Postal dept to sign deals with life insurers to expand revenue base

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Mahmuda Shaolin
Bangladesh Post Office will strike a series of agreements with insurance companies to collect their premiums in exchange for fees as part of a wide-ranging reform to make the ailing department profitable.
BPO chief Mobassher-ur-Rahman said his loss-making state department is signing 'business partnership' deals with at least three private life insurance companies in an effort to diversify its source of revenue.
Under the deals, some 40,000 postmen in towns and villages would collect monthly and annual premiums from insurance clients spread across the country and deposit them to the company head offices, he said.
"We will sign a deal with a life insurance company by May this year while talks are underway with at least two other companies. We hope once we sign the first deal, more companies would follow suit," he said.
"The partnership would open up a new source of revenue for the department office. It will go a long way in maxi mizing the potentials of our more than 9880 post offices and curtailing its annual losses," he added.
The BPO's foray into the insurance sector follows its array of partnership deals with global money transfer giant Western Union, banks and mobile phone companies, guaranteeing the heavily-subsidised department a new revenue base after decades.
With its traditional parcel, money transfer and letter delivery business in disarray owing to encroachment by private courier and mobile phone companies, the BPO last year embarked on a series of reforms to cut its losses and turn the department profitable by 2010-11.
In some of the smart moves steered by Rahman, the department forged partnerships with 11 private banks including American giant Citibank and global money transfer leader Western Union.
The BPO would use its army of postmen to deliver the money being remitted through these banks and the Western Union in exchange for a minimum charge for every transaction.
The department has also signed a major marketing agreement with the country's largest mobile phone company Grameenphone under which the village postmen would sell GP's call cards, flexiload and connection cards for a monthly retainer.
Rahman, the director general of BPO, said all these agreements would cut down the department's annual losses to around Tk1.00 billion by the end of 2009-10 financial year from Tk 1.96 billion in 2007-8.
"Our partnerships with private companies would lay the foundation for the revival of BPO's fortune in the country. It happened in the West and we hope it will do the same for our department," he added.