Home ›› 12 Apr 2022 ›› Front
Islamic insurance sector of the country witnessed an expansion in the past few years due to peoples’ increasing interests in Sharia products and flourishment of Islamic banking business.
Currently, at least 28 per cent of deposit and loan in the banking sector is under the lead of Islamic banks, business insiders said, adding that just like Islamic banking, Islamic insurance will also expand further in the near future.
Reviewing the data from the last five years showed that premium earnings of 11 Islamic life and general insurance companies were Tk 1,070 crore in 2017 while reaching Tk 1,615 crore at the end of 2021 marking 50.93 per cent rise. Besides, the number of companies also increased to 14.
Although premium income of Islamic insurances is rising, it is quite inadequate compared to total premium earning.
In 2017, total premium earnings of Islamic life and general insurance companies was 9.57per cent of the entire insurance sector which increased to 10.77 per cent in 2021, according to the financial report submitted to the Insurance Development and Regulatory Authority of Bangladesh (IDRA) by the insurance companies.
Islamic Life Insurance Companies
The total premium of the life insurance industry was Tk 8,198 crore in 2017, among them, eight Islamic insurance companies’ premium earning was Tk 946 crore which is well-known as ‘Takaful Policy’ and was 11.53 per cent of entire premiums of life insurance companies.
After five years, at the end of 2021, the premium earning of life insurance companies stood at Tk 10,260 crore, among them, the premium of nine Islamic life insurance companies was Tk 1,432 crore which is 10.77pc of total premium of life insurance companies.
Currently, Alpha Islami Life Insurance Limited, Fareast Islami Life Insurance Company Limited, Mercantile Islami Life Insurance Ltd, Padma lslami Life Insurance Limited, Prime Islami Life Insurance Ltd, Protective Islami Life Insurance Limited, TRUST Islami Life Insurance Limited, Zenith Islami Life Insurance Company Limited, Bengal Islami Life Insurance Ltd, and NRB Islamic Life Insurance Ltd are operating Islamic insurance business in the country.
Islamic General Insurance Companies
On the other hand, 46 general insurance companies had Tk 2,981 crore in 2017, among them, two Islamic insurance companies collected Tk 124 crore which is 4.15 per cent of total premium collection of general insurance companies.
At the end of 2021, premiums of general insurance companies reached Tk 4,735 crore, among them, three Islamic insurance companies had collected Tk 183 crore which marked 3.86pc of total premium collection of general insurance companies.
The country has four general Islamic insurance companies - Islami Commercial Insurance, Islami Insurance Bangladesh, Northern Islami Insurance and Takaful Islami Insurance.
Asset and Investment System
Islamic insurance companies had assets worth Tk 55,44 crore in 2017 in the life insurance industry which reached to Tk 5,435 crore at the end of 2021.
On the contrary, in the general insurance industry, Islamic insurance companies had assets worth Tk 188 crore in 2017 in the life insurance industry which reached to Tk 706 crore at the end of 2021.
Besides, in 2018, Islamic insurance companies had an investment of Tk 3,387 crore which increased to Tk 3,433 crore at the end of 2021.
Chief Executive Officer (CEO) of Trust Islami Life Insurance Md Gias Uddin said, “Our owners want to operate business abiding by the Sharia rules so our company has all the necessary system and modules to operate the company according to Sharia.”
There are many people in the society who have a soft corner towards Islamic system and there is one class of people who never want to get involved with interest based activity, he said.
These people are gradually expressing their interests to open policies with Islami insurance companies, he added.
Alpha Islami Life Insurance CEO Nur-e-Alam Siddique said, “Everyone wants to see and inquire about our Sharia board as it is an Islami life insurance company.”
“We have peoples’ trust that the Sharia board of our Islami insurance company is very powerful and we hold sharia meetings every three months and publish it on a website which also spreads in the market. So, we are getting good response from clients in the market,” he added.
Clients choose Alpha Islami Life Insurance mainly due to their religious point of view as this company has transparency, he said, adding that “although Islami insurance companies not doing as good as Islami banks but gradually insurance companies will also march ahead.”
CEO of Islami Insurance Bangladesh Abdul Matin said people are now more conscious in the insurance service and people search for a good company while opening any new policy.
“Any company which is operating properly and transparently will succeed in the business and people open policy considering all these matters,” he said.
Besides, those who are interested in Islami banking also select Islami insurance policies which has also brought positive outcomes for the company, he added.
