Sadharan Bima Corporation (SBC) established on 14 May 1973 under the Insurance Corporation Act 1973. Its authorised capital was Tk 50 million, later raised to Tk 200 million by the Ordinance VIII of 1986. In 1999, the paid capital of the corporation was Tk 100 million, which was fully subscribed by the government.

The total number of insurance companies registered in Pakistan up to 1968 was 81, of which 41 were foreign. Of the 40 indigenous companies, 10 were registered in East Pakistan and 30 in West Pakistan. 21 of the foreign companies had their origin in UK, 8 in India, 5 in USA, 3 in New Zealand and the remaining four in Australia, Canada, France, and Hong Kong (one in each). Ten of the 40 Pakistani companies were engaged exclusively in life insurance business, 21 in life and other businesses, and 9 in other businesses only. Foreign companies concentrated more on non-life insurance. Two of them did life insurance business only and one did life as well as general insurance.

About 75 insurance companies, including 10 locally incorporated ones had insurance business in East Pakistan. Following the independence of Bangladesh, both life and general insurance business in the country was nationalised by the Bangladesh Insurance (Nationalisation) Order 1972. Five corporations were established to absorb, own and control the businesses of the 75 existing insurance companies. These new corporations were: Bangladesh Jatiya Bima Corporation, Karnafuli Bima Corporation, Tista Bima Corporation, Surma Jiban Bima Corporation, and Rupsa Jiban Bima Corporation. In 1973, the government decided to integrate life and general insurance companies into two corporations. Accordingly, the jiban bima corporation was formed to take over the undertakings of Surma Jiban Bima Corporation and Rupsa Jiban Bima Corporation. Karnafuli Bima Corporation and Tista Bima Corporation were integrated into Sadharan Bima Corporation. In that year, the government also decided to merge Bangladesh Jatiya Bima Corporation with the newly formed Sadharan Bima Corporation.

As the single state-owned institution to handle all types of general insurance business in Bangladesh, Sadharan Bima Corporation did 100% of the business until 1984. Through the Insurance (Amendment) Ordinance 1984 and Insurance Corporations (Amendment) Ordinance 1984, the government allowed operation of insurance companies in the private sector. In 1990, the government further allowed private sector insurance companies to underwrite 50% of public sector business and the remaining 50% was kept reserved for Sadharan Bima Corporation. Private insurance companies were also given option to insure 50% of their re-insurable business with any local or foreign insurance companies. SBC distributes 50% of all public sector insurance businesses to private general insurance companies on an equal basis.

SBC underwrites private sector business and competes with private companies in the underwriting business. Private insurance companies have the option to re-insure 50% of their re-insurable business with any local or foreign insurance companies. But in practice, they do not exercise the option. Instead, they re-insure 100% of their re-insurable business with SBC, which offers better terms and conditions. SBC also provides insurance coverage to some non-traditional (sometimes, non-profitable) businesses like livestock rearing, shrimp culture, air travel, sickness and dread disease insurance. In addition, the corporation manages the export credit guarantee scheme.

In 1999, SBC earned gross premiums of Tk 616.86 million, comprising fire insurance (Tk 162.63 million), marine insurance (Tk 221.74 million) and miscellaneous insurance (Tk 232.49 million). Re-insurance income of the corporation was Tk 1,362.06 million. Having wider capacity, the corporation retains maximum portion of risks that come from direct underwriting and reinsurance acceptance. Commission earned by the corporation from foreign re-insurers was Tk 150 million in 1999, when reinsurance commission paid by SBC to other companies was Tk 429.03 million. Net premium incomes of SBC were Tk 1,146.41 million in that year after adjusting reinsurance accepted and ceded. Net claims settled by the company during the year amounted to Tk 470.06 million, of which Tk 140 million for fire, Tk 276.76 million for marine, and Tk 52.83 million for miscellaneous insurance. On 31 December 1999, the corporation's net underwriting profit stood at Tk 163.86 million and of this amount, Tk 83.93 million was derived from marine insurance. The corporation earned investment incomes of Tk 307.15 million in 1999 and the investments were in FDR, shares and debentures, and leasehold and other properties. Net profit of the corporation in that year was Tk 430.32 million consisting of net underwriting profit, interest, investment income, rents and others. At the end of the year, the corporation contributed an amount of Tk 295.31 million to the national exchequer as tax and profit. On 31 December 1999, total assets of SBC were valued at Tk 5,353.19 million.

The management of the corporation is vested in a 7-member board of directors appointed by the government of Bangladesh. Chief executive of the corporation is the managing director, who is assisted by 5 general managers, 7 deputy general managers and 10 assistant general managers. There are six different departments in the SBC. These are: (a) Administration, Establishment and Real Estate, (b) Finance and Accounts, (c) Head Office Claims, (d) Reinsurance, (e) Underwriting, Planning and Development, and (f) Export Credit Guarantee Scheme. The corporation has 1,694 employees. Its head office is at Dhaka and it has six regional offices at Dhaka, Chittagong, Rajshahi, Khulna, Narayanganj, and Comilla, two regional offices at Sylhet and Mymensingh, and 108 branch and unit offices throughout the country. [S M Mahfuzur Rahman]