Home ›› 01 Mar 2023 ›› Front
The government is mulling introducing Bancassurance and an announcement in this regard is expected to come soon. Bancassurance will play a vital role in increasing the penetration of the insurance sector and will make the promotion of insurance easier. Bangladesh Insurance Association (BIA)’s President Sheikh Kabir Hossain came up with the observations during an exclusive interview with The Business Post’s Shahin Howlader
What are your thoughts about the National Insurance Day?
The National Insurance Day helps raise awareness among the people, and the day is observed to attract people’s attention towards the subject. Prime Minister Sheikh Hasina is set to inaugurate this important day, which will also boost people’s interest in this industry. The day will also help inform the people about the newer products we have developed. A number of events and fairs will be organised across the country to mark the day, garnering further interest from the people.
On the occasion of this year’s Insurance Day, those who settle insurance claims will be rewarded by the Insurance Development and Regulatory Authority of Bangladesh (IDRA) to encourage the insurance companies.
What is your advice for insurance companies regarding digitisation?
Most of the companies are now moving towards digitalisation. But the common consumers of the country are not much familiar with digital methods. So, the digitisation process is taking time. I believe that life insurance companies need to leave behind the analogue system and move towards digitisation.
The country’s non-life insurance companies did not face much trouble amid the Covid-19 crisis and they were able to manage their operations from home.
But the pandemic created serious problems for life insurance companies during the pandemic time, as they could not reach their clients and therefore could not collect much premiums. The insurance companies have to go fully digital in the era of technology.
Bangladesh’s insurance sector is fragile compared to other countries. What steps are needed to boost this industry?
The more developed a country’s insurance industry, the stronger that country’s economy and the safer their population. In developed nations, the popularity of insurance bonds far exceeds other ones. They value insurance bonds more than bank guarantees.
Developed countries use money from the life insurance company funds to implement mega projects. When the governments of such countries work on the national budget, they ask their insurance industry about funds, and then formulate the budget based on the figure.
Under such systems, the government holds the insurance industry’s money, and companies under the sector get dividends. Hence, the insurance money is not wasted.
I do not understand why and how our insurance sector is facing neglect. Even though the World Bank provided funds for automation for years, many companies still failed to incorporate automation.
The whole sector must be automated, not just the state-owned general life insurance companies. If every organ of a person is not equally strong, he does not survive for long. Strong insurance companies are a must to strengthen the entire sector.
Can you tell us about the steps your association takes to boost public trust in insurance and facilitate payouts?
We do not have any opportunity to take steps in such matters. We cannot punish anyone. We can only provide motivation by organising various events to commend the firms that pay insurance claims on time.
When we receive complaints against a bad firm, we ask them for an explanation. If we find the explanation unsatisfactory, we inform the regulator so that they can take necessary action on the matter. We can only cancel memberships, but we have never done this so far.
What should be done to bring the majority of Bangladeshis under insurance coverage?
Insurance firms should continue to introduce new products, pay insurance claims on time, and remain vigilant to protect their clients from harassment or fraudulent behaviour. Such initiatives will help bring more people under insurance coverage. The number of insurers has gone up over the years, but only a few continue to dominate this market.
Why are the others not doing well?
It is normal that some companies will do well in this sector, and some will not. However, firms that are performing poorly may be suffering from a lack of good management, skilled manpower, and good policies.
What is your opinion about resuming third party insurance?
Insurance policy is mandatory for vehicle movement in any country of the world. I do not understand why the insurance policy is not in operation in our country. Our opinion is in favour of re-introducing the recently cancelled third party insurance. But it is important to know how and in which way it will be re-introduced. Authorities may consider re-launching the product under a different name instead of using “Third Party Insurance”. Although I heard that the regulatory authority wants to re-launch the product with a new look, I do not know why the move has not seen the light yet.
Health insurance is mandatory in many countries. What is your advice about making health policy obligatory in Bangladesh?
The government should make health insurance compulsory in the country. We have realised the significance of health insurance during the Covid-19 pandemic. In addition to ensuring health service to policyholders, this would also expand the insurance sector. Apart from health insurance, fire insurance for multi-storied buildings, insurance for every vehicle should be made mandatory.
What would you recommend to IDRA?
The regulator should take actions in accordance with the full extent of the relevant law regardless of a culprit’s identity. Though IDRA lacks an adequate number of skilled manpower, it should work on fixing the insurance sector’s problems as soon as possible. All regulatory authorities in Bangladesh – such as the central bank, BSEC and UGC – have full commissions. But in IDRA’s case, two of the four seats have been vacant for the last five years. If the government works on resolving the problems faced by the regulator, it will keep the bad people among us in line.
