Human Resource Management Practices in Sadharan Bima Corporation: A Study on Rajshahi Zone

Abstract

The insurance market in Bangladesh now consists of two state owned corporations, forty three non-life private insurance companies, sixteen private life insurance companies and one foreign life insurance company, a total of 62 insurance companies. Thus, the insurance sector in Bangladesh has grown substantially after liberation and depended remarkably with number of companies in both life and non-life segments with the expansion of size of the insurance market, the volume of assets of the industry has also been increased substantially. In respect of reinsurance the prevailing insurance Act provides that fifty percent of company’s re-insurance business must be placed with Sadharan Bima Corporation and remaining fifty percent may be reinsured either with SBC or with any other insurer in Bangladesh or abroad. At present most of the non-life insurance companies placing 100% of their re-insurance business with SBC. Though Sadharan Bima Corporation started its operation as a monopoly insurer 40 years ago, it is now playing an important role in the fast changing insurance market of Bangladesh. This sector is also playing a vital role for investing huge amount of money in different investment area and also giving loans to the government and other agencies, like Government Securities, Shares, Debentures and Loans, and Bank Deposits. There are many people engage in this sector. Though this sector is a profitable one, but their services are always questionable because of proper human resources practices, lack of motivation, lack of training, lack of publicity, lack of proper Government policies, etc.

Sadharan Bima Corporation inherited little more than 2,200 employees of the erstwhile 49 unit companies at the start. With the exception of 9 East Pakistani companies and Bangladesh Insurance Corporation, other 39 units were branch establishments. Branch of an insurance company is manned mostly by business development personnel’s and other sub-ordinate staff. Technical people like underwriting, claims, re-insurance, finance, and administration are located at the Head Office of the company. During the last decades employment in the officer cadre was insignificant. There are more promote officers than newly recruited and professionally qualified cadres in the strength. In 2010-11 SBC has 728 employees all over the country out of which there was a General Manager, 9 Deputy General Manager, 10 Assistant General Manager, 34 Manager, 66 Deputy Manager, 154 Assistant Manager, 73 Junior Officer and 381 Non Officer employees working there. Education qualification of these 728 officers and employees are as Masters-203, Graduate-96, H.S.C-190, S.S.C-236, and Under S.S.C-03. Major insurance schemes of SBC’s are fire, marine, and motor, but in a broader way SBC has 24 categories of insurance policies like, fire insurance policy, marine hull insurance policy, marine cargo insurance policy, motor insurance policy, house holder’s comprehensive insurance policy, product liability insurance policy, burglary insurance policy, contractor’s all risk policy, engineering insurance policy, public liability insurance policy, aviation insurance policy, workmen’s compensation policy, cash in safe insurance policy, cash in transit insurance policy, personal accident insurance policy, peoples personal accident insurance policy, dread disease insurance policy, overseas medi-claim (business & holiday) insurance, overseas medi-claim (employment & study) insurance, export credit guarantee insurance, livestock insurance policy, crop insurance, all risks insurance policy , and fidelity guarantee policy.

The present study has concentrated on human resources practices of SBC under Rajshahi Zone. There are 15 branch offices of SBC under Rajshahi Zone and all branches were considered for the study. The time span of the study was 11 (Eleven) years beginning from 2001 to 2011. The study also considered overall performance of Sadharan Bima Corporation with special reference to Rajshahi Zone. There are so many areas of human resource management. The researcher has considered only few areas of human resource management like, employee’s motivation, job satisfaction, employee-management relations, training, work environment, productivity, job security, commitment, and trade union. The researcher tried to critically evaluate the impact of human resource management practices on job satisfaction, motivation and job performance.

The study is based on both primary and secondary sources of data include 16 SBC branches under Rajshahi Zone. 11 years data have been used for performance measurement and statistical testing of hypotheses. Hypotheses have been formulated to achieve the objectives and ANOVA, correlation, and chi-square are the major tools used for testing the hypotheses. A questionnaire was used for purpose of data collection. In accordance with the main hypotheses of the study, the thesis has been designed into seven chapters.

As the sole government sector general insurance company Sadharan Bima Corporation (SBC) is doing their business and earning profits each and every year. During the year 2011, the main business operation of SBC performed reasonably well despite the Corporation has passed through a year with full of challenges such as worldwide recession and depression, capital and money market instability, slow growth in manufacturing sectors and slow industrial growth due to lack of the above adverse situation SBC has earned taka 175.19 crore net profit in year 2011 as against taka 125.52 crore in the year 2010. In the year 2011, the gross premium income and the overall business volume of SBC grew in accordance with its business plan, the growth was higher than that of preceding year. Gross premium income attained taka 6,017 million as against taka 5,745 million in 2010-an increase of 4.73%. Net premium income attained taka 3,434 million as against taka 3,182 million in 2010-an increase of 7.93%. Underwriting profit increased to taka 1,159 million from taka 725 million in 2010-an increase of 59.86%. Gross claims incurred taka 2,006 million (Loss ration 33.34%) and net claims incurred taka 1,126 million (Loss ration 32.79%). And investment income increased by 5.82% to taka 672 million from taka 635 million in 2010.

Overall performance of SBC has been analyzed as per gross premium income against direct insurance, income from premium against reinsurance, total income from premium, net claim paid, net profit of loss from underwriting and reinsurance, total business (underwriting and reinsurance) performance of SBC, claim settlement, income from investment, contribution of government exchequer, net profit and training provided to employees by SBC. Growth rates are also analyzed for every business performance. Overall performance of SBC is satisfactory, though their performance was fluctuated during the study period. SBC made loss for fire insurance but they made profit for other policies.

Business performance of Rajshahi Zone has been analyzed on the basis of branch wise business performance, branch wise total number of policies, total policy, total premium income, and claim & claim payment of insurance. Secondary data has been used to analyze these performances.

From analysis secondary data, it was found that there is a significant variation of gross premium income against direct insurance, income from premium against reinsurance, total income from premium, net claim paid, net profit of loss from underwriting and reinsurance, and total business (underwriting and reinsurance) performance of Sadharan Bima Corporation within the study period. On the other hand, there is a significant variation of fire policy, marine policy, motor policy, miscellaneous policy, personal accident policy, and total no. policy among the branches under Rajshahi Zone within the study period and Premium income significantly varied among the branches under Rajshahi Zone during the study period.

To evaluate human resources management of SBC under Rajshahi Zone, different factors have been analyzed according to the opinions given by the interviewed officers and desk employees of the sample branches. Opinions have been collected through structured questionnaire and data have been shown through simple frequency table with percentage. Hypothesis have been formulated and tested. Major variables that have been considered to analyze HRM practices are job satisfaction and motivation, job performance, training, commitment and trade union. Different factors were considered under each variable. Most of the cases, development officers and desk employees expressed similar opinions regarding different variables and factors within variables. Some of the cases they showed different opinions. Major problems identified from analysis of primary data are, lack of work recognition, lack of fair practice of promotion, lack of proper benefits, lack of opportunity to go ahead in the job, lack of positive attitude of supervisors, delay of salary increase are some of the problems related to job satisfaction and motivation of the employees of SBC. On the other hand, lack of incentive for collection of insurance, political pressure, lack of proper training, lack of commitment, unfair practices of trade union are also the negative side of HRM practices of SBC.