IDRA moves to bridge actuarial gap in insurance sector

The Insurance Development and Regulatory Authority (IDRA) has taken steps to address the shortage of actuaries in Bangladesh's insurance industry by developing a skilled workforce to ensure sustainable growth of the industry. 

To this end, IDRA plans to establish an Actuarial Institute, Actuarial Board of Standard Setting, and Actuarial Council, aimed at strengthening actuarial capacity and governance in the sector.

IDRA has already drafted the "Actuarial Ordinance 2025" and once approved by the Financial Institutions Division (FID) of the Ministry of Finance, these three bodies will begin operations.

Dr M Aslam Alam, chairman of IDRA, gave these details today (29 October) at a seminar titled, "Youth Employment in the Insurance Industry: Development and Prospects of the Actuarial Profession" held in Dhaka.

"Sustainable development in the insurance sector is impossible without actuaries. This profession is not only vital for the insurance industry but also provides a strong foundation for risk management across the entire financial sector," observed Dr Alam.

Actuaries use mathematical, statistical, and economic models to evaluate potential financial risks. Their expertise is critical in designing insurance products, setting premiums, and settling claims based on scientific risk assessment. In many developed countries, actuarial science ranks among the most prestigious and highly paid professions. 

Currently, Bangladesh has only four to five actuaries, with just two residing in the country. 

In his keynote paper, Actuary Dr Mohammad Sohrab Uddin, noted: "The insurance industry cannot function effectively without actuaries. At present, companies develop products based on assumptions rather than precise risk analysis. Previous attempts to build actuarial capacity failed because actuaries were undervalued and lacked proper incentives, prompting many to work abroad."

He praised IDRA's initiatives and thought that, with active cooperation from insurers, Bangladesh could significantly increase its actuarial workforce in the coming years.

Afrin Haque, a young actuary based in Bangladesh, emphasised the need to raise awareness about the profession at school and college levels.

Under the Insurance Act 2010, life insurance companies are required to appoint actuaries while general (non-life) insurers do not have this obligation. Dr Sohrab Uddin believes the non-life sector too should appoint actuaries for scientific risk management and better company performance.

President of the Bangladesh Insurance Association Saeed Ahmed, Md Imam Shahin of Asia Insurance, CEO of Popular Life Insurance BM Yusuf Ali and representatives from the insurance sector attended the seminar.