Insurance companies used for financial ratio analysis for the years of 2008-2012 are:
- Padma Islami Life Insurance
- Pragati Life Insurance
- Sun Life Insurance
Introduction:
Various types of financial institutions exist in the economy of Bangladesh. Among these types insurance companies play a major role in our economy. These companies contribute a lot in the economy by diversifying risk among many people. There are two types of insurance companies- general insurance companies and life insurance companies. The subject matter of this report is to analyze the performance of the life insurance companies of Bangladesh. Life insurance companies bear the risk of peoples’ lives. The three company’s performance has been analyzed by calculating various ratios for five years. The necessary information for this ratio analysis has been collected from their respective annual reports.
Background information of the
companies
1. Padma Islami Life Insurance:
Corporate Status
The Company was incorporated on
26th April 2000 under the Companies Act 1994 as a public company limited by
shares for carrying out life insurance business and was granted Certificate of
Commencement of business on 26th April 2000. The Company obtained the
Certificate of Registration from the Chief Controller of Insurance, Insurance
department on 30th April 2000 with an authorized capital of Tk 100,000,000
(Taka one hundred million only) consisting of 1,000,000 ordinary shares of Tk
100 each of which the sponsors/subscribers contributed to the paid-up capital
of Tk 30,000,000 (Taka thirty million only). In fulfillment of the condition of
the Insurance Act 2010 the Company has increased the authorized capital to Tk.
1,000,000,000 (Taka one billion only) consisting of 10,000,000 ordinary shares
of Tk 100 each and the sponsors/subscribers have already contributed to the
paid-up capital of Tk 180,000,000 (Taka one hundred eighty million only)
including the previous Tk. 30,000,000 (Taka thirty million only) and now the
Company proposes to raise the paid-up capital to Tk. 300,000,000 (Taka three
hundred million only) by issuing 1,200,000 ordinary shares of Tk. 100 each at
an issue price of Tk. 300 each including a premium of Tk. 200 per share by way
of initial public offering (IPO). The company is engaged in life insurance
business and has no subsidiary.
The information in respect of its
business operation: Since its establishment on 26th April 2000 the company has
within a short span of time established itself as one of the most reputed and
trustworthy Islami life insurance companies in private sector of the country.
Selective customer service, underwriting of liabilities and prompt settlement
of claims have contributed towards building up a very respectable image of the
company within the business community.
Brief Overview of the Company:
|
||
1.
|
Date of Incorporation
|
: April 26, 2000
|
2.
|
Commencement of
Business
|
: April 26, 2000
|
3.
|
Authorized Capital
|
: Tk. 1000.00 million
|
4.
|
Pre-IPO Paid up Capital
|
: Tk. 180.00 million
|
5.
|
IPO size
|
: Tk. 120 million
|
6.
|
Post IPO Paid up Capital
|
: Tk. 300 million
|
Principal product /services
a) Prokalpa:
|
b) Product:
|
Individual Life
|
Convertible Endowment Assurance
|
Micro Insurance
|
Endowment Assurance
|
Anticipated Endowment Assurance-3 Stage
|
|
Anticipated Endowment Assurance-4 Stage
|
|
Child Protection Assurance
|
|
Hajj/Omrah Assurance
|
|
Marriage/Mohrana Assurance
|
|
Biennial Assurance
|
|
Anticipate Endowment Assurance-5 Stage
|
|
Pension Assurance
|
|
Group Insurance
|
|
Deposit pension Scheme
|
|
Premium Refund Term Assurance
|
2. Pragati Life Insurance:
“Pragati Life Insurance Limited”
was established on January 30, 2000 as a public limited company under the
Companies Act, 1994 with the philosophy of maintaining competitiveness,
balanced with prudent management and fairness to all policyholders. The company
obtained registration from the Department of Insurance on April 11, 2000 under
the Insurance Act, 1938 to carry out insurance business. The Company started
with a paid up capital of Tk.30 million against an authorized capital of Tk.
250 million. Now the present paid up capital stands to Tk. 94.8million.Pragati
Life has been sponsored by some renowned business entrepreneurs of the country
linked with different industrial groups. The company went for public issue in
2005 and it is listed in both Dhaka stock Exchange Limited and Chittagong Stock
Exchange Limited. Pragati Life, in the process of materializing its vision, has
been developing new customer oriented and innovative products developed by its
own Actuarial Department. Pragati Life has re-insurance agreement with world's
largest reinsurer-Munich Reinsurance Company, Germany since its inception.
Pragati Life is also the first insurance company in Bangladesh providing status
of policies through Push-Pull (SMS) service for its policyholders. Policyholders
of the company can also know their policy details from anywhere in the world
from its website.
Corporate Milestone
Registration as a Joint Stock Company
|
January
30.2000
|
Commencement of Business
|
April
11,2000
|
Signing of contract with the world’s largest re-insurer
Munich Re, Germany for reinsurance coverage
|
April
17,2000
|
Signing of first policy
|
May
03,2000
|
Inauguration of official website
|
July
01,2001
|
Appointment of Issue Manager
|
December
22,2004
|
Agreement with CDBL
|
September25,2005
|
Consent to issue IPO shares
|
October
16,2005
|
Publication of Prospectus
|
October
19,2005
|
Subscription Opens
|
November
24,2005
|
Allotment of IPO Shares
|
December
28,2005
|
Listing in Dhaka Stock Exchange
|
February
06,2006
|
Listing in Chittagong Stock Exchange
|
February
06,2006
|
First Trading in Stock Exchanges
|
February
06,2006
|
Holding the first public AGM (6th)
|
September17,2006
|
Introduction of first ever Push-Pull service for
policyholders’ information
|
March
01,2007
|
Declaration of first policy bonus
|
January
29,2007
|
First Credit Rating
|
January
30,2008
|
Received Century International Era Award (Gold
Category)
|
March
11,2012
|
3. Sun Life Insurance:
Corporate Status
Sunlife Insurance Company
Limited, since its establishment in the year 2000 as life insurance companies
in the private sector, the company has within a short span of time established
itself as one of the most reputed and trustworthy life insurance companies in
the country. Sunlife Insurance
Company Limited was
incorporated in Bangladesh
on 1st March,
2000 with the Registrar of Joint Stock Companies and Firms, Dhaka,
Bangladesh under the Companies Act 1994 as a public company limited by shares
for carrying out life insurance business and was granted Certificate of
Commencement of business on 1st March, 2000. Date of commencement of commercial
operation is 9th July, 2000. The Company obtained the Certificate of
Registration from the Chief Controller of Insurance, Insurance department on
30th May, 2000 with the authorized Capital of Tk.200,000,000.00 (Two Hundred
million) divided into 2,000,000
ordinary shares of
Tk. 100.00 Each. Subsequently the Company has increased its
authorized capital to Tk. 500,000,000.00 (Five Hundred million subsided its
face value from Tk. 100.00 To Tk. 10.00
each and accordingly
has increased its number of
shares in the
same Extra Ordinary General
Meeting. The sponsors/subscribers have
already contributed to the paid up capital of Tk. 180,000,000.00 (One
Hundred and Eighty million) as
required by the
law. In fulfillment
of the conditions according to
Section-21 (Schedule-10) under Insurance Act, 2010, now the Company proposes
to raise
the paid up capital
to Tk.120,000,000.00 (One
Hundred and Twenty
million) only by
issuing 12,000,000 ordinary shares of Tk. 10.00 each to the general
public. The registered office of the Company is situated at BTA Tower (12th
Floor), 29, Kemal Ataturk Avenue, Road No-17, Banani C/A, Dhaka-1213,
Bangladesh. The company has sailed its journey with the involvement of
selective customer service, underwriting and prompt settlement
of claims have contributed
towards building up
a very respectable
image of the company within the business community.
The company is doing business through 1212 organizational offices of its
projects.
Principal Products/services
EkokBima
|
Islamic DPS Bima (Micro Insurance)
|
Islamic EkokBima (Takaful)
|
Urban Bima
|
GanamukhiBima (Micro Insurance)
|
EttehadBima
|
Islamic AsaanBima
|
SDPS Bima
|
LokomukhiBima(Micro Insurance)
|
AdarshaBima
|
#Liquidity Measurement Ratios:-
1. Current Ratio:
The current
ratio is a popular financial ratio used to test a company's liquidity (also
referred to as its current or working capital position) by deriving the
proportion of current assets available to cover current liabilities. The
concept behind this ratio is to ascertain whether a company's short-term assets
such as cash, cash equivalents, marketable securities, receivables and
inventory are readily available to pay off its short-term liabilities such as
notes payable, current portion of term debt, payables, accrued expenses and taxes.
In theory, the higher the current ratio, the better.
Formula:
Current Ratio
= Current Assets/Current Liabilities
Performance
analysis:
Current ratio for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
10.16639
|
3.472561
|
5.608267
|
7.624803
|
7.345998
|
Pragati
|
6.645388
|
3.512848
|
3.006018
|
5.810454
|
7.216981
|
Sunlife
|
4.217517
|
13.58478
|
16.80934
|
30.30218
|
0
|
Interpretation:
The current
ratio for Sunlife is highest in 2009-2011 but gradually fall behind other 2
companies in recent years. The Padma and Pragati continued maintaining their
ratio average= 5 times. By the rule of thumb the current ratio is more than 2
times which indicates that the three companies is having profitability problem
for idle money.
#Underwriting Ratio:-
1. Loss Ratio:
The difference
between the ratios of premiums paid to an insurance company and the claims
settled by the company. Loss ratio is the total losses paid by an insurance
company in the form of claims. The losses are added to adjustment expenses and
then divided by total earned premiums. So if a company pays $80 in claims for
every $150 in collected premiums, then the company has a loss ratio of 53%.
Loss ratios
vary depending on the type of insurance. For example, for health insurance the
loss ratio tends to be higher than for property and casualty such as car
insurance. This is an indicator of how well an insurance company is doing. This
ratio reflects if companies are collecting premiums higher than the amount paid
in claims or if it is not collecting enough premiums to cover claims. Companies
that have high loss claims may be experiencing financial trouble.
Formula
Loss Ratio=
Net Claim Paid/Net Premium
Performance
analysis:
Loss Ratio for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
0.237467235
|
0.290377233
|
0.135845111
|
0.078898465
|
0.057101973
|
Pragati
|
0.324963431
|
0.256949814
|
0.167937621
|
0.172392608
|
0.183148757
|
Sunlife
|
0.225717903
|
0.125470532
|
0.094238304
|
0.063732675
|
0
|
Interpretation:
The three
companies are losing their efficiency over loss. The loss ratio indicates that
those companies are getting less efficient in managing their loss which is more
claim payment. But in recent years Sunlife is recovering from this loss.
(Loss ratio increase-Efficiency
decrease)
2. Expense Ratio:
A measure of
what it costs an investment company to operate a mutual fund. An expense ratio
is determined through an annual calculation, where a fund's operating expenses
are divided by the average dollar value of its assets under management.
Operating expenses are taken out of a fund's assets and lower the return to a
fund's investors. Also known as "management expense ratio" (MER).
Depending on
the type of fund, operating expenses vary widely. The largest component of
operating expenses is the fee paid to a fund's investment manager/advisor.
Other costs include recordkeeping, custodial services, taxes, legal expenses,
and accounting and auditing fees. Some funds have a marketing cost referred to
as a 12b-1 fee, which would also be included in operating expenses. A fund's
trading activity, the buying and selling of portfolio securities, is not
included in the calculation of the expense ratio. Costs associated with mutual
funds but not included in operating expenses are loads and redemption fees,
which, if they apply, are paid directly by fund investors.
Formula:
= Underwriting
Expense/Net Premium
Performance
analysis:
Expense Ratio for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
0.172411
|
0.115442
|
0.130432
|
0.1412
|
0.265313
|
Pragati
|
0.23577
|
0.35664
|
0.538544
|
0.399199
|
0.406361
|
Sunlife
|
0.092416
|
0.152285
|
0.181957
|
0.218133
|
0
|
Interpretation:
The more
expense the less efficiency occurs. Here the Pragati is having difficulties in
achieving efficiency as its ratio is higher than other two companies. Sunlife
is way better among them.
(Lower ratio
is better)
3. Combined Ratio:
The combined
ratio is comprised of the claims ratio and the expense ratio. The claims ratio
is claims owed as a percentage of revenue earned from premiums. The expense
ratio is operating costs as a percentage of revenue earned from premiums. The
combined ratio is calculated by taking the sum of incurred losses and expenses
and then dividing them by earned premium.
Formula:
Combined
Ratio= Loss Ratio+ Expense Ratio
Performance
analysis:
Combined Ratio for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
0.409878
|
0.405819
|
0.266277
|
0.220098
|
0.322415
|
Pragati
|
0.560733
|
0.613589
|
0.706482
|
0.571591
|
0.589509
|
Sunlife
|
0.318134
|
0.277755
|
0.276196
|
0.281865
|
0
|
Interpretation:
The combined
ratio indicates that the Pragati is having difficulties in efficient managing
of their sales. Here Sunlife is way better than other two companies.
(Lower ratio
is better)
#Profitability Indicator Ratio:-
1. Return on Revenue Ratio:
It calculates
corporation's profitability that compares net income to revenue. Return on
revenue is calculated by dividing net income by revenue. Net income (NI) is
calculated by taking revenues and subtracting the costs of conducting business
in addition to interest, taxes paid and depreciation. Revenue is the amount of
money that a company receives as a result of performing business activities
during a specific period, including discounts and deductions for returned
merchandise. Intrinsically, the difference between net income and revenue is
expenses, such that an increasing ROR implies less expense for higher net
income.
Formula:
Return on
Revenue= Net Operating Income/ Total
Revenue
Performance
analysis:
Return on Revenue for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
0.108906
|
0.160777
|
0.186367
|
0.242043
|
0.015948
|
Pragati
|
0.016401
|
0.112968
|
0.150631
|
0.09882
|
0.12777
|
Sunlife
|
0.122991
|
0.098066
|
0.138306
|
0.158949
|
0
|
Interpretation:
The ratio
indicates that in 2008-2010 the Padma and Sunlife achieved highest net operating
income and in 2009-2011 for Pragati. But their profitability is getting down in
recent years as more expenses occur.
2. Return on Asset (ROA) Ratio:
This ratio
indicates how profitable a company is relative to its total assets. The Return
on Asset (ROA) ratio illustrates how well management is employing the company's
total assets to make a profit. The higher the return, the more efficient
management is in utilizing its asset base. The ROA ratio is calculated by
comparing net income to average total assets, and is expressed as a percentage.
Formula:
Return on
Asset=Net Income/Total Asset
Performance
analysis:
Return on Asset for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
1.381525
|
1.146611
|
0.854614
|
0.872073
|
0.85636
|
Pragati
|
0.994312
|
0.915631
|
0.82137
|
0.872967
|
0.90451
|
Sunlife
|
0.763333
|
0.877445
|
0.926599
|
0.957203
|
0
|
Interpretation:
The ratio
shows that the Padma is doing a good job in managing their assets to turn them
into profit. But Sunlife is not successive in recent years managing it. Pragati
is continuously averaged the profit figure.
3. Return on Equity (ROE):
Return on
equity or return on capital is the ratio of net income of a business during a
year to its stockholders' equity during that year. It is a measure of
profitability of stockholders investments. It shows net income as percentage of
shareholder equity. The higher the ratio is the better the firm is.
Formula:
Return on
Equity= Net Income/Total Shareholder’s Equity
Performance
analysis:
Return on Equity for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
13.13823
|
18.10077
|
67.90272
|
47.87929
|
24.7813
|
Pragati
|
12.65288
|
10.41117
|
8.506431
|
6.074918
|
4.535442
|
Sunlife
|
9.308033
|
13.32789
|
63.05647
|
47.08097
|
0
|
Interpretation:
The Padma and
Sunlife had more net income than Pragati. So they gave more profit to their
shareholders in 2008-2010. But Pragati is continuously earning same net income
and providing it to the shareholders till this year.
4. Investment Yield Ratio:
This is the
return received on an insurance company's assets. The investment yield is obtained
by dividing the average investment assets into the net investment income before
income taxes.
Formula:
Investment
Yield= Investment/Investment Income
Performance
analysis:
Investment Yield for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
21.68503
|
56.84081
|
5.818172
|
2.592396
|
2.601802
|
Pragati
|
5.472957
|
8.183924
|
3.158514
|
4.727838
|
3.215513
|
Sunlife
|
4.927513
|
4.897177
|
6.539216
|
4.998183
|
0
|
Interpretation:
Padma needs
more investment in 2010-2012 to generate required income but Pragati and
Sunlife requires less. It proves they are investing in some good project that
pays higher return.
#Leverage Ratios:-
1. Debt to equity ratio:
The
debt-equity ratio is another leverage ratio that compares a company's total
liabilities to its total shareholders' equity. This is a measurement of how
much suppliers, lenders, creditors and obligors have committed to the company
versus what the shareholders have committed. To a large degree, the debt-equity
ratio provides another vantage point on a company's leverage position, in this
case, comparing total liabilities to shareholders' equity, as opposed to total
assets in the debt ratio. Similar to the debt ratio, a lower the percentage
means that a company is using less leverage and has a stronger equity position.
Formula:
Debt to Equity Ratio = Total Debt/Total Equity
Or
Debt to
Equity Ratio= Total Liabilities/Total Shareholder’s Equity
Performance
analysis:
Debt to Equity Ratio for
|
2012
|
2011
|
2010
|
2009
|
2008
|
Padma
|
9.535314
|
14.78632
|
78.45422
|
53.90285
|
27.93795
|
Pragati
|
11.72527
|
10.37049
|
9.356393
|
5.958935
|
4.014252
|
Sunlife
|
11.19394
|
14.18944
|
67.05155
|
48.18599
|
0
|
Interpretation:
The more
debt the more risk. Here only Pragati takes less debt than others. But Debt
also have interest that tax deductible that boosts more profit as well as more
EPS. In this case Pragati is less aggressive than others.
Ratios at a glance (Individual):for the years of
2008-2012
#Padma Islami Life Insurance:
Year
|
Liquidity
ratio
|
||
1
|
Current
Ratio
|
Current
Asset/
|
Current
Liability
|
2012
|
10.1663926
|
1785506015
|
175628277
|
2011
|
3.472561213
|
1542841348
|
444294932
|
2010
|
5.608267475
|
1775269471
|
316545079
|
2009
|
7.62480326
|
1377854240
|
180706858
|
2008
|
7.345998414
|
695662700
|
94699544
|
Underwriting
Ratio
|
|||
2
|
Loss
Ratio
|
Net
Claim Paid/
|
Net
Premium
|
2012
|
0.237467235
|
361154457
|
1520860163
|
2011
|
0.290377233
|
322869831
|
1111897886
|
2010
|
0.135845111
|
243411852
|
1791833731
|
2009
|
0.078898465
|
126934167
|
1608829361
|
2008
|
0.057101973
|
67631446
|
1184397703
|
3
|
Expense
Ratio
|
Underwriting
Expense/
|
Net
Premium
|
2012
|
0.172410804
|
262212724
|
1520860163
|
2011
|
0.115441802
|
128359496
|
1111897886
|
2010
|
0.130432263
|
233712928
|
1791833731
|
2009
|
0.141199638
|
227166123
|
1608829361
|
2008
|
0.26531278
|
314235847
|
1184397703
|
4
|
Combined
Ratio
|
Loss
Ratio+
|
Expense
Ratio
|
2012
|
0.409878039
|
0.237467235
|
0.172410804
|
2011
|
0.405819035
|
0.290377233
|
0.115441802
|
2010
|
0.266277374
|
0.135845111
|
0.130432263
|
2009
|
0.220098103
|
0.078898465
|
0.141199638
|
2008
|
0.322414753
|
0.057101973
|
0.26531278
|
Profitability
Ratio
|
|||
5
|
Return
on Revenue
|
Net
Operating Income/
|
Total
Revenue
|
2012
|
0.108906476
|
429251528
|
3941469269
|
2011
|
0.160777435
|
523835171
|
3258138618
|
2010
|
0.186366901
|
617061665
|
3311004599
|
2009
|
0.242042957
|
582098003
|
2404936753
|
2008
|
0.015948048
|
263301908
|
16509976851
|
6
|
Return
on Asset
|
Net
Income/
|
Total
Asset
|
2012
|
1.381524767
|
3941469269
|
2852984879
|
2011
|
1.146610884
|
3258138618
|
2841538191
|
2010
|
0.854614362
|
2037081563
|
2383626642
|
2009
|
0.872072911
|
1436378684
|
1647085542
|
2008
|
0.856359861
|
743439018
|
868138562
|
7
|
Return
on Equity
|
Net
Income/
|
Total
Shareholder’s Equity
|
2012
|
13.1382309
|
3941469269
|
300000000
|
2011
|
18.1007701
|
3258138618
|
180000000
|
2010
|
67.90271877
|
2037081563
|
30000000
|
2009
|
47.87928947
|
1436378684
|
30000000
|
2008
|
24.7813006
|
743439018
|
30000000
|
8
|
Investment
Yield
|
Investment/
|
Investment
Income
|
2012
|
21.68503401
|
626443421
|
28888284
|
2011
|
56.84080707
|
707810150
|
12452500
|
2010
|
5.818172373
|
390417996
|
67103202
|
2009
|
2.59239581
|
117349346
|
45266755
|
2008
|
2.601801688
|
93400640
|
35898447
|
Leverage
Ratio
|
|||
9
|
Debt
to Equity Ratio
|
Debt/
|
Equity
|
2012
|
9.535314233
|
2860594270
|
300000000
|
2011
|
14.78632328
|
2661538191
|
180000000
|
2010
|
78.4542214
|
2353626642
|
30000000
|
2009
|
53.9028514
|
1617085542
|
30000000
|
2008
|
27.93795207
|
838138562
|
30000000
|
#Pragati Life Insurance:
Year
|
Liquidity
ratio
|
||
1
|
Current
Ratio
|
Current
Asset/
|
Current
Liability
|
2012
|
6.645387861
|
1780734940
|
267965539
|
2011
|
3.512847726
|
1512994922
|
430703247
|
2010
|
3.006017638
|
1187347911
|
394990334
|
2009
|
5.810454204
|
891929560
|
153504275
|
2008
|
7.216980546
|
645590614
|
89454393
|
Underwriting
Ratio
|
|||
2
|
Loss
Ratio
|
Net
Claim Paid/
|
Net
Premium
|
2012
|
0.324963431
|
589256023
|
1813299489
|
2011
|
0.256949814
|
483009020
|
1879779609
|
2010
|
0.167937621
|
297254628
|
1770030000
|
2009
|
0.172392608
|
186832361
|
1083760860
|
2008
|
0.183148757
|
132900847
|
725644275
|
3
|
Expense
Ratio
|
Underwriting
Expense/
|
Net
Premium
|
2012
|
0.235769781
|
427521223
|
1813299489
|
2011
|
0.356639567
|
670403785
|
1879779609
|
2010
|
0.538544098
|
953239210
|
1770030000
|
2009
|
0.399198758
|
432635989
|
1083760860
|
2008
|
0.406360732
|
294873339
|
725644275
|
4
|
Combined
Ratio
|
Loss
Ratio+
|
Expense
Ratio
|
2012
|
0.560733212
|
0.324963431
|
0.235769781
|
2011
|
0.61358938
|
0.256949814
|
0.356639567
|
2010
|
0.70648172
|
0.167937621
|
0.538544098
|
2009
|
0.571591366
|
0.172392608
|
0.399198758
|
2008
|
0.589509489
|
0.183148757
|
0.406360732
|
Profitability
Ratio
|
|||
5
|
Return
on Revenue
|
Net
Operating Income/
|
Total
Revenue
|
2012
|
0.016400569
|
75971169
|
4632227699
|
2011
|
0.112968012
|
467713969
|
4140233682
|
2010
|
0.150631203
|
551696372
|
3662563666
|
2009
|
0.098820116
|
230922454
|
2336796032
|
2008
|
0.127769712
|
216039523
|
1690850828
|
6
|
Return
on Asset
|
Net
Income/
|
Total
Asset
|
2012
|
0.994311672
|
3163220802
|
3181317178
|
2011
|
0.915630549
|
2602792187
|
2842622704
|
2010
|
0.821370106
|
2126607850
|
2589098184
|
2009
|
0.872966617
|
1518729566
|
1739733841
|
2008
|
0.904510121
|
1133860529
|
1253563120
|
7
|
Return
on Equity
|
Net
Income/
|
Total
Shareholder’s Equity
|
2012
|
12.65288321
|
3163220802
|
250000000
|
2011
|
10.41116875
|
2602792187
|
250000000
|
2010
|
8.5064314
|
2126607850
|
250000000
|
2009
|
6.074918264
|
1518729566
|
250000000
|
2008
|
4.535442116
|
1133860529
|
250000000
|
8
|
Investment
Yield
|
Investment/
|
Investment
Income
|
2012
|
5.472956934
|
1229532613
|
224656000
|
2011
|
8.183923701
|
1155840096
|
141233000
|
2010
|
3.158513891
|
1193422364
|
377843000
|
2009
|
4.727837598
|
759356908
|
160614000
|
2008
|
3.215513089
|
536897436
|
166971000
|
Leverage
Ratio
|
|||
9
|
Debt
to Equity Ratio
|
Debt/
|
Equity
|
2012
|
11.72526871
|
2931317178
|
250000000
|
2011
|
10.37049082
|
2592622704
|
250000000
|
2010
|
9.356392736
|
2339098184
|
250000000
|
2009
|
5.958935364
|
1489733841
|
250000000
|
2008
|
4.01425248
|
1003563120
|
250000000
|
#Sun Life Insurance:
Year
|
Liquidity
ratio
|
||
1
|
Current
Ratio
|
Current
Asset/
|
Current
Liability
|
2012
|
4.21751684
|
2262192075
|
536380093
|
2011
|
13.58477533
|
1638732861
|
120630104
|
2010
|
16.80934228
|
1164763182
|
69292609
|
2009
|
30.30217626
|
1004533476
|
33150539
|
Underwriting
Ratio
|
|||
2
|
Loss
Ratio
|
Net
Claim Paid/
|
Net
Premium
|
2012
|
0.225717903
|
333135307
|
1475892263
|
2011
|
0.125470532
|
194649114
|
1551353218
|
2010
|
0.094238304
|
142668750
|
1513914665
|
2009
|
0.063732675
|
93757605
|
1471107328
|
3
|
Expense
Ratio
|
Underwriting
Expense/
|
Net
Premium
|
2012
|
0.092416374
|
136396611
|
1475892263
|
2011
|
0.152284782
|
236247487
|
1551353218
|
2010
|
0.181957462
|
275468070
|
1513914665
|
2009
|
0.218132701
|
320896615
|
1471107328
|
4
|
Combined
Ratio
|
Loss
Ratio+
|
Expense
Ratio
|
2012
|
0.318134277
|
0.225717903
|
0.092416374
|
2011
|
0.277755315
|
0.125470532
|
0.152284782
|
2010
|
0.276195766
|
0.094238304
|
0.181957462
|
2009
|
0.281865376
|
0.063732675
|
0.218132701
|
Profitability
Ratio
|
|||
5
|
Return
on Revenue
|
Net
Operating Income/
|
Total
Revenue
|
2012
|
0.122990551
|
505297895
|
4108428577
|
2011
|
0.098065579
|
355046430
|
3620500030
|
2010
|
0.138306117
|
420367289
|
3039397670
|
2009
|
0.158949081
|
397217029
|
2499020614
|
6
|
Return
on Asset
|
Net
Income/
|
Total
Asset
|
2012
|
0.763332736
|
2792409985
|
3658181882
|
2011
|
0.877444854
|
2399020929
|
2734098809
|
2010
|
0.926598622
|
1891694198
|
2041546527
|
2009
|
0.957202895
|
1412429166
|
1475579705
|
7
|
Return
on Equity
|
Net
Income/
|
Total
Shareholder’s Equity
|
2012
|
9.308033283
|
2792409985
|
300000000
|
2011
|
13.32789405
|
2399020929
|
180000000
|
2010
|
63.05647327
|
1891694198
|
30000000
|
2009
|
47.0809722
|
1412429166
|
30000000
|
8
|
Investment
Yield
|
Investment/
|
Investment
Income
|
2012
|
4.927512877
|
1174118613
|
238278142
|
2011
|
4.897176788
|
825455044
|
168557330
|
2010
|
6.539215717
|
617524539
|
94434037
|
2009
|
4.998183422
|
355283713
|
71082568
|
Leverage
Ratio
|
|||
9
|
Debt
to Equity Ratio
|
Debt/
|
Equity
|
2012
|
11.19393961
|
3358181882
|
300000000
|
2011
|
14.18943783
|
2554098809
|
180000000
|
2010
|
67.0515509
|
2011546527
|
30000000
|
2009
|
48.18599017
|
1445579705
|
30000000
|
Note:
We
cannot find the data required for 2008 of Sunlife Insurance Company.
Conclusion & Recommendation:
Ratios are not
just one number divided by another. The trick is in the way ratios are analyzed
and used by the decision making criteria. A good strategy is to compare the
ratios to some sort of benchmark, such as industry averages or to what a
company has done in the past, or both. Once ratios are calculated, an analyst
needs some benchmarks to find out where the company stands at that particular
point. Useful benchmarks are industry comparisons and company trends.
It may be
useful to compare a company to certain industry averages to get a feel for how
the company is performing. In that case it is necessary to obtain industry
performance measures.One of the ways in which financial statements can be put
to work is through ratio analysis. Ratios are simply one number divided by
another; as such they may or not be meaningful. In finance, ratios are usually
two financial statement items that may be related to one another and may
provide the prudent user a good deal of information. Of the myriad of ratios
that could be generated, some will be more meaningful than others.
Here we find
out that:
Ratios
|
Padma Islami
|
Pragati Life
|
Sunlife
|
Liquidity
|
Average
|
Average
|
Bad
|
Underwriting
|
Average
|
Bad
|
Average
|
Profitability
|
Good
|
Bad
|
Average
|
Leverage
|
Bad
|
Good
|
Bad
|
References:
4. http://en.wikipedia.org/wiki/Financial_ratio
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