Dear Shareholders,

Hope this letter finds you and your family in good health and spirit.

I would like to express my humble gratitude to Almighty Allah for keeping us safe and closing the year 2023 as a successful business year despite all odds and challenges. I am honored and humbled to be able to lead our great team at Sena Insurance PLC.

SIPLC has a strong 11 years of legacy and I am proud to be associated in this journey since inception to see the Company starting from the scratch and now it is considered as one of the most promising insurance companies in the country. This has become possible only by the grace of Allah and with the continuous support of the respected Chairman & other members of the Board, respected stakeholders, valued partners, distinguished patrons and well wishers. I would make a special mention of IDRA and BIA for their relentless support for this Company in growing as a vibrant and compliant insurance company in the country.

As I connect with you today through my annual shareholder letter, I would like to start with abrief overview of the current economic condition, performance and strategy of our Company. In 2023, SIPLC stepped into various business operations with its commitment to maintaining superior corporate governance practices and balancing of growth, profitability and risk.

Insurance as a Protection

Insurance is vital for a developing country like Bangladesh since it not only ensures policyholders’ protection against exigent situations, but also helps to direct long-term finance for public expenditure, thus ensuring a good social imprint. Moreover, there are a number of measures supported by industry and regulators that have resulted in increased penetration, although it remains very low both as a percentage of the population covered and in premiums as a proportion of GDP. This company is thus pushing to foster greater insurance involvement in Bangladesh by making insurance more inclusive, accessible, and affordable in order to contribute to closing the protection gap. This corresponds with our objective of creating a longstanding insurance institution that sensitively fulfills clients’ security and long-term requirements. We want to do this by improving our understanding of the needs of our clients by delivering appropriate services, and ensuring continual interaction with care, compassion, and attentiveness.

Global Insurance Scenario

Global economies have faced daunting headwinds during the fiscal year 2023 owing to geopolitical uncertainties, trade tensions, volatile commodity prices, tightening interest rates, and liquidity. While advanced economies have experienced modest growth or stagnation, India and China have emerged as resilient and are one of the fastest-growing economies worldwide. This can be attributed to robust investment activity, supported by the government’s enhanced capital expenditure for infrastructure and thriving private consumption.

Geopolitical tension generates uncertainty and risks for the insurance industry, which usually puts short-term pressure on marine, aviation, travel, and property insurance losses, depending on its duration and breadth. Even if the conflict remains localized, continued geopolitical risk may lead to tighter underwriting terms and conditions, particularly in lines such as cargo, hull, war, piracy, terrorism, and construction. In some cases, war exclusions have already been widened.

 Despite the progress on economic disinflation, claims development dynamics are a major concern for the general insurance sector. Claims have risen significantly across lines of business in virtually all major non-life insurance markets over the past five years. The impact of economic inflation on claims growth is easing in 2023 from the highs of 2022, but it remains elevated. The shift of inflation to wages and health care costs this year is seen in rising claims costs on the casualty line. We expect the impact of economic inflation on claims to ease between 2024 and 2025. However, these times are difficult for insurance companies, so they will need to stay abreast of tackling inflation and utilizing economic growth. The insurance industry faces pressure from high inflation this year, but higher interest rates will be a positive aspect from 2024, reports Swiss Re.

Bangladesh Market and Our Position

The country’s insurance sector has several specific challenges. The main challenge is the crisis of confidence somewhat due. The crisis has begun to ease somewhat due to the recent move by the Insurance Development and Regulatory Authority (IDRA). The second challenge is that insurance services are also important, like banks, but the general public is not aware of that. The third challenge is the various commissions and other trends. However, at present, this problem has diminished to a great extent.

 In spite of the hurdles, Sena Kalyan Insurance Company Limited was able to sustain its positive trend of growth in business with the unwavering dedication of the staff and board of directors. In 2023, SKICL earned a gross premium income of Tk999.55 million, registering growth of 25% compared to the previous year. The net premium income was Tk420.90 million, which is a 22% increase over the previous year, mainly due to our prudent underwriting.

 Our company is a little different than others. 60% of the sponsored shares are owned by Sena Kalyan Sangstha (SKS). Such a sponsor helps us to abide by the rules of the government and IDRA. You may know that we commenced our business in the latter part of 2013 and reached break-even within a year. We started paying dividends in 2015 and successfully reached out to our valued clients. Within a short span of 11 years, we have acquired sizeable assets and grown 536 times with a continuous ascending graph.

 Business Strategy

 We are the youngest insurance Company in the country. SKICL continuously screened the business and shortlisted the risk-based products and services. In this regard, the number of customers has been increasing day by day in the 11 years since its inception due to timely payment of insurance claims and abiding by existing rules. We cherish the credible image of our beloved Armed Forces and do justice to it through our services. Our company’s expertise in the general insurance industry is driven by our comprehensive and customer-centric product portfolio coupled with a multichannel distribution strategy that is dynamically reviewed to adapt to the changing market demand. We continue to invest in strengthening our distribution, digital capabilities and growing in retail health and corporate lines of business. Through our focus on growth levers such as innovation, digital advancements, launching new products, strengthening our distribution engine, and rationalizing cost while scaling up our preferred lines of business.

Human Capital

Our teams are focused on delivering value for our customers, and this is our biggest asset and major differentiator. It is truly the diligence, creativity, commitment, and hard work of these teams that enable us to succeed. Their contribution is vital, and it is the responsibility of our executive management to consider their team’s interests in every decision they make.

 Thus, we arrange a congenial environment for our staff members to ensure self-motivation in discharging responsibilities in the most professional manner. Apart from providing in-house training at our Head Office, we also provide training to our employees in the local and international arena.

 ESG Focus

As a responsible corporate citizen, your company understands its responsibility towards environmental conservation and has taken proactive steps towards ensuring sustainable operations. Your company has an ‘Environmental, Social, and Governance (ESG) Committee’ of the Board, comprising members with diverse skills and expertise to oversee all ESG initiatives. Your company has also implemented a robust Enterprise Risk Management (ERM) framework that integrates environmental, social, and governance (ESG) risks, allowing us to take better decisions with a long-term, sustainable outlook.

 Future Optimistic

Every year our income and profit have been steadily increasing. We pay the insurance claims to the customers on time, and that’s why customers trust us. We want to reach people’s doorsteps through new services. Promulgation of Bancassurance could be a good opening in this regard. This channel, leveraging the existing banking infrastructure, has the potential to revolutionize access to insurance amongst the masses. The opening up of Bancassurance has led to the government’s emphasis on generalizing insurance, which is very important for the insurance sector.

However, we have all witnessed that the power of togetherness, intellect, and resilience can help humans navigate even in the most challenging circumstances. We at SKICL are proactively drafting our strategies to stay ahead of the curve and are mapping out solutions for the challenges of the present and the future. We intend to expand across distribution, digital, technology, and claims services, and in order to provide insurance services to the majority of people in the country, we intend to focus significantly on the agriculture sector, livestock, and public transports to provide insurance services.

 The progressive plan of this Company has the following highlights:

1. Already established 9 (nine) branches by 2023.
2. Plans to have networks in all divisional headquarters by 2025.
3. We are in a process to engage in cattle and crop insurance on a moderately larger

 scale.

1. We have launched a special app to reach out to all sectors of people.
2. We plan to ensure our growth by 10% each year through innovative products.

Since our Company is owned by the Armed Forces, all our profits are spent on supporting humanitarian cases, hence, anyone can be encouraged to be a part of this noble initiative. Sena Kalyan Insurance Company cordially invites all to be our valued partners by availing of the best possible risk management schemes for your business and affiliated facilities.

We got listed with Dhaka and Chittagong stock exchanges in 2021 and within only 2 (two) years’ time, we achieved the following prestigious awards for our performance, good governance, and compliance:

1. 23^rd ICAB National Award for the Best Presented Annual Reports-2022.
2. 13^th ICMAB Best Corporate Award-2022.
3. 9^th ICSB National Award for Corporate Governance Excellence-2021.

 We will remain a trusted risk manager at all times for our partners and, at the same time, add value to their investments as a sustainable financial institution. We hope that our respected shareholders, valued clients, and other stakeholders will always be with us in our steady and successful journey ahead.

 

Thank you for keeping us in your trust.

Brig Gen Md Shafique Shamim, psc (Retd)

Managing Director & CEO