Idra working to establish confidence in insurance sector: Chairman

The Insurance Development and Regulatory Authority (Idra) in Bangladesh is working with the government to identify and resolve problems in the insurance sector, according to its Chairman Mohammad Jainul Bari.

Bari acknowledged that due to the irregularities of some companies, clients are losing confidence in the sector. To address this issue, the regulator has removed directors accused of wrongdoing from the boards of these companies and instructed new managements to clear insurance claims.

He was speaking at a press conference organised at the regulator's headquarters in the capital on National Insurance Day. He said the celebrations will take place at the district and upazila levels throughout the country on 1 March, the theme being "My life is my wealth; if insured, it will be safe."

Prime Minister Sheikh Hasina will attend the insurance day function, which will be presided over by Finance Minister AHM Mustafa Kamal.

The Idra chairman said, "The claim settlement rate in the insurance sector is more than 30%. However, if four to five companies are excluded, the rate will reach almost 90%."

"We have started working with these companies. We have instructed them to settle claims by selling properties, if necessary," he added.

He said that no one is being awarded at the National Insurance Day event this year. Prizes will be awarded to two companies in the life insurance sector and two companies in the non-life insurance sector based on insurance claim settlement.

The Idra chairman said, "Despite many problems in the insurance sector, our premium income rate is increasing every year. The number of insurance claim pay-outs is also increasing. Our life fund is growing. The assets of the companies are also rising. But since we are behind compared to the overall economy of the country, we have an opportunity to move forward."

Mentioning the lack of awareness among people about insurance, he said, "We have not been able to highlight the need for the insurance sector to people. Insurance claims were also not paid properly. So there is a lack of trust among people about insurance."

Stating that there is a tendency to look for alternatives to insurance, the Idra chairman said, "We have not been able to develop insurance plans on time. We do not have enough people with an insurance education. Agents do not know the code of conduct. Now companies have to do marketing on digital platforms since the younger generation is not accepting agents."

More than a half century after the achievement of the country's independence, Bangladesh now has 81 insurance companies, as noted at the press conference. Among them, there are 35 life insurance companies and 46 non-life insurance companies. Both life insurance funds and general insurance assets have grown despite the multifaceted crises of the past few years.

In 2021, the real growth of total insurance premiums worldwide fell to 3.4% amid the crisis caused by the coronavirus pandemic, whereas growth in Bangladesh was 8.3%, which increased to 12.04% in 2022.

About one crore people are connected with insurance in the country, and employment has been given to several lakh people. And new people-friendly and welfare-oriented insurance policies have played a significant role in this success.

According to official statistics, the gross premium amount at the end of 2022 stood at Tk16,812.65 crore. The gross premium for life insurance was Tk11,399.51 crore, while the gross premium for non-life insurance was Tk5413.14 crore.

In 2022, VAT and taxes of Tk1,305.73 crore on premiums earned by life and non-life insurance companies will have been deposited in the government's exchequer.

The total number of insurance claims in 2021 was 30,62,468. Among them, 18,92,992 were life insurance and 19,877 are non-life. Insurance companies settled a total of 19,12,869 claims. In addition, the total amount of unpaid claims is Tk6,559.81 crore.