The country's insurance sector is going to launch more affordable insurance products for mass people on the occasion of National Insurance Day, to be celebrated today (1 March), according to the Insurance Development and Regulatory Authority (IDRA).
In a pre-event press statement on Sunday, the IDRA said following the successful launching of two affordable accident insurance policies titled "Bangabandhu Shurokkha Bima" and "Bangabandhu Sportsman Insurance", the insurance sector is now going to float two more – "Bangabandhu Education Insurance" and "health insurance for disabled people".
The insurance sector is celebrating Mujib Year, on the occasion of the birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman, as a mark of respect to Bangabandhu's joining the then Alpha Insurance Company on 1 March 1960.
The finance ministry last year announced 1 March as the National Insurance Day. The day is celebrated through nationwide programmes initiated by the industry, the regulator and the ministry.
The IDRA said the sector has already launched "Bangabandhu Shurokkha Bima", a specialised non-life insurance product under which mass people can get Tk1-2 lakh insurance coverage against accidental death or any organ damage for a nominal annual premium of Tk100.
The state-owned general insurance and reinsurance firm, Shadharan Bima Corporation, is selling the product across the country.
Now, Bangabandhu Education Insurance – to be floated on National Insurance Day – will be piloted by the IDRA itself, under which guardians of children can be under insurance coverage against their risk of death, accidental disability, for an annual premium of as low as Tk85.
In case of death or accidental disability of the insured guardians, the nominee children would receive Tk500 each month as a stipend to continue their education up to their 18th birthday.
Joint Secretary SM Shakil Akhter, an executive director and spokesperson of the IDRA, said the IDRA is piloting the two-year Bangabandhu Education Insurance project. The regulator will pay the premium to the state-owned life insurer, Jiban Bima Corporation, to cover 50,000 children students across Bangladesh and as soon as the product becomes popular, and private sector insurers would float the same.
On the birth centenary of the Father of The Nation, the insurance regulator has also finalised the health insurance scheme for more than 16 lakh handicapped Bangladeshis, which would improve their life significantly.
These all are in line with the government's welfare thoughts and the IDRA is working on innovating pro-people insurance products, which can be appealing to private sector insurance companies too, he said.
Alongside, the IDRA is also continuing a special programme in its office where helpless nominees of deceased insurance clients receive the sum insured from insurers in the presence of regulatory officials.
Prime Minister Sheikh Hasina will speak online as the chief guest at a discussion on Monday to observe the second National Insurance Day.
On the first National Insurance Day last year, the prime minister ordered the officials concerned to come up with more affordable mass insurance products as Bangladesh is one of the countries having the least insurance penetration.
The progress of Bangladesh Insurance Industry
Bangladesh's insurance industry began its journey through the nationalisation of some pre-independence insurance companies after liberation in 1971.
The private sector joined the industry again in the 1980s and there are now 45 general insurance and 32 life insurance companies in operation.
The companies are running more than 7,500 branch offices across the country, mostly by the life insurers, which brought them more than Tk14,000 crore in annual premium that has also doubled over the last decade. Life insurers earn almost double the premium income compared to their non-life counterparts.
Around 1 crore life insurance policies have existent while the number of general insurance policies is over 31 lakh.
The life insurance industry has accumulated assets amounting to more than Tk41,000 crore, while there is Tk12,200 crore in the non-life sector.
"The progress of the industry is remarkable but it is still far behind as per its potentials," said Sheikh Kabir Hossain, president of the Bangladesh Insurance Association (BIA).
A large portion of uninsured people, businesses, economic activities and assets should come under the insurance protection, and the combined efforts by the government, the regulator and the industry are likely to make it happen in the coming years, believes the insurance entrepreneur.
He also said the insurance industry has come through some significant improvements in recent days in terms of transparency, accountability and efficiency.
Regulatory efforts for structuring the activities and commission of insurance agents along with the instructions for companies' asset utilisation is helping the industry do better, he said.
Private sector insurers are also innovating. For example, Green Delta Insurance Ltd, the country's top non-life insurer, has launched some insurance products for farmers where the company has embraced the use of technologies too.
Sheikh Kabir Hossain said the insurance sector needs some push to break through the mass reluctance to pay a premium.
Alongside social awareness campaigns for insurance services, there need government actions.
The law says any factory having 100 workers must have a group life insurance policy under which each employee would enjoy life insurance benefits. A large number of companies are not doing it to save some premium expenses, Hossain said.
"The government needs to enforce the existing laws regarding insurance along with the inclusion of all the potential people, activities and assets under mandatory insurance," said the BIA president.
He also emphasised developing a pool of insurance professionals citing that insurance education and training are still very poor in Bangladesh.
Insurance sector amid the pandemic
Both life and non-life insurance sectors suffered a revenue decline in 2020 for the first time at least in a decade, according to the IDRA.
The lockdown, post-lockdown global slowdown in economic activities hurt the general insurance business in 2020, said Ahmed Saifuddin Chowdhury, managing director of the Bangladesh General Insurance Company, a first generation private sector non-life insurer.
He said mainly marine insurance revenue declined most as fewer ships were in voyages globally in the last year.
However, Bangladeshi companies are strongly back in business as economic activities bounced back, people are better now, said Saifuddin Chowdhury.
"We have two good news, 2020 had a better ending than we all had feared earlier, and at least general insurance industry's premium income in recent weeks surpassed that over the same period a year ago," he added.
Life insurers also suffered a premium income decline in 2020 due to the shutdown and a dent in people's income amid the pandemic.
BM Yousuf Ali, managing director of the Popular Life Insurance Company, said the life insurance sector is yet to reach the level of pre-pandemic premium income as a large number of policyholders are still irregular in premium payment, especially those who suffered income erosion.
Yousuf Ali, also president of Bangladesh Insurance Forum, a platform of insurance executives, believes that the life insurance industry would see a full recovery within the next six months.