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Pragati Life Insurance Limited is a leading private life insurance company in Bangladesh which was established in 2000 by a group of young Bangladeshi entrepreneurs. The company started with a paid up capital of Tk 30 million against an authorised capital of Tk 250 million. Now the paid up capital stands to Tk 84 million. Pragati Life Insurance CEO Jalalul Azim in an interview with The Business Post’s Shahin Howlader shared details of insurance sector
Pragati Life Insurance is performing better among the third generation insurance companies. What are reasons behind its success?
Although we emerged as a third generation insurance company in the market, Pragati Life Insurance is leading the market of group insurance services. At present, 75 large foreign companies are working with us who were unwilling to deal with any local companies before. We gained their trust gradually and at the same time we are popular for consumers’ satisfaction in the corporate sector.
Around 99 per cent of group insurances are from corporate level while another prominent scheme is single insurance. In this sector, only a few companies operate business abiding by all the regulations. Our company tries to implement rules whenever the government and the regulatory bodies formulate any regulations.
Insurance companies have to keep its management cost under a specific limit while most of the companies except 8/10 of them were not concerned about limits. Even, our company did not follow the cost limit before 2016, we managed to bring the management cost under a specific limit. We are on the top in delivering customer service while many insurance companies struggle to fulfill their insurance claims due to maintaining excessive management costs.
What problems you faced in business amid the Covid-19 situation?
Demand for insurance claims increased amid the Covid-19 situation, especially claims of health insurances under the group insurance scheme. Although a negative flow prevailed in the insurance sector during Covid-19 crisis, we witnessed a 6 per cent growth. Pandemic situation is still continuing but now we have preparations for many obstacles which were absent earlier. We will progress much further this time using digital technology.
Many people died of Covid-19 in the country. Among them, insurance claims of how many clients were met?
We paid insurance claims of many clients who died from Covid-19. Proposal of another 13 insurance claims including 5 Covid-19 related fatalities will be placed in the next board meeting. Our ‘hospital insurance’ is very much popular. We paid for hospital insurances vastly rather than death insurances.
Currently, the life fund of life insurance companies has a deposit of around Tk 36,000 crore.
What is your opinion about investing this money in the government’s fresh mega projects?
It is possible to implement the government’s many mega projects using the money from the life fund, although there is an obligation to invest a specific portion of the life fund in governments’ treasury bonds.
In my opinion, the government can implement many large projects taking money from this sector as the interest rate of bank deposit has fallen. Government can also utilise the life fund with good returns avoiding different bond markets after formulating a law.
Consumers have a negative impression about the insurance companies because of irregularities in payments of insurance claims. How do you see the issue?
People have negative views about the insurance companies as insurance claims are not paid in many cases. We have to make sure prompt payments of insurance claims, if we want to regain a positive impression. So far, Pragati Life Insurance has been paying its clients in time. I want to suggest the people that not to open policy with companies having bad reputation and inspect the benefits and details of policies before selecting them.
What measures the government should take for the development of the insurance sector?
In the past, third party insurance was mandatory in Bangladesh. As per the government rules, marine and fire insurances are mandatory in many sectors including trade or exports but life insurance is yet to be made mandatory for any sector. The incumbent government has taken several steps including the declaration of National Insurance Day and formation of a separate regulatory body for the development of the insurance sector. So far, the government is doing soothing positive for this sector. Still, I want to lay stress on stronger regulatory authority and recruitment of necessary workforce.
For making skilled workforce, the government can provide training to the unemployed youths. Similarly, this sector also has scope of creating employment and the government can make life insurance mandatory for some cases.
There are some issues which exist in law but yet to be implemented. The government can take measures to implement those laws. The issue of making health insurance mandatory for government officials replacing their medical allowance is yet to be implemented. The government must take necessary measures for making insurance mandatory in the country like other countries.
