Islamic Insurance in Bangladesh free essay sample

This report has been undertaken as a part of our course F-501 (Management of Financial Institutions) under the MBA program. Our course instructor M. Jahangir Alam Chowdhury has assigned us this assignment so to gain some practical knowledge about Islamic Insurance. This really provides us the opportunity to explore and confront the reality about Islamic insurance in Bangladesh. Objective of the study Usually we gather theoretical knowledge from course material. But it is also very much important to relate that theoretical knowledge with practical situation. The basic objective of conducting this report is to apply our theoretical knowledge in practical situation. The objective behind conducting this study is as follows: †¢To present an overview of Islamic insurance in world in Bangladesh †¢To present the concept of Islamic insurance and its difference general insurance. †¢To present a current scenario of Islamic insurance in Bangladesh with a practical reference of Takaful Islami insurance Limited. We will write a custom essay sample on Islamic Insurance in Bangladesh or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page †¢To show the future challenge and contribution of Islamic insurance in Bangladesh. Scope of the study Here, we will be able to the actual scenario of insurance sector in Bangladesh and in world.We have gone through the Islamic insurance in Bangladesh thoroughly, analyzed the present condition in insurance sector and make a short mechanism of Islamic insurance that means their way of service, risk handling technique and financial position of Takaful Islami insurance limited. Methodology of the Report All the data used in this report have been gathered from the secondary sources. We have collected information of Islamic insurance from different websites from both Bangladesh and foreign sites to make the theory clear to understand easily. Limitations of the studyDespite the diligent efforts given in preparing the report, it succeeded only to skim through the surface of the ocean on this subject. Therefore the views expressed in this report are likely to be restricted by limitations. A number of limitations are associated while preparing the report. They are summarized below – Time Constraint: The duration of the study was only three months. So it was not possible to reflect all activities in the report in such a short period of time. Unavailability of data: Some vital information would have made this report more fruitful. But as those data were confidential in nature, it was not provided by the authority. Chapter-02 An Overview of Insurance industry (Global Bangladesh) Executive Summary As a requirement of MBA program from Department of Finance, University of Dhaka, we have prepared our report as a course material of MBA Course no: 501 (Management of Financial Institutions) with the objective of evaluating Islamic Insurance in Bangladesh with a special reference of Takaful Islami Insurance Limited. 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. Islamic insurance (Takaful) means the act of group of people reciprocally granting each commercial profit sharing contract between the providers of funds for a business vent ure and the entrepreneurs who actually conduct the business.An Islamic insurance company transacts business on a co-operative basis in accordance with and subject to the principle of Islamic Shariah. All the functions of conventional insurance companies, i. e. underwriting, claims, reinsurance, marketing, investment, company management, etc. of Islamic Insurance Company should fully conform to Islamic Shariah Code. At the same time, the Islamic insurance companies should also make the scope and benefits of insurance coverage traditionally provided by the conventional companies available.Islamic insurance companies have developed extensive facilities to transact all classes of general insurance such as life, marine, fire, motor, accident, aviation, engineering, etc. Islamic Takaful Islami Insurance Limited was established in 2002. A group of Businessmen who had earlier launched an Islami Bank in the private sector sponsored the company with 60 million taka capital. Clients service and prompt settlement of claims are the key to the success and growth of the company. Claims are settled immediately on completion of the required formalities by the insured and the surveyors.Companys portfolio is adequately reinsured both at home and abroad. Fire and allied risks are covered by surplus tsreaties and facultatively, Marine Cargo risks are also covered by surplus treaties and facultatively, Motor risks are covered by 1st layer XL treaties. Engineering and Misc. risks are covered by surplus treaties and facultatively. The company has also cover for fire and marine cargo own retained portfolio. Takaful Islami Insurance Limited has seen their bottom line shrink from $59. 6M to $41. 1M despite an increase in revenues from $148. 6M to $163. 9M.