I am pleased to welcome you all at the 25th Annual General Meeting of Prime Insurance Company Limited. It is my pleasure to report you on the Company’s performances for the year 2020.
I would like to express my deepest gratitude to you all, for being with us, and for inspiring us to face the erratic economical turmoil. The Pandemic Covid-19 results in high priced oscillation of the economy, as well as it infected, affected and destroyed the family, fortune, and it become the fear of communal society. Almost all the business entrepreneurs changed their strategy and focused on sustainability instead of thinking aggressive revenue growth.
Global economic growth in 2019 compared to 2018 was weaker due to weak global demand and the trade dispute between the USA and China. Further, in 2020, the global economic growth became negative due to pandemic Covid-19 effects. Almost governments of all the countries in the globe imposed lockdown, isolation and restriction on the movement of goods and transportation of those to protect the outbreak of the Corona Virus.
The industrial and economic growth is required to be recovered which is dependent on the strategic planning and effective implementation of monitoring and fiscal stimulus package, restoration of normal economic activities and fading of pandemic. In short, the projected global economic growth will pick up to 5.2% in 2021; however, it depends on the sustainability of the investment incentives and creating demand of products and services, and the availability of the transpiration, and transformation of the industrialization.
Many National and International manufacturing Companies in Bangladesh were closed down due to insufficient raw materials, liquidity crisis, uncertainty of regaining the normal export and import transaction, and having the unusual demand and supply chain of the products and services.
GDP growth of Bangladesh was 5.2% in 2020 which was much lower compared to 8.2% in 2019. All major sectors of business in Bangladesh witnessed lower economic growth. Service Sector of Bangladesh accounts for the largest contribution in the national GDP which was 51.3% in 2020. By this time a massive negative tendency developed which reveals that, Import declined by 8.6% and export earnings declined by 10.6%.
The growth of Insurance Sector of Bangladesh was forecasted to increase by 7.04% in 2020 in terms of premium income. Like all other sectors, the premium growth of the Insurance Sector of Bangladesh declined remarkably, and insurance Companies are concentrating on sustainability instead of achieving the aggressive premium growth. The major profit of the Non-life Insurance Companies are generated from Marine Insurance business; however, Marine Insurance business depends on the number and amount of export and import transaction. But the export and import was almost vanished during the lockdown period, and consequently, many insurance companies were in trouble to make underwriting profit.
Prime Insurance Company Ltd earned 743.30 million in 2020 which was 711.68 in 2019. Retained earnings of 2019 were lower compared to the retained earnings of the year 2020. Profit of the Company was due to investment in share business, and income generated from the interest of FDRs. FDRs in the year 2020 were remarkable among preceding 5 years.
Like all other business enterprises of Bangladesh, Prime Insurance Company Ltd. abided by the rules of complying the lockdown for at least 66 days in the year 2020 for which significant amount of earnings decreased from marine insurance business of the Company for the year 2020. But the incomes generated by the Company in 2020 were in favor of the shareholders to distribute the dividend. In that year, revenue income decreased and profit increased due to strict controlling of the excess commission and reduction of the management expenses. Upward trend of share market was also a reason of incurring profit in 2020 which became possible due to the strategic knowhow of the Chairperson of the Bangladesh Securities and Exchange Commission.
Prime Insurance Company Ltd. is also planning to utilize the technology to cope with the global system. Digital marketing of the insurance products will be a future plan of the Company. Risk Management of the Company will also be measured and a research based team will have to be formed to receive the information.
In line with the retained earnings of 2020 of the Company, this year Company forecasted to distribute at least 10% cash dividend. However, the said proportion of dividend was average in comparison with the dividend payout ratio of the listed companies in Bangladesh operating in similar context.
Further, the statements of financial position, Directors’ Report, Corporate Governance including other activities of the Company presented in the Annual Report 2020 are the fundamentals to understand the Company’s financial strength and the long run achievement. Therefore, respected shareholders are requested to please go through the Annual Report- 2020 and Directors’ Report therein to understand the future of the Company.
MR. SUZADUR RAHMAN