Marine Insurance of Pioneer insurance company ltd.

1. 1
Introduction to Insurance:
We read our daily newspapers stories about people being involved in road accidents, of aero
planes crashing, buildings burning down, theft of goods, peoples being injured at work and many
other mishaps. Behind each story lies a measure of Personal tragedy and anxiety for those closely
involved. Yet behind each one is also the vast, sophisticated mechanism of Insurance.
From an individual point of view, insurance is an economic device whereby the individual
substitutes a small certain cost (the premium) for a large uncertain financial loss (the risk insured
against) which would exist if it were not for the insurance Contract.
The primary function of insurance is the creation of the counterpart of risk. Which is security?
Insurance does not take away the risk. The insurer does not guarantee that the event insured
against will not happen. Whatever good the management and staff, losses do occur. The
“Titanic” was unsinkable and yet was lost in the very first voyage. Plants can be operatedfor
many years without accident and then be totally destroyed by Fire. The house may still burn
down, the car may still beinvolved in an accident but at least a large element of the cost involved
will be met by the insurer.
History to Establish in Insurance Company:
General Insurance in Bangladesh:
Before the independence 49 insurance companies were functioning most of those were owned by
either Pakistanis or by other foreign nationals. After the independence of Bangladesh
Government nationalized all the insurance business which were operating in Bangladesh, mostly
owned by West Pakistanis and formed the subsidiary corporation‟s one for General Insurance
and other for Life insurance business under the controlling corporation the Bangladesh
JatiyaBima Corporation.
Later in 1973, SadharanBima Corporation was formed for transacting all General Insurance
business and JibanBima Corporation for Life Insurance business.
To bring efficiency into the sector and to provide quick services with better customer
care, Government passed a law in1984 allowing the formation of Private General
Insurance Companies.
SadharanBima Corporation was given the monopoly to underwrite the business of public
and private sector both. MoreoverRe-insurance of Private sector companies was made
mandatory with SadharanBima Corporation.
The Premium rates in Bangladesh are not yet opened up and are based on Tariffs
prepared by the Central RatingCommittee headed by the controller of insurance,
Government of People‟s Republic Bangladesh. All are bound to follow the Tariffs.

2. 2
Effective Insurance Legislation in Bangladesh:
2
 THE INSURANCE (AMENDMENT) ORDINANCE, 1984 (Ordinance No. L of 1984)
The Government of the People‟s Republic of Bangladesh allowed Private Insurance
Companies to operate on 11August, 1984.
 THE INSURANCE CORPORATIONS (AMENDMENT) Act, 1990
 50% Public Sector Business was allowed and distributed to Private Insurance
Companies by SBC with effectfrom 13 February, 1990.
 Private Companies were allowed to do 50% reinsurance with SBC and 50%
outside SBC with effect from 13th
February, 1990.
 Payment of Commission to the Agents prohibited from 13 February 1990.
 THE INSURANCE (AMENDMENT) Act, 1993
Payment of Commission to the Agents as per Insurance Act, 1938 reintroduced from 14
March 1993.
Pioneer Insurance Company profile:
Pioneer Insurance Company Limited, sponsored & founded in 1996, is a publicly traded
company by shares having authorized capital of Tk. 1 (One) Billion & paid up capital of Tk.
353.44 million. The Company is enlisted with Dhaka Stock Exchange and Chittagong Stock
Exchange and has been declaring dividend every year since inception. The Company has been
assigned “AA” by Credit Rating Information and Services Limited of Bangladesh. AA rating
stands for “very high claims paying ability. Protection factors are strong. Risk is modest, but may
vary slightly over time due to underwriting and/or economic conditions.
Current Chairman Mr. TapanChowdhury, Managing Director, Square Group & Ex-Adviser of
the Care Taker Government of People‟s Republic of Bangladesh, former Chairman Mr. M
AnisUdDowla, Chairman, ACI Limited, former Chairman Mr. Syed ManzurElahi, Chairman
Apex Group & Ex-Adviser of two Care Taker Governments of People‟s Republic of Bangladesh,
former Chairman Mr. A.K.M. Rahmatullah, Member of the Parliament & Managing Director of
Apex Tannery Ltd. are the most successful business entrepreneurs of the country.
The company has a good number of dedicated and highly professional employees supported by
qualified, experienced & technically sound executives. The Managing Director of the company,
Mr. Q.A.F.M. Serajul Islam who is a holder of Diploma in General Insurance from Bangladesh
Insurance Academy, has long experience in Insurance and Reinsurance. Prior to joining the
Company he was Deputy Managing Director of Pragati Insurance Ltd. and Deputy General
Manager of SadharanBima Corporation.

3. 3
COMPANY AT A GLANCE:
Established 1996
Registered Head Office Symphony(5th
Floor),
Plot # SE(F), 9 Road # 142, South Avenue, Gulshan-1,
Dhaka-1212,Bangladesh.
Tel:8817512(Hunting),8816561
Fax:+88-02-8817234,8817264
Email: piclho@pioneerinsurance.com.bd, piclho@gmail.com
Number of Branches 35
Number of Employees 460
Authorized Capital 1 (One) Billion (Taka)
Paid up Capital
353.44 million (Taka)
INVESTMENT:
Investment Figures in Million (TK)
Statutory Deposit with Bangladesh Bank 9.00
Fixed Deposit with Scheduled Bank 768.67
Share of Mutual Trust Bank Ltd.
On pre IPO (40,00,000 shares)
50.00
Share of Mutual Trust Bank Ltd.
from secondary (9,00,000 shares)
33.26
Bonus Share of MTBL (89,12,990 shares)
Right Share of MTBL (19,26,950 shares) 19.27
Share of Central Depository Bangladesh Limited
( 4,56,945 shares)
2.56
Share of EXIM Bank Ltd. 0.01
Grameenphone (573,100 shares) 42.41
Malek Spinning Mills Ltd. (10,00,000shares) 25.00
18 Nos.General Insurance Co. (4,900 shares) 0.11
Secondary share 10.00
Grand Total (Taka) 960.29

4. 4
FIXED ASSET:
Description Taka
Furniture & Fixture 4,240,643.00
Office Machinery 1,358,637.00
Air Conditioner 4,060,321.00
Computer 2,904,728.00
Telephone Installation 757,345.00
Electric Equipment 888,476.00
Others 19,007,926.00
Office Space: -------
7,375,661.00
01. V.I.P. Road Branch 7,375,661.00
City Heart, 9th floor,
67 NayaPaltan, Dhaka-1000
02. Imamagonj Branch 1,03,40,000
Tajmahal Tower (3rd
Floor)
66 Moulvibazar ,Dhaka-1100
03. Moghbazar Branch
Gulfesha Plaza (4th floor),
69 Outer Circular Road,
Near MoghbazarChourasta, Dhaka -1217
10,593,440
Total Amount 61,527,177.00
7

5. 5
Year Figures in Million (TK) Growth(%)
1996 23.14
1997 85.47 269%
1998 105.33 23%
1999 131.99 25%
2000 141.48 7%
2001 144.58 2%
2002 136.27 -6%
2003 147.09 8%
2004 178.34 21%
2005 245.41 38%
2006 301.16 23%
2007 385.20 28%
2008 665.50 73%
2009 859.45 29%
2010 1252.37 46%
2011 1598.60 28%
Grand Total 6401.41
PREMIUM INCOME:

6. 6
CLAIMS PAYMENT:
Claims statement as at September, 2012
Figure in BDT
2007 2008 2009 2010 2011 2012
Fire 111,974,255 3,49,61,666 147,981,702 164,442,032 136,772,711 23,430,076
Marine 36,141,341 12,445,126 16,960,608 27,111,402 42,663,217 13,086,232
Motor 29,135,180 52,769,964 48,109,616 60,264,260 50,504,834 11,877,135
Misc. &
Accident 6,213,021 3,297,437 3,306,366 15,546,843 16,236,689 418,746
Total Tk.= 183,463,797 103,474,193 216,358,292 267,364,537 246,177,451 48,812,189
Total No. of
Claims
Settled
379 634 709 861 757 202
Claims
Outstanding Nil Nil Nil 6 163 124

7. 7
Largest Claims Settled.
SI No. Class of Loss Name of Insured Year Settled Amount
(TK)
1 Fire Asia Composite
Mills Ltd.
2012 14,34,84,512
2 Fire Martin Spinning
Mills Ltd.
2010 92,944,709
3 Fire Square Consumer
Products Ltd.
2007 75,172,582
4 Fire Vidyut
Bangladesh (pvt.)
ltd.
2010
75,172,582
5 Fire Apex Footwear
ltd.
2002 46,817,019
6 Fire Sun Gravures ltd. 2008 45,597,518
7 Fire Pioneer Apparels
ltd.
2009 40,409,331
8 Marine Cargo GBB Power Ltd. 2010 26,817,138
9 Fire(Flood) Dia-Ichi-
PexLeather
Industries Ltd
2005 10,894,774
10 Marine Cargo Square
Pharmaceuticals
Ltd
2003
9,963,650
11 Marine Cargo Shahjalal
Newsprint Ind.
Ltd.
2000
7,970,196
12 Fire BRAC Bank Ltd. 2009 6,289,832
13 Fire ACI Ltd. 2012 5,04,80,170
14 Marine Hull Bashundhara
Logistics Ltd.
2012 1,00,00,000
15 Fire Lipstic Ltd. 2012 2,13,66,907

8. 8
We Adjusted:
Bangladeshi Banks :
Sonali Bank Ltd.
Janata Bank Ltd.
Agrani Bank Ltd.
Rupali Bank Ltd.
Bangladesh Development Bank
Bangladesh Krishi Bank &
Bangladesh ShilpaRinSangstha
Arab Bangladesh Bank Ltd.
Al-ArafahIslami Bank Bangladesh Ltd.
Bangladesh Commerce Bank Ltd.
BASIC Bank Ltd.
BRAC Bank Ltd.
Bank Asia Ltd.
Dutch Bangla Bank Ltd.
Dhaka Bank Ltd.
Eastern Bank Ltd.
Exim Bank Ltd.
I.F.I.C. Bank Ltd.
ICB Islami Bank Ltd.
Islami Bank Bangladesh Ltd.
Mutual Trust Bank Ltd.
Mercantile Bank Ltd.
National Bank Ltd.
National Credit & Commerce Bank
One Bank Ltd.
Prime Bank Ltd.
Pubali Bank Ltd.
Premier Bank Ltd.
RajshahiKrishiUnnayan Bank
Social Islami Bank Ltd.
South East Bank Ltd.
Foreign Bank:
Commercial Bank of Ceylone
Citibank N.A.
Hong Kong & Shanghai Banking Corporation Ltd.
Standard Chartered Bank
Habib Bank Ltd.
National Bank of Pakistan
State Bank of India

9. 9
Various Insurance & policy of Pioneer insurance company:
Fire :
Fire and Allied Perils Insurance
Consequential Lossmaterial
Damage by Fire or Allied Perils.
Household Insurance
Hotel Owners All Risks Insurance
Industrial All Risks Insurance
Marine:
Cargo Insurance
Hull Insurance
Motor:
Act Only Liability Insurance
Comprehensive Insurance
Increased Liability Insurance
Engineering:
Boiler and pressure Vessels Insurance
Contractor‟s All Risks Insurance (CAR)
Contractor‟s Plant & Machinery Insurance (CPM)
Deterioration of Stock Insurance (DOS)
Electronic Equipment Insurance (EEI)
Energy Risks Insurance (Offshore & Onshore)
Erection All Risks Insurance (EAR)
Lift, Escalator and Hoisting Equipment Insurance
Machinery Insurance (MB)
Machinery Loss of profit Insurance
Power Plant Package Insurance
Aviation Insurance:
Deductible Insurance
Hull Insurance
Liability Insurance
WAR Insurance

10. 10
Miscellaneous Insurance:
All Risks Insurance
Abandonment of Cricket MatchInsurance
Air Travel Insurance
Burglary Insurance
Cash / Property in Premises
Comprehensive General LiabilityInsurance
Cellular Mobile Phone Insurance
Credit Card Holder Insurance
Directors and Officers Liability Insurance
Employer‟s Liability Insurance
Fidelity Guarantee Insurance
Group Hospitalization
Hole in One Golf Tournament Insurance
Money / Cash in Transit Insurance
Neon Sign Insurance
Overseas Medicaid Insurance
Public Liability Insurance
Professional Indemnity Insurance
Personal Accident Insurance
People‟s Personal Accident Insurance
Plate Glass Insurance
Poultry Insurance
Rubber Plantation Insurance
Safe Deposit box (Bank Lockers)
MARINE Insurance
Marine insurance contract is a contract between Insured and Insurer where the Insurer undertakes
to indemnity the insured in a manner and the interest there by agreed against marine losses
incident to a marine adventure.
There are two types of Marine Insurance in Pioneer Insurance Company Ltd.
Marine Hull Insurance
This cover is available for ocean going vessels, barges, tugs, dredgers, fishing trawlers, yachts,
wooden dhows, pleasure/speed boats etc., under Institute Time Clauses Hulls. Cover is also
provided for last breakup voyages to Chittagong.

11. 11
Marine Cargo Insurance:
An all-risk cargo insurance policy is the broadest form of shipping insurance and will cover any
physical loss/damage from any external cause. An all-risk policy will list any exclusions that are
not covered, which can be added on to the policy as an additional clause. An annual open cargo
policy automatically insures your shipments on set terms, conditions and rate without the need to
contact your insurance broker or company each time.
Marine Cargo insurance protects all goods while in transit depending upon the needs of the
client. For sea and air transits, the "Institute" Clauses, drafted by the Technical and Clauses
Committee of the Institute of London Underwriters are adopted for use in Bangladesh. Three
broad types of cover are available for sea transit-
Institute Cargo Clauses "A", "B" & "C"
Two types of cover are available for air transit
Institute Cargo Clauses, Air &, Air All Risks.
RATE-MAKING IN MARINE INSURANCE:
Cargo Insurance Rates:
The Premium on cargo depends upon the following factors
Ownership: The kinds of cargo, carried on the same ship & to the same place will
command different rates. Proper packing, profitable accounts & previous refusal of
insurance may be determining the rate.
Character of the cargo: The difference in hazard between various kinds of commodities,
different forms of the same commodity, different shipments, and different types of
packing & durability of the commodity may influence the premium rates.
Hazards & customs: The effects of seasons have important bearing commodities that are
seriously affected by cold & heat. The season at the port of destination may influence the
risk. In certain season the port is very busy with a particular cargo. Varying trade customs
associated with the different commercial routes will influence cargo rates materially. The
moral hazard is greater on certain routes.
Duration of voyage & policy condition: Insurers take into account the length of time.
Sometimes, loading of the goods aboard the vessels & protection of the goods while on
the dock are considered in calculation of premium.

12. 12
Hull Insurance:
Management: one management may be efficient in the upkeep of the vessel and the
appointment of officers and crew. Other management, through negligence, indifference
and undue economy, may show a mad record. To treat these managements alike would be
an injustice to the better managed concerns.
Natural Forces and Topography: some natural hazards are permanent while others are
of seasonal danger. References are made to storms, submerged shoals, shifting sand bars,
shallow water narrow channels, ice, currents, tides and seaquakes while calculating the
premiums to a particular route. Dangers form an underwriting points of view is associated
with the ports of departure, call or destinations.
Constructions, Type and Nationality of the Vessel: The underwriter wants to know the
vessel with respects to its builder and owner, structural plan, material used in
construction, type of populations, structural strength to resists stresses and strains,
adaptability to carry various kinds of cargo and its age and physical conditions. In foreign
countries, certain societies are formulated to promulgate rule for the constructions of
vessels supervising such construction and assigning a class each vessel.
Policy Conditions: Innumerable clauses are used to limit increase the under water‟s liability.
Some policies may cover against total loss. Some may cover partial losses. Other may relate only
to general average or particular average.
Return of premium:
 By agreement in the policy: The assured may pay full payment while affecting the insurance.
The insurer may agree to return it wholly or partly at the happing of a certain event. The premium
is returnable by agreement in the following circumstances:
Improvement in the character of insurance, Change of ship to safer routes, use of first class liner,
good packing etc.
The insurer may encourage returning a part of the premium if claims do not arise.
Cancellation of policy due to change in the ownership of hull.
 For Reasons of Equity: The premium is returnable for reasons of equity.
Non-attachment
Undeclared balance of an open policy is entitled for return of premium.
When the assured has no insurable interest throughout the life of the policy the premium is
returnable provided the policy does not amount to fraud.
The insurer can cancel the voyage when there is insurable delay in commencing the voyage.
The policies are taken at different times, and any earlier policy has at any time the entire risk
or if a claim has been paid on the policy in respect of the full sum insured, on premium is
returnable in respectable of policy.

13. 13
Valuation by services:
The valuation by services removes the defects of memorandum clause which is used to free
certain commodities from particular average and in the case of other commodities the damage
has to amount to at least 5% to become recoverable. Specifically the provisions are:
Corn, fish, fruit flour & seed etc are warranted free from particular average unless the
ship be standard
Sugar, tobacco, hemp flax, hides & skin s etc are warranted free from particular average
unless the ship is standard unless amounting to 5%.
All the other goods etc are warranted free from particular average unless the ship is
standard unless amounting to 3%.
Documents require for claim:
The following documents are required at the time of claim:
Policy or certificate of insurance.
Bill of lading. It determines the scope of the contract of carriage.
Invoice or bill stating terms and conditions of sale.
Copy of protest: In the event of stranding of or accident to the vessel, the master of the
ship notes „protest‟ before a counselor notary public. The protest states that everything
was done to bring to safety the ship and cargo and loss or damage was not to lack of
diligence on the part of the master or crew.
Certificate of Survey: This is necessary to find out whether the necessary franchise is
reached or not in case of particular average.
Account sales or Bill of sale: Similar documents where goods have been sold. The
difference between gross sound value and proceed as per account sales might be accepted
as amount of loss.
Letter of subrogation: It gives the underwriters to sue and recover compensation from
third parties where the same is due.

14. 14
Documents in Different types of claims:
Total loss:
Insurance policy: It finishes an evidence of the terms & contract of insurance.
Bill of Lading: It is the correspondence of the insurance contract with the voyage and vessel.
Copy of the invoice: A copy of the invoice relating to the goods insured should be sent. It will
help in estimating the correct value of the goods.
Protest: A copy of protest is required when the total loss is due to the loss of the vessel or other
accident.
Letter of subrogation: A letter of subrogation is sent if anything‟s remains of the subject matter
insured after the total loss or if there are rights or reminders regarding the interest or against third
parties.
Notice of Abandonment: There is a constructive total loss.
Partial loss:
In case of partial average loss:
The policy or the certificate.
The invoice for whole shipment
The bill of lading should be sent to the underwriters
The copy of the master‟s protest or an extract from log book of the ship is to be presented
with the policy if the particular average is recoverable in certain circumstances according
to the term of policy.
A surveyor‟s report prepared by some recognized surveyor should be appended to the
above documents when evidence is necessary to show that the settled franchise has
reached.
When there is a sale of the damaged goods the bill of sale is required by the measured.
The letter of subrogation should be duty finished by the insured if required by the
insurers.
The cost of protection is paid by the underwriters apart from the particular average if
there was a successful claim. In unsuccessful claims, insurers are not liable to pay these
charges.

15. 15
The Information which mentioned in the marine insurance policy is:
Name of insured
Subject matter of insurance
Insured amount
Premium
Name of vessel
Identity of vessel captain & crew
Time duration of voyage
Signature of both parties
Condition for Marine insurance Policy for Policy Member:
There are two types of condition
1. Express Condition
2. Implied Condition
 Express Condition (Which is known by policy holder):
Time duration of voyage
Defense group
Impartiality of voyage
 Implied Condition (Which is Assume by policy holder):
Seaworthiness of ship
Legality of voyage purpose
Voyage without delay
No change in Voyage
Time duration of marine insurance policy:
This insurance for just “At &From the Port”, “From the Port”.
The limitations of Marine insurance policy:

16. 16
Mission & Vision of pioneer insurance company ltd:
Pioneer’sMission:
To become the leading insurance company of Bangladesh excelling in every aspect of its
business and in delivering its obligations as a good corporate citizen to its clients, employees,
shareholders, public and to the country.
Caring for you, forever
We Strive for
Best Service to our Clients.
Protection of Investment of Shareholders
Welfare of our Employees
Ethical and moral social order.
Transparency in Disclosures.
Good governance for us & all around us.
Pioneer’s Vision:
To Foster the industrial & Economic growth of Bangladesh.
To optimize the retention of Bangladesh business.
To work towards minimization of losses and develop Risk Management Technologies.
To function as a strong and dynamic non-life insurer.
Reference:
1. Book: Insurance Principles And Practice by M.N. Mishra & S.B. Mishra
2. Tarikur Rahman, A.M.D., Pioneer insurance Company Ltd.
3. www.pioneerinsurance.com.bd