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Bangladesh’s insurance sector has unlimited possibilities for development and growth. The basic role of insurance is managing the risks and also protecting the economy for the country’s growth and prosperity.
At present, 81 insurance companies operate their activities in Bangladesh. This includes 35 Life Insurance and 46 Non-life Insurance. The contribution of insurance companies to the GDP of Bangladesh is less than one percent (currently is about 0.50 per cent). An increase in the penetration rate can create widespread benefits and protection for the economy and it is estimated that 1 per cent increase in Bangladesh’s insurance penetration rate can reduce uninsured losses and markedly contribute to its GDP growth. According to world bank statistics, out of 1000 people only 4 people in Bangladesh have Life Insurance policies which is one of the lowest country penetrations in the world. Even for the Non-life Insurance has a negligible contribution. Currently the government has put emphasis on this very high potential of insurance business. We, working in the sector, are also very optimistic that the government has taken various initiatives with priority and understood the necessity of the insurance industry and brought it under the Ministry of Finance which was earlier under the Ministry of Commerce. The Parliament passed “The Insurance ACT, 2010” and “The Insurance Development & Regulatory Authority (IDRA)” was formed under this act during the Year 2011. The Authority is working for systematic development and regulations for the insurance industry with a view to implement “The National Insurance Policy 2014”. In this priority, the Government has announced “The National Insurance Day” to be celebrated on First March in every Year.
Bangladesh sees its future planning with a vision and policy to build a digitally enabled, smarter, and more sustainable country. It aims to leverage the power of technology to improve the quality of life for all citizens, create new economic opportunities, and drive sustainable development. Building Smart Bangladesh by 2041, will be achieved by establishing Smart Citizen, Smart Economy, Smart Society, and Smart Government by 2041. “Smart Bangladesh” focuses on the use of technology and innovative approaches to improve the lives of people and the overall development of the country. The use of advanced technologies, such as the Internet of Things (IoT), Artificial Intelligence (AI), and data analytics are the key transformation to improve various aspects of society, such as healthcare, education, transportation, and governance. Insurance protection for this uptrend growing economy cannot be ignored.
In a recent paper published “Smart Bangladesh Vision 2041: All you need to Explore” describes the initiatives of Smart Bangladesh. It explains that there are a number of initiatives and projects underway in Bangladesh that are aimed at promoting the use of technology and innovation to drive development. These include initiatives in the areas of e-governance, healthcare, education, and transportation, among others. By leveraging the power of technology and innovation, it is hoped that Bangladesh can become a leader in the region and a model for other countries looking to promote sustainable development and progress through the use of technology. The initiatives are as follows:
The government plays a critical role in promoting Smart Bangladesh. It is responsible for creating a conducive environment for the development of the digital ecosystem and providing citizens with access to digital services and technologies. The government is also responsible for promoting the growth of the IT industry and investing in human capital development. The future of Smart Bangladesh is promising. With a comprehensive digital ecosystem in place, the country is poised to become a leader in the digital space and reap the benefits of technology to drive economic growth and improve the quality of life for citizens. The government’s commitment to the vision of Smart Bangladesh, combined with the efforts of private sector companies and citizens, will help the country achieve its goal of becoming a technologically advanced and digitally savvy nation in the global family. And these efforts will be unaccomplished without the protection of Insurance that is seen as basic in the developed countries.
In modern period people use insurance products such as motor insurance, travel insurance, property insurance, medical insurance and various protection under life insurance plans. All life and non-life insurance plans always save people, property, life and health. All insurance types protect people from risk and loss. Insurance sector plays great role in increasing GDP. All premiums collecting by insurance companies effect economic development positively. Besides Insurance effects to balance of payments, financial stability positively and it also increases employment in economy. These factors also accelerate economic growth. For these reasons insurance role in world economy is undeniable, and it considered reliable field of service sector.
Insurance that plays a fundamental protection role in economic development can enable and drive economic activity by protecting lives and property against insurable risks and these are currently found mostly unprotected. In this pace of growth, Insurance companies in Bangladesh have to act as a buffer against adverse events and risks as the invisible glue for protecting the loss of Individuals and Country’s valuable asset. Supporting the promise of Smart Bangladesh, Insurance Companies can take the advantages of Technology and changing Business Process for setting the milestones for the Smart Services. It can take proactive initiatives for inclusion of Technology with customer centric smart approach for a wide rage protection for country’s economy with the following:
Bangladesh is always seen as a country of uncertainty or disaster, causing from economic crisis to climate changes or natural calamities, losses of property or lives, creating vulnerability for people and economy where we totally depend on Government support system. Although, Insurance is the only means to recover from the economic losses that is largely missing in Bangladesh’s economic system and this is due to weak Insurance Protection system. Combining the Smart approaches from Government and Insurance Companies, Bangladesh can ensure the insurance protection of its Citizen, Economy, Society and Government. Insurance companies now foresee the ample opportunities for its growth with the support of digitalization and can ensure the protection of the People and the Economy. We understand that the country has made significant strides in recent years, and its government is now focusing on creating a “Smart” Bangladesh that can compete on the international stage. In its smart approaches, Bangladesh is investing in new technologies and infrastructure, improving education and training, and promoting entrepreneurship. With its large population and limited resources, it is now important for the country to ensure safety-net with insurance protection in order to progress economically. Investing in insurance protection for its people and infrastructure, Bangladesh can fulfill its dream to become a leading nation in the world.
The writer is the CEO of Chartered Life Insurance Company Ltd.
