North South UniversityMGT 210REPORT

ON

PRAGATI INSURANCE LIMITED

Submitted To : TasnimRezoanaTanim, Lecturer, North South University

Date of Submission:20/08/2013

Group:

Syed Nabil Kabir - 1220702043

Shomee Jonas Rozario– 1220718030

Farhan Almas Karim - 1230526630

Chowdhury Samiul Monowar- 13108946306

Md. Shawon Mostafa – 1230207030

Sumaiya Binte Mostak - 1310503620

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Table of contents

1. Introduction………………………………………………………..3

2. Company Information……………………………………………4

3. Business Details………………………………………………....5-11

a. Board of Directors………………………………………………..5-6

b. Type of Business……………………………………………………6

c. Share Capital……………………………………………………….6

d. Formation…..……………………………………………………….7

e. Vision and Mission Statement……………………………………7-8

f. Products and Services…………………………………………...8-10

g. Employees and Customers……………………………………..10-11

4. Managerial Analysis…………………………………………..12-17

a. 8 managerial Functions…………………………………………12-15

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b. Wilson’s 12 Managerial Skills……………………………………..15

c. Details on Wilson’s Managerial Skills…………………………16-17

d. Skills that are not followed in Pragati Insurance

Limited………17

5. Strengths and Weaknesses

6. Recommendations

7. References…………………………………………………....17

Introduction

Insurance is not a new business in Bangladesh. Almost a

century back, during British rule in India, some insurance

companies started transacting business, both life and general, in

Bengal. Insurance business gained momentum in East Pakistan

during 1947-1971, when 49 insurance companies transacted both

life and general insurance schemes.

The government of Bangladesh nationalized insurance industry

in 1972 by the Bangladesh Insurance (Nationalization) Order 1972.

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Through an ordinance passed in 1984 amending the Insurance Act

1938 and the rules under the Insurance Corporations Act 1973, the

initial entrants into the market, including Pragati Insurance

Limited (PIL), by the way of their .professional approach were

instrumental in bringing a change and gave the insurance sector a

decent shape and structure. However when subsequent insurance

companies entered into the market, the insurance sector found

itself saturated which caused unethical practices and relentless

competition.

Pragati, as being the first generation insurance company in

Bangladesh, realized the problems within the industry at the very

outset and were able to commission a very structured and

pragmatic base for managing the affairs of the company.

Company Information

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Pragati Insurance Limited was established in 1986. A group

of young entrepreneurs of Bangladesh who had earlier launched a

commercial Bank in the private sector sponsored the company with

30 million taka worth of capital. Sponsors included Shipping

Magnets, Engineers, Road Builders, Top Garment Exporters and

Importers.

Equipped with a team of experienced personnel, the company is

ever-ready to cater to all the insurance needs required by people

of Bangladesh thus providing protection to personal properties

and cover unfortunate casualties. Almost all the Multi-nationals

working in Bangladesh are in Pragati Insurance Company’s port-

folio and they provide them with international standard services.

The Company looks forward to reaching people through their

personalized services as well as through various media

communications. They are ensuring quality services at a

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competitive price and promises to be beside anyone as soon as

they need

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Business Details

Board of Directors

Abdul AwalMintoo - Chairman

Khan Mohd. Ameer – Vice Chairman

Mohammad A. Awwal - Director

Abdul Monem - Director

Al Haj KhalilurRahman - Director

Syed M. AltafHussain - Director

Md. SyedurRahmanMintoo - Director

Mohammed A. Malek - Director

Md. Sarwar Kamal - Director

TabithMohd. Awal - Director

A.S.M MohiuddinMonem - Director

TafsirMohd. Awal - Director

NigarJahanChowdhury - Director

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Md. MushfiqurRahman - Director

Mrs. NahreenSiddiqua - Director

NasirLatif - Director

AhmedulHoque - Director

A.K.M Shamsuddin – Independent Director

Md. Manirul Islam – Managing Director

Type of Business

Pragati Insurance Limited is a Public Limited Companies where

shares are bought by public and are freely transferred.

According to Public Limited Company properties:

1. Stockholders are the owners of the company

2. The stockholders come to a mutual agreement for electing the

Board of Directors

3. Management teams are divided into various categories which

include Top Management, Middle Management, and Supervisory

Management

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Share Capital

The Authorized Share Capital of the Company is20,00,00,000/-

(Twenty Crore) ordinary shares of Tk 10 each and Issued Share

Capital of 49,258,325 ordinary shares of Tk 10 each

Formation

The name of the Company is Pragati Insurance Limited.

Incorporation: January 27, 1986

Commencement: January 30, 1986

Listing with Dhaka Stock Exchange (DSE): April 04, 1996

Listing with Chittagong Stock Exchange (CSE): April 06, 1996

Registered Office:

Pragati Insurance Bhaban

20-21, Kawran Bazar

9

Dhaka- 1215, Bangladesh

Phone: PABX: 88-02-9133680-2

Fax: 880-2-8122980

www.pragatiinsurance.com

E-mail: info@pragatiinsurance.com

Mission and vision statement

Vision: Our vision is to be customer’s first choice when

selecting insurance products and services offered by the industry

and to operated by code of conduct driven by a value system that

promotes performance, integrity and personal growth in all

dealings with stakeholders and to maintain our leading edge in

the industry by striving to enhance financial strength and

profitability

Mission:Our mission is to provide innovative and cost effective

general insurance solutions to our clients and an acceptable

return to our shareholders through committed and professional

staff

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Products & Services

Pragati Insurance Limited provides a wide array of general

insurance services such as the followings:

Fire Insurance

Fire & Allied Perils Insurance

Motor Insurance

Comprehensive Insurance

Act Liability Insurance

Health & Accident Insurance

Overseas Mediclaim Insurance

Personal Accident Insurance

Peoples Personal Accident Insurance

Health Care & Hospitalization Insurance

Marine Insurance

Marine Cargo Insurance

Marine Hull Insurance

All Risk Insurance

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Insurance All Risk Insurance

Erection All Risk Insurance

Hotel All Risk Insurance

Machinery Breakdown Insurance

Electronic Equipment Insurance

Boiler & Pressure Vessels Insurance

Power Plant Insurance

Deterioration of Stock Insurance

Contractor’s All Risk Insurance

Aviation Insurance

General Aviation Insurance

Airline Insurance

Air Travel Insurance

Miscellaneous Insurance

Fidelity Guarantee Insurance

Public Liability Insurance

Products Liability Insurance

Burglary & Housebreaking Insurance

Cash-in-Counter Insurance

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Cash-in-Safe Insurance

Cash-in-Transit Insurance

Cash-in ATM Insurance

Cash-in BPM Insurance

Safe Deposit Box (Bank Lockers) Insurance

Credit Shield Insurance

SME Insurance

Tournament Insurance

Replacement of Lost Card/Fraud Insurance

Consequential Loss Insurance

Business Interruption Insurance

Workmen’s Compensation Insurance

Employees and Customers

Employees:Like most of the organizations, PIL wants its employees

to be energetic, visionary, and talented. Minimum qualification

for entry level is an undergraduate degree in the related field.

Job experience is preferable. After selection, the selected

candidates have to go through relevant information about the

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organizational activities which are shared with them as much as

possible. Plus, PIL puts high emphasis on working in a team

oriented environment. So entry level employees get a sense of

belonging in the organization also making them enthusiastic with

their career with PIL.

For the middle level jobs, a minimum of postgraduate degree in

related field is required. Experience plays a primary role for

middle and supervisory jobs. So either employees within the

organization are promoted or, if a new individual is given the

job, his/her prior job experience is taken into consideration In

the middle level, recognition for job performance serves as a

motivating factor.

Customers:PIL’s target market is relatively broad since they

cover a large portion of the insurance services. Their services

are acquired by various large organizations ranging from

multinational companies, manufacturing industries, aviation

companies who needs the services of fire insurance, marine cargo

insurance, general aviation industries,etcand many others while

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they also provide smaller services to the general public like

motor insurance.

Managerial Analysis

8 Managerial Functions

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On 18/08/2013, an interview by several group members was

conducted with Syed SehabUllah Al - Manjur (Assistant Managing

Director and Head of Underwriting) of Pragati Insurance Limited.

According to him the 8 managerial functions are carried out in

the company in the following ways:

Planning – The prime objective of the organization is to earn a

target amount of new insurance policies on an annual basis, at

the same time providing service to the current clients. The

target amount is set based on current market trends and

performance of the yester years. According to Mr. Manjur, any

insurance activities begin from his department as he is the head

of underwriting of all insurance policies where they accept risks

which are considered consumable in terms of the financial

capabilities. Another task carried out by Mr. Manjur’s department

is to make arrangements to achieve current goals and objectives

and planning in advance for any unforeseen occurrences as a

failure in one activity affects the whole chain of activities

involved in the whole process

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Decision Making – A number of factors, both internal and

external, influence the decision making in the organization. Mr.

Manjur says, he needs to check the support of re-insurers every

time he undertakes risk on behalf of his clients. This was one

internal factor. He believes external factors such as law is

based on ethics, so both goes hand in hand. As a result it is

mandatory for everyone to always take legal issues in

consideration while making a particular decision. Political

unrest is another issue that has to be taken into account as it

increases the risks in the type of business done by PIL. Even

after being aware of the risks involved, PIL considers it

mandatory to keep the customers satisfied

Organizing – All the objectives are set through meetings

consisting of senior management members of PIL. Objectives of the

meeting involve the following:

1. Review weekly performance of the company

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2. Track investment performance of the previous week and

provide guidelines

3. Generate new ideas through brainstorming in relation to

business development and improvement of operational

efficiencies

4. Discuss and resolve problems affecting two or more

departments/divisions

5. Improve coordination among various departments and members

of the staff

6. Review investment of company’s surplus fund and company

assets

Staffing – Mr. Manjur was very straightforward and honest with

his thinking about the fact that hiring procedures are not

exercised properly as many of the applicants come through

references from higher ups. But still Mr. Manjur and the

respective department for hiring employees prioritize the

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necessary qualifications, academic backgrounds, and experience

required for the job.

The hiring process starts from posting of circulars in

newspapers and jobsites. CV’s are gathered and sorted by the

recruiting team. Qualified applicants are called for written exam

out of which the recruiting process is further narrowed down into

a walk in interview with the senior management

Communicating– When it comes to communication PIL follows the two

ways of communication systems. For upward communication, PIL has

an open-door policy where employees of all level (entry and mid)

can contact directly with the manager regarding any problems they

face while working.

Motivating – When it comes to motivating employees, both the

elements of Herzberg’s two factor theory are present. Hygiene

factors such as salaries and bonuses along with motivators such

as achievement, recognition and responsibility are there too. Mr.

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Manjur personally believes in giving added responsibility to

employees to motivate them as it gives them a sense of

belongingness and not only that, it directly contributes to the

development of employees.Lunch breaks, tea breaks, and flexible

timing also help in contributing to day to day motivation of

employees.

Leading – Mr. Manjur has a democratic approach when it comes to

leadership. Decision makings are mostly team-oriented and on the

views of the employees, he takes the most appropriate decision.

Also during the interview, we observed that Mr. Manjur follows

values based and humane oriented leadership styles

Controlling –In PIL, the leaders have the tendency to convert

unfavorable outcome into favorable results at any circumstances.

This is the only way they see fit for their organization given

the fact that the environment is ever-changing and full of

uncertainties.

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Wilson’s 12 Managerial Skills

Based on the interview conducted with Syed SehabUllah Al - Manjur

(Assistant Managing Director and Head of Underwriting) of Pragati

Insurance Limited, the company follows the 10 of the 12 Wilson’s

managerial skills -

1. Technical Expertise

2. Clarification of Goals and Objectives

3. Problem Solving

4. Imagination and Creativity

5. Listening for Insights

6. Directing and Coaching

7. Solving Problems as Teams

8. Coordinating and Cooperating

9. Standards of Performance

10. Control of Details

Details on Wilson’s Managerial Skills

Technical Expertise

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The management uses their educational and past work experiences

to understand and communicate key technical details of the

organization. They also use their experiences in decision making

process.

Clarification of Goals and Objectives

Top level management draws blue prints of the tasks required to

reach the goals and objectives for the whole organization. These

tasks are then assigned to the middle level managers whose job is

to fulfill the tasks through the employees under their control.

Middle level managers are held accountable for most of the

objectives carried out in PIL.

Problem Solving

Employees can contact the manager in terms of any issues related

to work.Management solves each and every problemto develop team

collaboration.Thus making their operations smoother and flexible

and leaving no room for any lags.

Imagination and Creativity

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In PIL, carrying out daily tasks involve a constant need to think

out of the box to suit the varied types of problems faced every

day. It is the task of management to push employees with their

out of the box thinking to ensure productivity on a daily basis.

The management gives assignments to the employees to ensure

creativity.

Listening for Insights

Management closely observes and supervises the employees making

sure that their performance in up to the mark.

Directing and Coaching

Though there is no formal training after the selection of

employees, the management ensures that the skill level of the

employees develop as they work along.

Solving Problems as Teams

Management of PIL encourages employees to bring their ideas and

helps them to generate their ideas as well.

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Coordinating and Cooperating:

The day to day work in PIL requires a lot of coordination between

peers and cooperation at all levels of the organization to ensure

smooth operations.

Standards of Performance

Management keeps pushing themselves to the extreme level to keep

their standards of performance.

Controls of Details

Management over sees the performance of the employees at a close

level to ensure work-standard and objectives.

Skills that are not followed in Pragati Insurance

Limited

1. Energy- A lack of readiness in work was observed in between

the managers which can greatly hamper the cooperation needed

in between the colleagues, as a result decreasing efficiency

of the organization as a whole.

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2. Exerting pressure – Although PIL can stretch their targets

both efficiently and effectively but it never happens as the

managers in PIL do not believe in pressurizing their

employees to reach targets.

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Strengths and Weaknesses

Strengths

1. Proactive approach

Senior management embraces and communicates in a proactive

approach to assessing risk within the organization.

2. Innovation

The management of Pragati Insurance Limited Company believes in

innovative, out of the box thinking so the employees are

encouraged to generate new ideas.Management frequently gives out

difficult assignments which require them be out of their comfort

zone whichflexes their tendency to think creative.

3. Employee support

In the decision making process the management gives certain

powers to all level employees in order to gain employee support

in terms of achieving objectives. Employees feel a sense of

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belonging and it motivates them to give best effort. It also

increases their commitment to the company.

4. Team effort

The management believes in team effort rather than individual

effort. So the work is done more efficiently by the employees

working in a team. A team effort enables the company to reach its

objectives most effectively as well as efficiently.

5. Financial Capacity

The financial status of PIL is very good comparing to the other

life insurance companies in Bangladesh. So this insures a client

to depend on this company rather any other company.

Weaknesses

1. Vague accountability

Accountability of the management for managing risks is not

clearly defined. They should mention their accountability in the

company so that employees and clients can rely on them.

2. Lacking in term policy

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The Pragati Insurance Limited has some lacking in their term

policies which confuses the clients.

3. No formal training

The management does not give the new employees any kind of formal

training. They give informal training which cannot help the

employees to be more productive.

4. Reinsurance

The company largely depends on reinsurance which can sometimes

cost them extra risk because reinsurer may have a greater risk

appetite than the insurer.

5. Biased recruitment process

PIL prefer references while hiring employees rather than

qualifications.

6. Escalation of Commitment

PIL has a tendency to follow one size fit all approach when it

come to the controlling function which results in an Escalation

of Commitment.

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Recommendations

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Accountability of the management of PIL in terms of managing risk

should be specific.

The management should provide some sort of formal training to

improve the performance of their employees.

They should have all the information regarding the reinsurer’s

company so they can avoid extra risk and premium.

Another big weakness they have is their term policy they should

differentiate between temporary and permanent term policy so that

clients can choose the best policy for them.

Conclusion

Pragati Insurance Limited is one of the largest

insurancecompanies in Bangladesh. It has grown over the years and

has helped to absorb the risks for many organizations both local

and multinational in numerous sectors. We thank our honorable

teacher TasnimRezoanaTanim for assigning us to the field work

which gave us the opportunity to work with such a company. The

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people who we interviewed were very enthusiastic in helping us

with this project which greatly contributed to the fulfillment of

this project. Most importantly this assignment has greatly

contributed to our learning as it has given us the opportunity to

apply our education in a more practical approach

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Reference List

Banglapedia. (n.d) Bangladesh Insurance Company .[Online] Available

From http://www.bankersbd.com/bangladesh-insurance-company.html

[Accessed 15th August 2013]

Akram, Md. (2010) Rule Book: Pragati Insurance Limited

Akram, Md. (2012) Annual Report 2012: Pragati Insurance Limited

Cassidy, C.M. and Kreitner, R. (2011) Principles of

Management.12th ed. South-Western, Cengage Learning.

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www. businessdictionary .com/

http://www.investorwords.com/

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