National Life Insurance is one of the leading life insurance companies in Bangladesh. On the occasion of National Insurance Day, the company’s Chief Executive Officer Kazim Uddin discusses the expectations and current trends in the sector with The Business Post’s Shakhawat Hossain Sumon.
How would you evaluate the insurance industry?
Kazim Uddin: It is definitely a matter of pride and honor. Any national day is associated with the glory, dignity, and honor of the country.
Prime Minister Sheikh Hasina honored the insurance industry by declaring March 1 National Insurance Day in memory of Father of the Nation Bangabandhu Sheikh Mujibur Rahman.
With this, I think the neglected insurance industry has reached a respectable place. And as a worker in this sector, insurance day holds special importance for me.
What is the aim and purpose of Insurance Day?
Kazim Uddin: Insurance companies have taken various initiatives around this day.
In particular, under the direction of financial institutions and IDRA of the Ministry of Finance, different activities, including processions, distribution of leaflets, and discussion meetings, are being conducted to create awareness about insurance among the people.
This increases public confidence in insurance. So I think, due to the observance of Insurance Day, there is a positive impact in this sector.
Do you think public confidence, trust in insurance have increased?
Kazim Uddin: Once upon a time, insurance companies used to collect premiums through handwritten receipts. In some cases, this complicated customer service. But times have now changed. Insurance companies in Bangladesh are also going digital.
A digital receipt is now being given for premium payment. That is, as soon as the customer submits the premium, a SMS is sent to his/her mobile phone, providing policy information to customers through IDRA and SMS.
In this way, the customer can be sure about the deposit of his premium. As a result, trust is increasing, along with disbelief.
Why are Bangladeshis unwilling to take insurance?
Kazim Uddin: Although a country with a huge population, the rate of insurance customers in Bangladesh is very low. About 5 per cent of our total population is covered by insurance. The contribution of insurance to the gross domestic product (GDP) is only 0.45 per cent.
In the developed world, this rate is close to 100 per cent. The insurance contribution to the GDP of our neighboring country, India, is also 4.2 per cent. This rate is quite satisfactory in other countries, including Nepal and Thailand.
Lack of customer confidence and awareness is the major reason behind the backwardness of the insurance sector in our country. A lack of proper knowledge about the benefits of insurance, and negative campaigns or disinformation, is holding the sector back.
Due to this, the desired expansion of the insurance industry in Bangladesh has not taken place. Many people are not interested in taking out an insurance policy.
With the formulation of the Insurance Act 2010 and National Insurance Policy 2014, ensuring the accountability of insurance companies, and observing National Insurance Day across the country under state initiative, public confidence in insurance is increasing.
What’s your assessment of insurance claim payouts?
Kazim Uddin: One of the objectives of Insurance Day is to encourage the payment of insurance claims. Insurance claim settlement not only benefits the concerned customers, but the entire insurance industry as well.
Timely payment of insurance claims increases the interest and confidence of the general public in insurance. For this, the companies have to take measures to pay insurance claims quickly after the expiration date.
Claims should be settled expeditiously and without delay. It should be specifically noted that National Life paid claims of Tk 1,093 crore in 2023. As a result, in 2023, we will be able to earn a total premium income of Tk 1,864 crore.
Can you tell us more about your organisation?
Kazim Uddin: At the end of 2023, the number of insurance policies sold by National Life is 6,459,730; the total premium earned is Tk 16,846 crore, the life fund is Tk 5,276 crore, and the investment is Tk 5,296 crore.
The majority of our life funds are invested in government treasury bonds. Life fund money has been properly stored for the last 39 years to maintain the company's financial base and ability to pay customer claims.
National Life has never experienced a financial crisis in the past, nor is it likely to do so in the future. The Life Fund is growing at a significant rate every year. This is why National Life stands on a strong financial footing today.
