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Life insurance premium collection in the country grew by a massive Tk 1,135 crore or 11 per cent last year owing to a surge in client confidence in some of the sector’s leading companies.
Total premium collection in the country’s life insurance sector stood at Tk 11,395 crore at the end of 2022, which was Tk 10,261 crore at the end of 2021, reveals the final accounts of the life insurance companies filed by the Insurance Development and Regulatory Authority (IDRA).
Industry experts attribute the growth to an insurance boom during the Covid-19 pandemic.
In 2022, among the 35 public and private life insurance companies in the country, premium collections increased in 26 firms and decreased in 9 firms, reveals the IDRA data.
“People realised the importance of insurance during the Covid-19 pandemic. Most of the insurance companies also stood by their clients. As a result, insurance penetration has increased,” SM Shakil Akhter, former executive director of IDRA, told The Business Post.
He added, “One of the reasons companies that are doing so well in the premium business is because they have been able to retain the trust of their customers. These companies have built an impressive reputation among their customers in the post-Covid period.
“Maybe that is why they are doing so well in the life insurance industry.”
5 firms holding 61% of industry
Five companies are dominating Bangladesh’s life insurance industry with more than 61.25 per cent of the market share, indicating that the majority of such firms are yet to solidify their presence in this sector.
An analysis of IDRA data reveals that the sector’s 35 companies collected Tk 11,395 crore in premiums between January and December of 2022, of which, five firms account for Tk 6,980.20 crore.
The IDRA data – collected from unaudited financial reports submitted by the life insurance companies last year – shows that the top five industry players are MetLife Bangladesh, National Life Insurance Co Ltd, Delta Life Insurance Company Ltd, Jiban Bima Corporation (JBC) and Popular Life Insurance Company Ltd. Among the top companies, MetLife alone collected Tk 3088.16 crore as premium as of December 2022, which is 27.10 per cent of the total premium collection by life insurance companies during the period.
National Life Insurance stands at the second position, with a collection of Tk 1607.87 crore or 14.11 per cent of the gross premium collection. Delta Life Insurance ranks next with a collection of Tk 847.47.
Meanwhile, Jiban Bima Corporation and Popular Life Insurance collected Tk 761.02 crore and Tk 675.68 crore in premiums respectively as of December 2022.
Why are top firms doing better?
According to industry insiders, a few companies are dominating the industry by providing superior customer service, especially paying insurance claims on time, developing new products and offering modern insurance policies.
“We are committed to serving our customers. They trust us because of our long track record of delivering good service and keeping our promises,” said Saif Rahman, Head of Communications, MetLife Bangladesh.
“Ensuring a good business practice is helping us stay ahead of others in the life insurance industry,” he added.
Meanwhile, former managing director of JBC Md Zahurul Haque said, “JBC does not ignore insurance claims like many other organisations. If a person is eligible to receive life insurance claims, we pay them on time.
“JBC is always vigilant in protecting the rights of customers. In return, customers put their trust in us. This is the main reason for the growth of our business.’”
Why are others failing?
One of the reasons why companies are doing well in the insurance business is that they have earned the trust of customers by settling their insurance claims on time, according to National Life Insurance Chief Executive Officer (CEO) Md Kazim Uddin.
He said, “Getting and preserving public trust is the most essential element of the life insurance sector. Currently people lack confidence in this industry.
“The main reason for this problem is that some companies unnecessarily delay the payment of insurance claims. But some companies have retained their hard-earned reputation by paying settling the claims on time. This has helped them to stay ahead in the competition.
Kazim Uddin said most of the companies are not settling the claims.
“When a company refuses to fulfill its commitment to 10 clients, those clients will share their negative experience at the company with thousands of others. Hence, clients are losing confidence in those companies. That is why these companies are not doing well.”
