The regulatory body itself is weak

The regulatory body itself is weak

Insurance premium income is still less than 1 percent of the country’s gross domestic product (GDP). The insurance sector has not been able to keep pace with the growing GDP.

Sheikh Kabir Hossain, chairman of the regulatory body Insurance Development and Regulation Authority (IDRA) and president of the Bangladesh Insurance Association (BIA), an association of owners of insurance companies, both acknowledged the current state of the insurance sector. Both are of the opinion that the formation of a strong IDRA or regulatory body is now urgent. Apart from this, it is not possible to take the insurance sector forward.

Musharraf Hossain told Prothom Alo We are focusing on the implementation of bancassurance to bring more people under insurance. The bank has about 100 million account holders. If even half of them are brought under insurance, the premium income will increase several times. Then the fear of canceling the policy will also decrease. Apart from this, initiatives are being taken to introduce insurance products online, corporate agents and brokers, he said.

At the international level, 15 per cent are excluded from the first year of insurance business, and 75 per cent survive. In addition, 5 to 10 percent was canceled in the second year and 5 percent in the third year. But in our country in the first year 55 to 60 percent is canceled, no one gets back the money deposited against the policy.

Mosharraf Hossain said that a way has been found for this, 10 percent of the commission that the agents will get in the first year will be deducted. They will get this 10 percent with 10 percent commission in the second year. This has increased the focus of agents on retaining customers for the second year in a row.

Despite regulating insurance coverage, the regulatory body has scrapped the third party insurance system. As a result, cars are now running on the road without a policy. Asked about this, Musharraf Hossain said that the third party insurance was in Namkawaste. The purpose of the insurance was to get a pass if the law enforcers were caught on the road saying ‘insured’. Car insurance should be mandatory. Regarding the weakness of IDRA as a regulatory body, the head of the regulatory body said, “The body is not only weak, it is the weakest.

Meanwhile, Sheikh Kabir Hossain, president of BIA, an association of owners of insurance companies , told Prothom Alo , “Insurance is an important sector in the financial sector. This sector is not able to keep pace with the growing size of GDP. But the day is coming. One day the insurance sector will be the future of the financial sector. From Least Developed Countries (LDCs) we are moving to Qatar, a developing country. We also need to prepare for developing quality insurance sector for developing countries. According to him, a sector cannot go far if the regulatory body is weak. So the insurance regulator needs to be strengthened. The uncertainty about the appointment of the officers of the company should be removed as soon as possible.

The BIA president said that everything should be covered by insurance and they should be kept under proper surveillance. There is an obligation to insure government property. Many do not. Before constructing a building, one has to get design approval, soil test and fire service approval from RAJUK, as well as insurance.

In terms of contribution to the economy, the insurance sector will one day overtake the banking sector and the capital market, but before that, IDRA needs to be strengthened, said BIA President Sheikh Kabir Hossain.