IDRA needs to build capacity, in terms of issue-based expertise

Question (Q): What are the objectives behind observance of the National Insurance Day?

Answer (A): Our father of the Nation Bangabandhu Sheikh Mujibur Rahman joined the then Alpha Insurance Company on March 1, 1960. This is something of special significance, particularly for the people who are working in the insurance industry. Personally, I also feel proud to be associated with this sector. In view of the importance of the day, the Government has decided to celebrate March 1 as 'National Insurance Day'. There is no doubt that the insurance sector is an important one for a developing country like Bangladesh. Recognising March 1 as the National Insurance Day does highlight the importance the government attached to the development of the insurance industry. I strongly believe that celebration of the 'National Insurance Day' is a giant step forward in increasing both awareness and penetration of insurance in Bangladesh. This day will bring together all the insurance companies, regulators, stakeholders and the people of Bangladesh on the same platform to work together in making the industry more vibrant and self-sustaining.

Q. Do you think the existing manpower and logistics available with the IDRA are sufficient to regulate the industry? If not, what are your suggestions?

A: Currently, the manpower strength of IDRA is 58 and that includes its honorable chairman and members who are serving in 33 life and 46 non-life insurance companies. Though our existing resources are somehow managing with the existing workload, we need more resources to maintain world class quality in regulatory services. My suggestion would be to make the best use of our existing setup first and regularise them. Thereafter we need to identify the gap in resource in various areas. We can engage external expertise for doing that job. Then the next step should be to design the job profiles for the identified gaps so that we can start the necessary processes to finally get on-board the resources at the earliest possible time. In sum, we need more people with subject matter expertise in insurance, finance, actuarial, accounting and legal issues.

Q: Does IDRA collect financial statements from the companies? If yes, is it done on quarterly basis or annually? Do you have enough expertise to analyze those and take actions against the units that fail to comply with rules and regulations?

A: Yes, we do collect the financial statements for the companies on annual basis. As I just mentioned, we don't have adequate people to fully analyze those in stipulated time and take necessary actions on it. We are trying our best to discharge our responsibilities despite having severe shortage of resources.

Q: Do you have any 'grievance cell' to protect the interest of the policyholders as well as shareholders?

A: Yes, we do have such a unit. After my joining I attached the highest importance to claim settlement issues. I have tried to address the grievances of valued policyholders and other stakeholders and protect their interests. At the time of my joining as the chairman IDRA, hon'ble prime minister instructed me to do so. Accordingly, I established an 'Ovijog Cell' (Grievance Cell) wherein all the grievances are being settled quickly.

Q: How is overall status of the industry?

A: There are 33 life insurance and 46 non-life insurance companies in Bangladesh. Total premium income of the insurance industry in 2019 was BDT 13,291 crore (132.91 billion) with an annual growth of 7.3% compared to that of previous year (BDT 12,383). Out of this total premium, 72% collected by life companies and the rest 28% by non-life companies. Total number of live polices of the insurance industry in 2019 was 1210 million. Out of all active policies, 75% were from life companies and the rest 25% from non-life companies. As of 2019, industry had total assets worth BDT 52,253 crore (Tk. 522.53 billion), representing 4.5% growth over that of the previous year. Nearly 78% of that came from life companies. In terms of total investment, it was BDT 38,645 crore (Tk. 386.45 billion), representing 4.2% growth over that of the previous year and 85% of that came from life companies. As of 2019, the total number of people under insurance coverage was two crore (20 million) recording a growth rate of 9.9% from that of the previous year (1.82 crore). Life companies settled 90% of intimated claims in 2019. Around BDT 8000crore ( Tk. 80 billion) was paid as claims by the industry in 2019 out of which 86.7% was from life companies. Insurance penetration (total premiums of the industry as a percentage of GDP) is less than 1% which still very low in Bangladesh.