Home ›› 01 Mar 2022 ›› Special Supplement
There was a time when Bangladesh’s insurance industry operated under laws formulated during the British period, but when the incumbent government came to power, they dissolved the thefn insurance directorate, and established the Insurance Development and Regulatory Authority of Bangladesh in 2011 to further develop the sector. After the formation of IDRA, and formulation of various rules and regulations, discipline is returning to the insurance sector, Bangladesh Insurance Association’s President Sheikh Kabir Hossain told The Business Post’s Shahin Howlader in an interview
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 this 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.
The condition of 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 safest their population. In developed nations, the popularity of insurance bonds far exceeds other ones. They value insurance bonds more than bank guarantees.
Developed countries used money from the life insurance company funds to implement larger mega projects. When the government of such a country works on a national budget, they ask their insurance industry about funds, and then formulate the budget based on the figure.
Under such a system, a government holds the insurance industry’s money, and companies under the sector get dividends. Because of this, the insurance money is not wasted in those countries.
I do not understand why and how our insurance sector is facing neglect. The World Bank provided funds for automation for years, many companies still did not manage to become automated.
The whole sector must be automated, not just the state-owned Sadharan Bima or Jiban Bima companies. If every organ of a person is not equally strong, he does not survive for long. So, a strong insurance industry is 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 challenges did the insurance firms face amid the Covid-19 pandemic, and how did they tackle the crisis?
Non-life insurance firms did not face too many problems amid the Covid-19 crisis, and they were able to conduct operations from home.
But the pandemic caused serious problems for the life insurance companies during that period, as they could not reach out to their customers, and therefore could not collect premiums from many clients.
Such companies are now moving towards digitisation. But general customers in the country are not very experienced with digital methods, so the digitisation process is taking time.
The number of Covid-19 infections in Bangladesh is now dropping. So I believe that the life insurance companies can emerge from their rut.
What should be done to bring the majority of Bangladeshis under insurance coverage?
Insurance firms should continue to introduce new products, pay insurance claims in time, and remain vigilant to protect their clients from harassment or fraudulent behavior. 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. What aren’t others 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.
IDRA plans to re-launch third-party insurance while raising compensation. What is your opinion on the issue?
We are in favour of launching third party insurance, but it is important to know how it will be re-launched, and with what method. The product – which has already been cancelled – featured no facilities for the clients.
The IDRA can consider launching this product with another name instead of using “Third Party Insurance.”
Though I have heard that the regulator is re-launching this product with a new look, I do not know why this move has yet to see the light of day.
What would you recommend to IDRA?
The regulator should take action under 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 empty 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.
What steps should be taken to boost the insurance sector’s contribution to the GDP?
Resolving the problems I mentioned will help boost the insurance sector’s contribution to the GDP. To achieve this goal, it is essential to raise awareness among people centring insurance, develop the overall quality of the sector, modernise the insurance academy, develop new products to meet the country’s demands, and build skilled manpower.
Companies involved in this sector should perform their duties sincerely as well.
