Home ›› 06 Jan 2022 ›› Front
Aiming to boost the country’s economy, marine insurance has been offering an easy and comfortable solution to recover damages of import and export related goods and vessels caused by accidents in waterways.
During the Covid-19 pandemic, around 46 non-life insurance companies earned Tk 1,401 crore by marine insurance while among them only 10 companies earned Tk 761 crore marking 54.32 per cent of the total income from the head.
According to the data of Insurance Development and Regulatory Authority (IDRA) collected from unaudited financial reports submitted by the life insurance companies last year showed that the top ten players in this sector were Sadharan Bima Corporation, Green Delta Insurance, Pragati Insurance, Pioneer Insurance, Reliance Insurance, Provati Insurance, Union Insurance, Global Insurance, Northern General Insurance and Agrani Insurance.
Until December 2020, Sadharan Bima Corporation was on the top of the list in case of premium collection, IDRA said. The organisation collected Tk 286.74 crore which is 20.47 per cent of the total marine premiums collected by the non-life insurance companies.
Besides, Green Delta Insurance was residing on the second place collecting Tk 91.47 crore marking 6.52 per cent of the total premiums. Pragati Insurance was dominating on the third place collecting Tk 82.16 crore in premiums (5.85 per cent) in the same period. Pioneer insurance and Reliance insurance collected Tk 75.05 crore (5.35per cent) and Tk 68.07 crore (4.85 per cent) premium money respectively.
Apart from them, Provati insurance, Union insurance, Global insurance, Northern General insurance and Agrani insurance collected Tk 47.87crore (3.41 per cent ), Tk 33.34crore (2.37 per cent), Tk 31.10crore (2.21 per cent), Tk 30.57crore (2.18 per cent) and Tk 14.92crore respectively.
Marine insurance transfers the liability of the goods and water vassals from the parties and intermediaries involved to the insurance company. The exporter, instead of bearing the sole responsibility of the goods, can buy an insurance policy and get coverage for the exported goods against any possible loss or damage.
Marine insurance is necessary to meet the contractual obligations of exports. To align with agreements the exporter needs to take marine insurance to protect the buyer’s or their bank’s interest and honor the contractual obligation. Under the Marine insurance, companies issue two types of policies -- Marine cargo insurance and Marine hull insurance, with separate amounts of premiums.
Marine Cargo Insurance
This insurance is associated with the transit of cargo or commodity from one place to another. The importers and exporters are the principal users of this insurance. The import and export of goods into and from Bangladesh are basically carried out by sea, air, road and rail.
Marine Hull Insurance
This is available for the vessels plying within the territorial waters of the country under Inland Time Clauses. The cover is also available for the ocean-going vessels under the Institute Time Clauses.
Marine insurance is often compulsory in many export trade contracts. It can be the obligation of exporters or importers to pay the insurance cost on the shipments, depending on the terms of their contract.
Why are Marine schemes witnessing progress?
IDRA Executive Director and Representative SM Shakil Akhtar told The Business Post that some insurance companies are doing successful business as they focus on their clients’ trust.
Many companies have sustained their popularity from the beginning by adopting different modern policies and paying insurance claims in due time, he said, adding that, “So, non-life companies of marine business came to the fore compared to other companies.”
“We had a large market in the third party insurance sector that was later scrapped and still, we are also among the top companies of marine insurances,” said Pioneer insurance CEO Khaled Mamun.
Growth in this scheme depends on import and export of insurance company’s clients, he said, adding that, “Insurance business also shoots up when import and export rise abruptly. During the past two years, Covid-19 has had an adverse impact on the Import-export which potentially affected other insurance companies amid the pandemic.”
AKM Ihsanul Haque, director of Sadharan Bima Corporation said, “Our premium in marine insurance is comparatively higher than other companies as it is mandatory to open marine policies through Sadharan Bima Corporation for all import-exports of the government.”
Ihsanul Haque said, “Currently, importers and exporters open marine insurance policy in exchange of certificates keeping in mind that they won’t get their insurance claims. Market size of this scheme would expand further and clients could get their insurance claims if every company opens policies accurately.”
Under the marine policies, 95 per cent of importers take low-cost cargo insurance policies aiming to save money, he said, adding that the government could get more revenues while premium business of insurance companies could flourish if marine insurances were opened properly.
