The insurance sector regulator IDRA is sensitising insurers about diversification of their products and expansion of the product range in a bid to reach out to a maximum number of potential customers, said IDRA Chairman Mohammad Jainul Bari.
He also said the Insurance Development and Regulatory Authority (IDRA) regulating 81 insurers is moving closer to introducing "Bancassurance", which will be the latest addition to the existing distribution channel.
"Apart from that, we are working on framing corporate agent and brokers regulations, these will give a further boost to the industry", the IDRA chief told the FE in an exclusive interview on the eve of the National Insurance Day.
The insurance industry needs a corporate governance framework to ensure good governance in the industry. In this regard, the regulator has framed a draft of corporate governance guidelines, he informed.
"On the eve of insurance day, we introduced the mortality and morbidity table, first of its kind in the history of Bangladesh".
Moreover, to address the policyholders' grievance, the regulator introduced a hotline number so that complaints could be made, if any. It also formed a separate cell to address the complaints on a fast-track basis, he noted.
"Except few exceptions, the insurance industry is growing consistently, but the increase is not proportionate to the growth of GDP.."
The insurance penetration is low in Bangladesh. But it is also true that per capita insurance expense here is lowest in South Asia.
"IDRA is making tremendous efforts to raise the claim settlement rate in a bid to earn confidence of the people".
The IDRA chief said the sector had long been facing such problems. "Due to the relentless efforts of IDRA, some companies have improved their claim settlement and customer care services".
He also said the financial condition, customer-centric approach and infrastructure were the factors affecting the overall customer services. The IDRA was working with an appropriate methodology to address the problem, he disclosed.
"IDRA is working on various issues including solvency margin regulation, risk-based supervision, corporate governance guidelines, accounting framework and other important issues", the insurance regulator boss further said.
"When these regulations will come into effect, the whole industry will change a lot".
Mr. Bari said that the changes would redefine the insurers' accounting system, risk management approach and governance structure.
On ESG (environmental, social and governance) factors, the IDRA chairman said such issues were considered to be vital factors in measuring sustainability of the companies.
"Insurance companies have the responsibility to help society develop and invest in sustainable development. Insurance itself ensures the social safety net which helps create a better society".
Besides, the IDRA currently focuses on the governance component. The insurance sector is still immature compared to other sectors of the financial system in Bangladesh. "We are taking time to include environmental issues in different policies".
On lowering management expenses, Mr. Bari said: "We direct companies to keep insurers' management expenses within the limit as stipulated in the regulations, increase investment return, and recapitalization."
When asked about the fallouts from Covid-19, the IDRA chief said it provided policy support to the insurers in case of any difficulty that could arise and affect the macroeconomic environment.
"The industry's gross premium income rose every year in the last 10 years except in 2020 when the premium income contracted by only 0.89 per cent due to the Covid situation but it bounced back in 2021".
In the last year the premium growth rate was 16.71 per cent and the premium income reached Tk 168.15 billion.
He said, according to available data, the insurance industry was able to absorb the shock resulting from the Covid-19.
"In any given situation, while the uncontrollable factors affect the insurance business negatively, we recommend that insurers find an alternative way to minimising management expenses and maintaining the flow of investment return".
The IDRA chief said: "We would like to convey a message to all that they should know the details about insurance products and choose an appropriate policy that will provide the protection against any future uncertainty in their lives and also make the lives of their beloved ones safer and easier."
He noted that observance of the Insurance Day would help the industry let the people know about insurance and thus help the sector grow.
"On this very day, I wish this sector will grow gradually and create a safer investment avenue for policyholders and shareholders. I express my deepest homage to Father of the Nation Bangabandhu Sheikh Mujibur Rahman, because the National Insurance Day brings back his glorious memory in the insurance sector".
© 2024 - All Rights with The Financial Express