Five companies are dominating Bangladesh’s life insurance industry with more than 66 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 Insurance Development and Regulatory Authority (IDRA) data reveals that the sector’s 33 companies collected Tk 9501.30 crore in premiums between January and December of 2020, and five firms secured Tk 6,301.93 crore of this amount.
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, National Life Insurance, Delta Life, Fareast Islami Life Insurance and Jiban Bima Corporation.
People are now more receptive to getting life insurance for themselves and their loved ones, causing the number of companies joining this lucrative industry to increase over the years, said industry insiders, reiterating that only a handful of firms hold the lion’s share of this market.
According to the IDRA data, multinational firm MetLife collected the highest amount of premiums reaching Tk 2,785.55 crore as of December 2020. The figure is 29.32 per cent of the total premiums collected by life insurance companies during this period.
National Life Insurance is at the second position, collecting Tk 1,179.94 crore in premiums as of December 2020 – which is 12.42 per cent of this sector. Fareast Islami Life Insurance is next by collecting Tk 1,004.39 crore in premiums in the same period – 10.57 per cent of the sector.
Delta Life and Jiban Bima Corporation collected Tk 732.41 crore (7.71 per cent) and Tk 599.64 crore (6.31 per cent) in premiums respectively as of December 2020.
What is the secret of success?
The top companies are dominating the industry by providing superior customer service, especially by paying insurance claims on time, developing fresh products and offering modern insurance policies, industry insiders told The Business Post.
Providing more details, IDRA Executive Director and spokesperson SM Shakil Akhter said, “Some companies are doing very well because they are focusing on upholding the customers’ trust. MetLife is particularly well-reputed for their various modern policies and customer service.
“Similar to MetLife, a number of other local companies have also developed a stellar reputation among their customers. Maybe this is why they are doing pretty well in the life insurance industry.”
Jiban Bima Corporation’s Managing Director Md Zahurul Haque said, “We do not ignore insurance claims like many other organisations. If a person becomes eligible for receiving a life insurance claim, we pay them in time.
“We always remain vigilant in protecting the customers’ rights. In return, our customers put their trust in us. This is the key reason our business is growing.”
MetLife Bangladesh’s Head of Communications Saif Rahman said, “We are pledge-bound to serve our customers. They trust us because of our long standing track record of providing good service and keeping our promises.
“Ensuring a good business practice is helping us stay ahead of others in the life insurance industry.”
What is holding back others?
Discussing the industry, National Life Insurance’s Chief Executive Officer Md Kazim Uddin said, “Achieving and marinating public trust is the most essential component of the life insurance sector. People currently lack trust in this industry.
“The key reason behind this issue is the companies who unnecessarily delay paying insurance claims. But some firms are upholding their hard-earned reputation by paying insurance claims in time. This has helped their business get ahead of the competition.”
He continued, “The majority of life insurance companies are not paying claims. When a company refuses to fulfill ten customers’ claims, they share their negative experience with a thousand others. “Companies upholding their reputation through good customer service are doing well, and those failing to do so are losing customer trust.”
On the issue, Bangladesh Insurance Association President Sheikh Kabir Hossain said, “The companies not doing well in the industry may lack good management, skilled manpower, and good policies.”