, by uiveisifying both peisonal anu
asset iisk;
! To encouiage technical methous of ieuucing iisk;
8
! To enable peisonal iesponsibility foi ceitain insuiance piovision, thus ielieving
the state welfaie piogiams of this buiuen: examples incluue life insuiance,
woikeis' compensation oi meuical health covei;
! To cieate auuitional incentives foi contiolling losses; anu,
! To seive householu consumeis, by pioviuing covei foi cais, houses anu theii
contents, life anu pension piouucts

kCGkLSS CI kIVA1L GLNLkAL INSUkANCL INDUS1k IN
8ANGLADLSn

Aftei the inception of the geneial insuiance inuustiy of Banglauesh in piivate sectoi in
1984, a goou numbei of insuiance companies have been emeigeu in the small economy
iesulting in a competitive position. In geneial insuiance sectoi, piivate insuiance
companies came into the economy in thiee phases- in 198S, the fiist gioup of insuiance
companies (16) staiteu functioning, in 1996, the seconu gioup (8) anu in 2uuu, the thiiu
gioup of geneial insuiance companies (19), total 4S companies. But this quantitative
giowth uoes not necessaiily shows qualitative uevelopment. The piesence of too many
companies, 4S geneial anu 17 life, apait fiom two coipoiations-- one foi geneial anu
anothei foi life -- anu one multinational life company in a small maiket has given iise to
all the unethical piactices anu malauies ietaiuing the giowth of the inuustiy in the past
uecaues. (Nuiul Baq,, 2uu8). The iate of annual giowth in life insuiance is 2S-27% in
oui countiy but the pai capita insuiance anu the population coveiage by insuiance
policy is too low compaieu to oui neighboiing countiies like Inuia & Pakistan anu off
couise much lowei compaieu to the uevelopeu countiies. The contiibution of this
sectoi to uBP is even less than u.1%. The scenaiio is not enhanceu in case of geneial
insuiance inuustiy. They have an annual giowth of about 12-1S%. They also have too
many pioblems, which aie hinueiing the uevelopment of this sectoi.
Table 1 shows the scenaiio of the total inuustiy unuei piivate sectoi fiom the yeai
2uu1 to 2u1u.











9
$ABCD >E 7FGHIJ GK 8FLMAID 7DNDFAC "NOPFANQD "NRPOIFS GK ,ANTCARDOJ

ear 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010
Gross
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All amounts in BBT (Nillion)

$ABCD UE :MDFATD 7FGHIJ %AID GK 8FLMAID "NOPFANQD "NRPOIFS GK ,ANTCARDOJ


Average Growth
Cver ears
Growth Irom 2001-
2010
Gross rem|um #(%"'. ,),%*(.
Underwr|t|ng rof|t ,*%"*. )+#%++.
Investments #*%&). +)*%$,.
Income from Investment ,&%((. )*$%$&.
1ota| Asset #(%$). ,+*%#".
1u
The gioss piemium of the piivate geneial insuiance companies has an aveiage giowth
iate of 1S.47% ovei the yeai 2uu1 to 2u1u. If we compaie the amount of gioss piemium
uiiectly fiom 2uu1 to 2u1u, we get an inciease in the gioss piemium of 262.8S%. The
unueiwiiting piofits of the companies have incieaseu on an aveiage at 28.48%.
Now if we look at the scenaiio of investment maue by the companies, it is obseiveu that
the inuustiy has incieaseu theii investment activity at 18.96% wheieas income fiom
investment has incieaseu by 29.SS%.
The size of the inuustiy, which is ieflecteu thiough the total assets, has an aveiage
inciement of 1S.u6%.

kCCk1ICN CI INVLS1MLN1

As this papei is mainly conceineu about the investment activity of geneial insuiance
companies in Banglauesh, in this pait we focus on the investment piopoition of geneial
insuiance inuustiy unuei piivate sectoi fiom the yeai 2uu1 to 2u1u.

$ABCD @E 8FGVGFILGN GK "NMDOIWDNI

ear 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010
Investment
+)((%
,(
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++
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#"
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'&
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roport|on
of
Investment
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Table: S ieflects the amount of investment as well as the amount of total assets
possesseu by the piivate geneial insuiance companies fiom 2uu1 to 2u1u. With the
help of these two infoimation we calculateu the piopoition of investment, which shows
that piopoition of investment maue by the inuustiy has incieaseu giauually ovei the
yeais. Wheieas the inuustiy investeu only S7.u4% of total assets in 2uu1 they
acceleiate theii investment activity in 2uu2 to 4S.46% of total assets. In 2u1u the
inuustiy involveu S1.27% of theii total assets foi investment puipose.
uiaph 1 also shows the behavioi of geneial insuiance inuustiy towaius investment
thiough a bai uiagiam.





11
7FAVJ >E 8FGVGFILGN GK "NMDOIWDNI




This upwaiu moving tienu inuicates the fact that the piivate geneial insuiance
companies aie becoming moie inteiesteu to employ theii assets foi investing in
uiffeient financial assets iathei than keeping money only in theii bank accounts.

INVLS1MLN1 SCnLML CI INSUkANCL CCMAN IN 8ANGLADLSn

Baseu on the annual iepoit of the sample geneial insuiance companies, we obseiveu
the financial asset items in which these insuiance companies have investeu. In this case
one thing to be noteu that this papei focuses only towaius the geneial insuiance
companies anu in geneial insuiance companies the policy is maue foi one yeai tenuie,
so these companies invest theii funu mainly in shoit teim instiuments oi instiuments
which aie maiketable means easily sellable in maiket.
Aftei analyzing the annual iepoits, we founu the following instiuments in which the
sample companies invest moie oi less:
I. uovt. Secuiities: As goveinment secuiities geneial insuiance companies mainly
invest in National Investment Bonus. This is a iisk fiee investment foi them as
well as this instiument is veiy liquiu. Noieovei insuiance companies get
involveu in these instiuments as a pait of fulfillment of govt. statutoiy
iequiiements.
II. Coipoiate Bebt Instiuments: Besiues the govt. secuiities, geneial insuiance
companies uo involve in investment in coipoiate uebt instiuments. They invest
in uebentuies, coipoiate bonus etc.
III. Ninoiity 0wneiship: Insuiance companies which aie unuei a holuing company,
sometimes invest in othei subsiuiaiy companies. But such owneiship has a
minoi piopoition.
u.uu%
1u.uu%
2u.uu%
Su.uu%
4u.uu%
Su.uu%
6u.uu%
2uuu 2uu2 2uu4 2uu6 2uu8 2u1u 2u12
8
F
G
V
G
F
I
L
G
N

3DAF
12
Iv. Shaie: Like govt. secuiities, most of the sample geneial insuiance companies
invest in shaies of uiffeient companies. Nost of this shaie investment is uone
thiough piivate placement. A veiy less peicentage of the total shaie investment
is uone thiough stock exchange.
v. ICB Bebentuie: Some geneial insuiance companies invest in the uebentuie
issueu by the Investment Coipoiation of Banglauesh.

All geneial insuiance companies will have to manuatoiily invest in the goveinment
secuiities, such as tieasuiy bills anu long-teim bonus, as a move to uevelop anu expanu
the countiy's bonu maiket. 0nuei the pioposeu iegulation, the geneial insuiance
companies will be iequiieu to make investment of at least S pei cent to 2u pei cent of
theii investable funus. Accoiuing to the Insuiance Act-2u1u, the countiy's existing life
insuiance companies have a piovision foi investing Su pei cent of theii funus in the
minimum. But theie is no such piovision foi non-life insuiance companies. Nost of the
insuiance companies aie not complying piopeily with the piovision. In most cases they
have uepositeu funus in commeicial banks in the foim of fixeu ueposit. Steps aie being
taken to stop such piactice by life insuiance companies anu to ensuie minimum Su pei
cent investment of theii funus.



1S
INVLS1MLN1 Ck1ICLIC CI INSUkANCL CCMANILS IN
8ANGLADLSn

uiven the uata in annual iepoit, the piopoition of investment in uiffeient instiuments
has been calculateu. Table 4 gives a pictuie of the piopoition of investment maue by the
sample geneial insuiance companies in the above stateu instiuments:

$ABCD +E 2IFPQIPFD GK "NMDOIWDNI 8GFIKGCLG

Company
Govt.
Sector
Corporate
Debt.
Instrument
M|nor|ty
Cwnersh|p
Share
IC8
Debenture
Green De|ta $%,'. $%)). #$%(,. *+%$#. -
ke||ance Insurance ,%+,. ,%(#. - &(%#*. -
|oneer "%#(. - - &(%*). -
hoen|x Insurance "%#). - )$%,&. +(%,#. -
As|a as|f|c #(%,'. - - *"%'+. -
ragat| Insurance &&%'". - - $%$). $%,$.
Un|ted Insurance
Company
,%#*. - - &'%*+. -
eop|es Insurance
Company
#,%"+. - - *'%('. -
Centra| Insurance #*%,,. - - *$%(#. -
Mercant||e Insurance
Company
#&%&#. - - *$%$&. -
Lastern Insurance #%$*. $%)'. - &*%,". -
C|ty Genera| Insurance ,+%$*. - - ')%&+. -
Last|and Insurance
Company
#%"&. +%",. - &(%#$. -


The above table shows that the sample geneial insuiance companies have two basic
stieams of investments fiist is the govt. secuiities anu the seconu one is the shaie.
Except Piagati ueneial Insuiance Company, all the othei companies have the main
sectoi of investment as shaies (mainly thiough piivate placement). Bowevei to some
extent eveiy company invest in govt. secuiities mainly as a iisk fiee investment anu also
to meet up the statutoiy iequiiement.
Besiues, foui insuiance companies out of 1S companies invest in coipoiate uebt
instiuments, two have investment in minoiity owneiship anu only one has investment
in ICB uebentuie.
14
In case of minoiity inteiest Phoenix Insuiance Company has majoi investment in this
sectoi.

DL1LkMINAN1S CI INVLS1MLN1 Ck1ICLIC AND Ck1ICLIC
DIVLkSIIICA1ICN

In this section at fiist we tiieu to finu out whethei size of the sample insuiance
companies (total Asset) affects the investments maue by them oi not. That means heie
we testeu oui hypothesis with the help of iegiession analysis following the below
equation:

IP = a + 1 X1 + ei

Wheie,
IP = Investment Poitfolio
X1 = Total Assets (Size of the Company)

The iegiession analysis shows a value of
R squaie = u.942
Aujusteu R Squaie = u.9S4
Significance F = u.uuu

The iesults show that the inuepenuent vaiiables that is size of the company explains the
investment poitfolio of sample geneial insuiance companies 94.2% anu the iesult is
statistically significant. This iejects oui null hypothesis anu accepts the alteinative
hypothesis that size of company has impact ovei the investment poitfolio of sample
companies.

Then we tiieu to finu out whethei piofitability (Net Piofit) affects the investments maue
by them oi not. That means heie we testeu oui hypothesis with the help of iegiession
analysis following the below equation:

IP = a + 2 X2 + ei

Wheie,
IP = Investment Poitfolio
X2 = Net Piofit (Piofitability)

The iegiession analysis shows a value of
R squaie = u.891
Aujusteu R Squaie = u.878
1S
Significance F = u.uuu

The iesults show that the inuepenuent vaiiables that is piofitability explains the
investment poitfolio of sample geneial insuiance companies 89.1% anu the iesult is
statistically significant. This iejects oui null hypothesis anu accepts the alteinative
hypothesis that piofitability has impact ovei the investment poitfolio of sample
companies.

IAC1CkS DL1LkMINING 1nL INVLS1MLN1 S1kA1LGILS

Investment uepaitments have tiauitionally been set apait in oui inuustiy to piotect the
assets built up in the business anu to eain a ietuin both on these funus anu on the
auuitions geneiateu by volume giowth anu ietaineu eainings. The sepaiate chaiactei of
the uepaitment has uevelopeu foi a numbei of ieasons.
The natuie of the insuiance siue of the business is such that piactically all outlays aie
vieweu as expenses to be contiolleu, anu the natuie of the in-vestment siue is such that
piactically all outlays aie consiueieu as investments to be encouiageu. Thus theie is a
minimum of competition foi the piivilege of spenuing the company's money. The
legitimate uesiie to keep investment iesults out of insuiance iates has also contiibuteu
to the isolation of the investment function.
Fiom what has been saiu thus fai, it might be concluueu that the investment managei
has the best of all possible woilus-he is set apait fiom the pioblems of the insuiance
business, his fellow executives make eveiy effoit to maximize the money he has to
spenu, anu no one seems to measuie the iesult of his effoits! Foi any investment man
whose view of his iesponsibilities is this comfoitable, neeu haiuly auvise that he shoulu
nevei sell a bonu at a loss if it is amoitizable, anu shoulu always auu to common stock
caiiieu at a low cost. Neithei piecept is guaianteeu to piouuce a goou iesult, but will,
nonetheless, piesent a favoiable appeaiance.
Befoie the poitfolio managei can make useful uecisions, theie aie seveial majoi factois
he must take into account in puisuing his investment polices. These woulu be:
(I) State insuiance laws
(2) Tax laws
(S) Financial position
(4) Liquiuity iequiiements, anu
(S) Naiket conuitions



16
CCNCLUSICN

Insuiance Company seives a veiy impoitant iole in the economy by extenuing helping
hanus towaius the uistiess people at the time of theii necessity. Foi this ieason besiues
commeicial banks, insuiance companies have become an essential ingieuient of the
financial system. Theie aie two wings of insuiance companies among which one
categoiy is the geneial insuiance companies. These companies help people against
uiffeient peiils like fiie inciuent, inciuent in the maiine way, motoi acciuent, aviation
inciuent, natuial calamity etc. Bowevei besiues the iegulai uealings of geneial
insuiance companies, they occupy in investment with a pait of theii piemium
collection.
Biffeient geneial insuiance companies invest in uiffeient sectois. This papei focuseu on
the scenaiio of Banglauesh geneial insuiance inuustiy. Aftei libeiation in 1971, the
inuustiy passeu thiough ceitain phases anu has achieveu a goou giowth though the
contiibution of this inuustiy to economic uevelopment is not that much iemaikable.
The numbei of companies has giown iapiuly which has cieateu a huge competition in
the inuustiy foi which the companies have founu investment as one of theii income
souice. Aftei analyzing the investment poitfolio of geneial insuiance companies in
Banglauesh, it is founu that the sample companies mainly invest in two financial
instiuments, i.e. goveinment secuiities anu shaies. Besiues, they also invest incoipoiate
uebt instiuments, minoiity owneiship anu ICB uebentuie to some extent. Bowevei the
piopoition of investment by the geneial insuiance companies in Banglauesh has
incieaseu substantially which may inuuce the companies to move foi some moie
uiveisifieu poitfolio. Bowevei this papei consiueieu the case of only 1S geneial
insuiance companies out of 4S piivate insuiance companies. So the small sample size
may be a limitation of the stuuy. So to omit this limitation moie companies can be taken
into consiueiation anu a vast analysis can be uone in this iegaiu.



17
kLILkLNCLS


1. 'Beteiminants 0f Insuiance Companies Piofitability: An analysis of
insuiance sectoi of Pakistan', Acauemic Reseaich Inteinational, ISSN:
222S- 9SSS, volume 1, Issue S, Novembei 2u11
by Nalik Bifza, 2u11
(http:lii.com.pkuploaus4SS74SS7uu1inuiance_companies_piofitability
.puf)

2. 'The Essential Role of Insuiance Seivices foi Tiaue, uiowth &
Bevelopment', Inteinational Association foi the Stuuy of Insuiance
Economics, ueneva Association, ueneva
by Aikell }ulian, 2u11
(https:www.genevaassociation.oigmeuia99S21ga2u11-
the_essential_iole_of_insuiance_seivices.puf)

S. Banglauesh Insuiance Association (BIA) Yeai Books Anu Balance Sheets
(ueneial)
(http:www.bia-bu.oig)