Insurance sector's development potentials
Tuesday, 11 December 2007
Khawaja Mainuddin
MANY insurance companies are operating in Bangladesh. But the overall insurance business has not yet expanded much. The existing companies need to operate efficiently and ethically to create confidence on insurance business. They need to take effective steps to prepare their financial statements accurately. Revenue earnings of the government can rise from the sector if the companies follow ethical procedures. It would also enable the companies to go for expansion with their declared funds.
Ethical operation of the insurance companies can lead to all round gains for all stakeholders. The economy can gain from the investment of resources mopped up by the insurance companies, the government can earn more revenue from them and streamlined operations will create the conditions for further sustainable expansion of the insurance business.
The insurance sector in the country has tapped, so far, only a part of its potential. There is huge scope for the sector to grow but for this to happen, the companies should acquire a clean bill of health for themselves. They should abandon secretive management practices, go for proper disclosures and opt for proper policies to be able to invest their gains or profits by giving up non-transparent methods to help deploy their funds properly to facilitate an accelerated growth of the overall economy
The insurance companies suggest for scaling down the rate of corporate tax which, according to them, is much higher compared to even neighbouring countries. The government should consider this while encouraging the companies to devise ways and means for floating innovative schemes to expand coverage. Those companies doing life insurance business do have a great deal of responsibility in areas of widening their client base and attracting savings of the people. Many middle-class savers in the country do not yet appreciate the need for insurance coverage. If the insurance companies can properly target them for expanding their business and also if the regulatory body can create confidence among such savers about the safety and reliability of their surplus funds being used for getting insurance coverage, that will lead to greater benefits for the economy.
MANY insurance companies are operating in Bangladesh. But the overall insurance business has not yet expanded much. The existing companies need to operate efficiently and ethically to create confidence on insurance business. They need to take effective steps to prepare their financial statements accurately. Revenue earnings of the government can rise from the sector if the companies follow ethical procedures. It would also enable the companies to go for expansion with their declared funds.
Ethical operation of the insurance companies can lead to all round gains for all stakeholders. The economy can gain from the investment of resources mopped up by the insurance companies, the government can earn more revenue from them and streamlined operations will create the conditions for further sustainable expansion of the insurance business.
The insurance sector in the country has tapped, so far, only a part of its potential. There is huge scope for the sector to grow but for this to happen, the companies should acquire a clean bill of health for themselves. They should abandon secretive management practices, go for proper disclosures and opt for proper policies to be able to invest their gains or profits by giving up non-transparent methods to help deploy their funds properly to facilitate an accelerated growth of the overall economy
The insurance companies suggest for scaling down the rate of corporate tax which, according to them, is much higher compared to even neighbouring countries. The government should consider this while encouraging the companies to devise ways and means for floating innovative schemes to expand coverage. Those companies doing life insurance business do have a great deal of responsibility in areas of widening their client base and attracting savings of the people. Many middle-class savers in the country do not yet appreciate the need for insurance coverage. If the insurance companies can properly target them for expanding their business and also if the regulatory body can create confidence among such savers about the safety and reliability of their surplus funds being used for getting insurance coverage, that will lead to greater benefits for the economy.