BIA for developing new insurance products

Bangladesh Insurance Association (BIA) president Sheikh Kabir Hossain president has called for developing new insurance products to increase contribution of the sector to GDP and making those products mandatory for related sectors.

He said that the contribution of the insurance sector to the GDP is very low due to our non-introduction of new products. The contribution of this sector initiated by Bangabandhu Sheikh Mujibur Rahman should be four to seven per cent.

He made the call while speaking as the presiding over an international seminar on the development of Bangladesh's insurance sector at a hotel in Dhaka on Monday. BIA and India's Birla Institute of Management Technology (BIMTECH) organised the seminar.

Financial Institutions Division Secretary Sheikh Mohammad Salim Ullah attended the programme as the chief guest where BIMTECH Chairman Professor Abhijit K. Chattoraj was the guest of honour.

Among others, Insurance Development and Regulatory Authority of Bangladesh (IDRA) Chairman Mohammad Zainul Bari, First Vice President of BIA Nasir Uddin Ahmed Pavel etc were present on the occasion.

Speaking on the occasion, BIA President Sheikh Kabir said in Nepal, even tomatoes are insured. There is nothing like that in our country. The citizens of different countries are also covered by insurance. Such insurance products should be introduced in our country as well.

IDRA Chairman Zainul said, ‘‘Bangladesh’s economy has posted a modest steady growth of above 7 per cent over the last decade. Despite the economic success story, insurance penetration remains low (0.40 in 2022) and is the lowest in emerging economies across the globe.

‘‘Low insurance penetration in Bangladesh clearly indicates that a protection gap exists, but quantification of the gap is not available. Recently an international consulting firm (Deloitte), under the BISDP, has attempted to measure the extent of the protection gap that exists in Bangladesh. They calculated the life insurance protection gap on the basis of protection needs and the corresponding resources available across each household.

“A similar approach was also used for arriving at non-life insurance protection gap, considering key products of catastrophe, including fire, motor and health insurance.’’

However, the IDRA chairman said the insurance sector of the country is growing slowly.

He said the gross premium income of the insurance sector increased from Tk 144074.93 million in 2021 to Tk. 168147.1 million in 2022.

“It is important to understand the insurance protection gap and identify the sources to combat it. IDRA aims to develop the insurance market in Bangladesh by addressing root level issues in realising the government’s vision of driving up existing low insurance penetration,’’ he said.