business accounting
ABSTRACT: This case deals with two counter proposals offered to an organization by two competing insurance companies. The case will expose the students to health insurance packages and also allow them to use their financial analysis capacity. Further, the case will expose the students to negotiations that take place between insurers and the insured company, and how intelligent maneuvering by managers of the insured company can secure a better deal for the company. The case is situated in a Developing nation setting, so the practices by insurance companies, as far as group health insurance is concerned in such a setting, will also be exposed to the students. The case is aimed at intermediate level undergraduate students and beginner level MBA students. Keywords: Health Insurance, Management Cases, Financial Analysis, HR Manager, Emerging Nations It was a hot afternoon in Dhaka, Bangladesh Prionti Haq, the HR Officer of Loyios School, was deeply absorbed in her thoughts regarding the latest of the many problems that she had to solve over the year 2012 so far had been a hectic year, and the month of October was not proving any different. This time the problem was regarding employee insurance. As usual, the CEO wanted some analysis and a recommended course of action within the next week LOYIOS SCHOOL Loyios was a highly prestigious international and co-educational day school founded in 1999. The school could accommodate students from Playgroup to Grade 12 and provided a high-quality international education for both the local and the international community. This International Baccalaureate World School was offering a well-established, successful and an internationally recognized cumculum for children aged 2-19. By the middle of 2012 the number of students was 704 in total of them. 396 were male and 308 were female The programs were divided into three categones - IB Primary Years Program (PYP) 1B Middle Years Program (MYP) and IB Diploma Program (DP). The school had a total of 218 employees comprising of 153 local and 85 expatriate employees II. ANTHONY GOMES Anthony Gomes was the CEO of Lovos School Gomes had a degree in Economics and Polities from Cambridge University and after completing his education in 1967 he joined the world of business. After working in North America for ten years, he spent seventeen years in Asia where, in addition to his business responsibilities, he actively participated in school governance, new school development and advisory bodies on education. He had been Board Chair at various international schools in South and South East Asia. He came to Bangladesh in August 2010 to take over the responsibility of CEO of Loyxos School Although Anthony was a friendly person when it came to professional work he was very firm in his approach He was instrumental in introducing a new salary scale for all lexal staff and an overall expansion of school activities involving the present students as well as the alumni In general his colleagues found him to be an excellent mentor and admired him for his visionary approach III. PRIONTI HAO Pronti a business graduate had been working in Love from February 2010 as the HR Officer With het HR background she practiced the daily HR roles in the organeration that covered a broad range of HIR activities including working with the senior management toute HR policies and procedures Updating 14 days I I Plan Non-Executive Executive Maximum Benefit per member per disability BDT. 150.000 BDT. 200.000 Room Rent BDT. 3.000 BDT 8,000 ICU Limit 14 days All impatient treatment expenses BDT. 100.000 BDT 150,000 Maternity Benefit for pregnancy: Normal Delivery BDT: 20,000 BDT 20.000 Caesarian BDT 40,000 BDT 40.000 Miscarriage legal Ahortion upon discussion upon discussion Hospitalization Premium per Person per Year BDT. 3,750 BDT. 9.825 Age 68-65Upon Upon Discussion Discussion Table 3: Counter proposal from Sunshine Life Insurance in 2012 Sunshine also informed that an additional charge on the premium will be added for the maternity benefit. The plan was not accepted by the Loyios authority So Pronti decided to explore the competitive market She found out another insurance company, Bangla Life Insurance, who were trying to capture the market and would adjust with the client's requirements. So, she contacted Bangla Life and asked what would be their premium according to Loyios' needs. Bangla Life Insurance informed they would provide the exact plan Prianti proposed They would charge a premium per person per year for Non-Executive and Executive category at BDT 650 and BDT 5910 respectively. For the age group 60-65 the premium would be BDT 5.110 and BDT 270 respectively There would also be an additional premium for the maternity benefit which would be BDT 4850 for non-executive employees and BDT 6550 for executive employees Pronti was happy with this offer However she decided that she would give Sunshine another chance as they were working with Loyos for the last seven years) and shared with them the offer from Bangla Life Insurance Sunshine realized they had to provide Loyos with better olier, or else they would lose an important account as Lovios. As a result. Sunshine also accepted Loybos initial proposal and offered that the rate of premium per person per year at BDT 1250 for non-executive employees and BDT 9.500 for executive employees to sweeten the deal they ahe added that there will be ne difference between the premium for employees aged 60 to 65 and that of the others. In addition, they will not charge any additional premium for availing the maternity benefits Inent was quite happy with her negotiation skills as both the offers were much better than what was initially offered by Sunshine. However, she had to recommend one of the options to the Board later this week She finished her preliminary assessment by the end of the afternoon and decided to do a final compechensive analysis in the following morning For now the priority was to start for home as it was already gettine darket and af she made any further delay the notonous traffic jam of Dhaka city will take its full toll on her travel time DISCUSSION QUESTIONS How pendent a deciso it muv luve been for Sunsune offer the same premium for employees and different age groups Evaluate the started wear and come up with a recommendation on which of the pohoies Pront should propose to the management 13 What are the major factors that should have been considered by Pront to choose one policy over another 10 What role could the maternity henetit plan in the decision making criter ABSTRACT: This case deals with two counter proposals offered to an organization by two competing insurance companies. The case will expose the students to health insurance packages and also allow them to use their financial analysis capacity. Further, the case will expose the students to negotiations that take place between insurers and the insured company, and how intelligent maneuvering by managers of the insured company can secure a better deal for the company. The case is situated in a Developing nation setting, so the practices by insurance companies, as far as group health insurance is concerned in such a setting, will also be exposed to the students. The case is aimed at intermediate level undergraduate students and beginner level MBA students. Keywords: Health Insurance, Management Cases, Financial Analysis, HR Manager, Emerging Nations It was a hot afternoon in Dhaka, Bangladesh Prionti Haq, the HR Officer of Loyios School, was deeply absorbed in her thoughts regarding the latest of the many problems that she had to solve over the year 2012 so far had been a hectic year, and the month of October was not proving any different. This time the problem was regarding employee insurance. As usual, the CEO wanted some analysis and a recommended course of action within the next week LOYIOS SCHOOL Loyios was a highly prestigious international and co-educational day school founded in 1999. The school could accommodate students from Playgroup to Grade 12 and provided a high-quality international education for both the local and the international community. This International Baccalaureate World School was offering a well-established, successful and an internationally recognized cumculum for children aged 2-19. By the middle of 2012 the number of students was 704 in total of them. 396 were male and 308 were female The programs were divided into three categones - IB Primary Years Program (PYP) 1B Middle Years Program (MYP) and IB Diploma Program (DP). The school had a total of 218 employees comprising of 153 local and 85 expatriate employees II. ANTHONY GOMES Anthony Gomes was the CEO of Lovos School Gomes had a degree in Economics and Polities from Cambridge University and after completing his education in 1967 he joined the world of business. After working in North America for ten years, he spent seventeen years in Asia where, in addition to his business responsibilities, he actively participated in school governance, new school development and advisory bodies on education. He had been Board Chair at various international schools in South and South East Asia. He came to Bangladesh in August 2010 to take over the responsibility of CEO of Loyxos School Although Anthony was a friendly person when it came to professional work he was very firm in his approach He was instrumental in introducing a new salary scale for all lexal staff and an overall expansion of school activities involving the present students as well as the alumni In general his colleagues found him to be an excellent mentor and admired him for his visionary approach III. PRIONTI HAO Pronti a business graduate had been working in Love from February 2010 as the HR Officer With het HR background she practiced the daily HR roles in the organeration that covered a broad range of HIR activities including working with the senior management toute HR policies and procedures Updating 14 days I I Plan Non-Executive Executive Maximum Benefit per member per disability BDT. 150.000 BDT. 200.000 Room Rent BDT. 3.000 BDT 8,000 ICU Limit 14 days All impatient treatment expenses BDT. 100.000 BDT 150,000 Maternity Benefit for pregnancy: Normal Delivery BDT: 20,000 BDT 20.000 Caesarian BDT 40,000 BDT 40.000 Miscarriage legal Ahortion upon discussion upon discussion Hospitalization Premium per Person per Year BDT. 3,750 BDT. 9.825 Age 68-65Upon Upon Discussion Discussion Table 3: Counter proposal from Sunshine Life Insurance in 2012 Sunshine also informed that an additional charge on the premium will be added for the maternity benefit. The plan was not accepted by the Loyios authority So Pronti decided to explore the competitive market She found out another insurance company, Bangla Life Insurance, who were trying to capture the market and would adjust with the client's requirements. So, she contacted Bangla Life and asked what would be their premium according to Loyios' needs. Bangla Life Insurance informed they would provide the exact plan Prianti proposed They would charge a premium per person per year for Non-Executive and Executive category at BDT 650 and BDT 5910 respectively. For the age group 60-65 the premium would be BDT 5.110 and BDT 270 respectively There would also be an additional premium for the maternity benefit which would be BDT 4850 for non-executive employees and BDT 6550 for executive employees Pronti was happy with this offer However she decided that she would give Sunshine another chance as they were working with Loyos for the last seven years) and shared with them the offer from Bangla Life Insurance Sunshine realized they had to provide Loyos with better olier, or else they would lose an important account as Lovios. As a result. Sunshine also accepted Loybos initial proposal and offered that the rate of premium per person per year at BDT 1250 for non-executive employees and BDT 9.500 for executive employees to sweeten the deal they ahe added that there will be ne difference between the premium for employees aged 60 to 65 and that of the others. In addition, they will not charge any additional premium for availing the maternity benefits Inent was quite happy with her negotiation skills as both the offers were much better than what was initially offered by Sunshine. However, she had to recommend one of the options to the Board later this week She finished her preliminary assessment by the end of the afternoon and decided to do a final compechensive analysis in the following morning For now the priority was to start for home as it was already gettine darket and af she made any further delay the notonous traffic jam of Dhaka city will take its full toll on her travel time DISCUSSION QUESTIONS How pendent a deciso it muv luve been for Sunsune offer the same premium for employees and different age groups Evaluate the started wear and come up with a recommendation on which of the pohoies Pront should propose to the management 13 What are the major factors that should have been considered by Pront to choose one policy over another 10 What role could the maternity henetit plan in the decision making criter
