Monday, April 29, 2024
Popular Life Insurance is one of the leading life insurance companies in the country. On the occasion of National Insurance Day, the company’s Managing Director and Chief Executive Officer BM Yousuf Ali discusses expectations and current status of the sector with The Business Post’s Shakhawat Hossain Sumon.
What are your comments about newer ventures?
BM Yousuf Ali: I have been involved with the insurance sector for over a decade. No one person can be singled out for what I have seen the businesses doing during this period. Besides, IDRA – the regulatory body for this sector – is not too old.
With only twelve to thirteen years, how much role can the regulatory body play within this short period of time? The fact is the insurance sector has not expanded on par with the rising GDP.
Payment of insurance claims is an important issue. Developed countries explain why our insurance claim payout is less than in many developing or least developed countries. This is the biggest problem for this sector.
However, several new companies have come together in recent times. First- and second-generation companies managed to retain as much business as possible. Some of the third generation firms are doing good business as well.
The new generation of life insurance companies doing business now will settle claims with customers after another 10 to 15 years. As a result, these companies cannot be judged by the fact that they are getting better offices or more customers.
Instead, the pros and cons of the new companies will depend on how much they are able to pay customers after the policy expires.
How do you evaluate IDRA’s role in insurance sector regulation?
BM Yousuf Ali: IDRA is not that old. Previously, this regulatory body was headed by a joint secretary.
Later, the position was promoted, and one person was given responsibility at the level of additional secretary. Later, there was no cadre officer except him in the directorate. I would not say it was bad. They did their best.
This sector became more disciplined to an extent with the way IDRA is currently running.
If a company does not settle any claim, it is called for a hearing. Legal action is taken against any company that shows financial irregularities. These measures are playing an important role in bringing order to this sector.
Those currently serving at IDRA are true outsiders of the insurance sector, but they understand administration very well.
Due to this, the discipline of the insurance sector has improved a lot. As you know, the first chairman, M Shefaq Ahmed, was an actuary. IDRA has progressed step by step under his leadership.
What is your message for customers ahead of Insurance Day?
BM Yousuf Ali: Insurance Day is the main driving force to move the insurance sector forward in this country.
This insurance day is just the way to reach the consumer directly. Considering this importance, Prime Minister and Compatriot Sheikh Hasina has elevated Insurance Day from the "B" category to the "A" category.
This day is observed administratively across the country, keeping in view the insurance day.
On this day, the insurance day rally was held in the district on the initiative of Prashan, and a discussion meeting was held. Companies have an opportunity to inform the public about their activities.
Even if all the insurance companies in the country were to do the work that is done in front of the insurance day, it would take a few years, but it is becoming very easy by keeping one day in front.
Due to the sincere initiative of Prime Minister Sheikh Hasina, bad companies that did not dare go to the customers due to Insurance Day, now have to do it. They also have to hold a rally on the streets to celebrate Bima Divas, ensuring accountability to the people.
As a result, the importance of Insurance Day for the development and advancement of the country’s insurance sector cannot be overstated.
There are many companies that are taking insurance money from customers and not returning it. Customers are going from door to door to the company to get that money back. But because of Insurance Day, those firms are now discussing how to refund the customer's money.
It is not correct to say that all the companies doing business in the country will be good. Some will have very good management, some less so. In this case, new insurance customers should choose their preferred company on this Insurance Day, and protect their investment.
What do you think is the best way to overcome obstacles in the sector?
BM Yousuf Ali: There are many problems in the insurance sector. This is true but not completely. Because there are many problems in the insurance industry, such statements were made 5-7 years ago. Not anymore.
You might say that many companies are still not paying their customers' insurance claims. Yes, it is true. Though some companies are not complying, more than 80 companies are doing business in the country.
Now, if you are asked, name a few companies that do not settle insurance claims. You can easily name two to three companies. Then the rest of the companies are good.
There are more than 80 companies doing insurance business, out of which two to three may have problems. This is an isolated incident in this sector. Bringing this forward does not bring the whole insurance sector into disrepute.
The management of any company, currently in trouble now, needs to be customer-friendly. Policy money cannot be the income of a company. Rather, the premium income against the policy is the liability of the company.
Exceeding the company's management spending limits set by regulators means you are wasting customer money. You have to earn this money in some way and return it to the customer.
When the management realises this, the delay in the payment of insurance claims by the company will be reduced. And when the customer gets the policy money back, there will be no more disruption in this sector.
