Stakeholders raise alarm as 10 life insurers running without CEOs
Of the 35 life insurance companies in the country, 10 are operating without permanent chief executive officers (CEOs) and are being run by acting executives, stakeholders said, raising concerns about this leadership gap.
At a seminar titled "Insurance Sector Reforms and What We Can Do" at the IDRA office today (12 March), they attributed the issue to many companies being granted licenses for political reasons without developing a skilled workforce to support them.
Additionally, the Insurance Development and Regulatory Authority (IDRA) is facing a manpower shortage. The agency lacks sufficient officers to oversee the operations of 82 insurance companies, leading to a noticeable gap in monitoring, which has raised concerns among industry stakeholders.
IDRA Chairman M Aslam Alam attended the seminar, jointly organised by IDRA and the Insurance Reporters Forum (IRF), as the chief guest. IDRA members, CEOs of life and non-life insurance companies, and journalists covering the insurance sector were also present.
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The event, chaired by IRF President Gazi Anwar, featured two presentations. Md Jalalul Azim, CEO of Pragati Life, presented on the life insurance sector, while Brig Gen Shafiq Shamim, CEO of Sena Insurance, presented on the non-life sector.
In his paper, Jalalul Azim pointed out that many insurance companies are failing to settle valid claims, with some unable to pay due to financial issues, leaving customers facing prolonged delays and complications. Even companies that settle claims regularly are under pressure, negatively affecting the sector.
He recommended that claims be settled quickly and without hassle, and companies causing delays should be compelled to pay. He also suggested that insolvent companies should sell assets to pay dues, and those with no assets should be held legally accountable.
Azim also noted that many companies were licensed for political reasons without proper scrutiny, leading to stagnation in the sector and a decline in insurance penetration, which is concerning for the economy.
In his speech as the chief guest, IDRA Chairman M Aslam Alam criticised the flawed insurance law, which favors insurers and weakens the IDRA. He highlighted the need for IDRA empowerment, as current laws allow suspended individuals to return through court orders.
He also pointed out that insurance companies often provide inaccurate or fabricated data, hindering decision-making. He emphasised that digitisation could reduce 85% of irregularities. Despite efforts, the IDRA faces a lack of cooperation.
Aslam Alam said that while digitalisation could help, having an adequate workforce would also make a difference. However, the IDRA is operating with limited staff and technology.
He assured that work is underway to improve the insurance sector, but it will take time and cannot be achieved overnight.
Regarding outstanding insurance claims, he mentioned that the IDRA lacks the authority to sell shareholders' assets to settle claims, which requires going to court. Several cases are currently ongoing.
He added that unless unresolved claims are settled, public trust in insurance will not improve, but good governance can help build that trust.
Brig Gen Shafiq Shamim, CEO of Sena Insurance, emphasised the need to eliminate unhealthy competition and establish a cooperative insurance system in Bangladesh.
He called for adopting a 0% commission policy and abolishing the agency system in non-life insurance to prevent misuse.
He also urged IDRA and insurance CEOs to actively implement these changes.
Shamim said that the large number of insurance companies fosters unethical practices, and IDRA must take decisive action to consolidate weaker companies, directing their boards and management to swiftly implement decisions.
