Changing mindset of people major task for expansion of insurance industry: Imam Shaheen


"Major hurdles for the insurance industry include lack of adequate professional manpower, image crisis and negative mindset of the prospective insuring community to the insurance and its personnel as a whole", said Md. Imam Shaheen, Managing Director and CEO of Asia Insurance Limited in an exclusive interview with Bangladesh Post.

He also feels that failing to attract the suitable manpower in insurance profession, lack of proper campaign or awareness regarding insurance services, inadequate ethical practice and code of conduct for insurance business also pose impediments on the way to smooth expansion of the industry.

In the interview Mr. Shaheen described the present scenario of the emerging insurance, its problems and prospects highlighting the role of IDRA and BIA.

The excerpts of his interview is published here for our valued readers.   

Bangladesh Post: As an expert Insurance careerist how would you evaluate the prospect of the industry and say how the sector can expand rapidly? What policy support, you think, is needed for this?

Imam Shaheen: Insurance industry has good prospect in the economy of Bangladesh. The policy makers within the government and the insurance company should adopt effective measures in order to make good use of the opportunities and to tackle the threats for ensuring a healthy development and expanding the insurance industry. 

For transparency, accountability and protection of customer’s interest, integrated computer software system should be introduced in each insurance company from field level to Head Office. While ensuring of compulsory insurance coverage for all comprehensive motor insurance, all public and semi-public properties and all private high-rise buildings is most essential.  

In order to brighten the image of insurance at ground level, awareness activities can be taken in collaboration with large NGOs working in the country. Apart from this, newspapers, media coverage, drama can be promoted. All the stakeholders should establish a long term relationship based on mutual trust. The regulator should guide, advise, control, support and facilitate the whole insurance industry.

Bangladesh Post: Would you please brief us about the present situation of the country’s insurance industry including the prospect or potential of the non-life insurance sector?

Imam Shaheen: In the present context, Bangladesh Insurance Association and Bangladesh Insurance Forum (organization of the managing directors only) is moving jointly with a view to bring the non-life insurance market in order through fulfilling the provisions in the circulars issued recently for all non-life insurance companies. Especially, the president of Bangladesh Insurance Association along with the Chairmen & CEOs of non-life insurance companies have been taking all possible steps to boost up the insurance market for mutual interest of all concerned in the long run. 

The first and foremost problem for the non-life insurance companies in Bangladesh was the high rate of commission for grasping insurance business which was not feasible and viable for appropriate re-insurance and claim settlement in a short time.

In current situation, the expected growth of non-life insurance business may not be fulfilled. Especially the fire & motor premium growth may fall at the end of year. Overall premium earning growth may slightly be fallen due to decrease of premium rate and commission. In spite of that, there is an ample opportunity or possibility for non-life insurance market if we can explore and extend the scope of general insurance field such as all government & non-government buildings (under City Corporation/Municipality) can be brought under fire & earthquake insurance. The third party motor vehicle insurance may be turned into first party/comprehensive insurance under compulsion. Besides, all concerned are thinking how the crop fields, cattle and micro insurance service can be made popular and viable among all stakeholders. 

Bangladesh Post : In this connection, would you please tell us about the major hurdles you are facing on the way to wider expansion of insurance industry?

Imam Shaheen: Insurance services are sold, not purchased in our country. Human resource is our raw materials. So, the major hurdles for the insurance industry include lack of adequate professional manpower, image crisis and negative mindset of the prospective insuring community to the insurance and its personnel as a whole, failing to attract the suitable manpower in insurance profession, lack of proper campaign / awareness regarding insurance services, inadequate ethical practice and code of conduct for insurance business.

Bangladesh Post:  How would you evaluate the role of IDRA in the country’s insurance industry? What impact does it have regarding the development of life sector insurance?

Imam Shaheen: After starting its operation, IDRA has so far undertaken various initiatives and measures to bring reforms in the insurance sector also to establish discipline and sound business principles in the industry.

Major initiative of IDRA is that it has recently issued a notification to non-life insurance companies asking them to make all kinds of payment or expenditure through banking channel. According to the IDRA notification, non-life insurance companies are on strict binding for maintaining limited banks accounts as prescribed with a view to constrain the malpractice of insurance commission and other discrepancies. 

In order to ensure that the Company's decisions are consistent and in compliance with all laws of the country and for the purpose of monitoring,  all companies are required to send  minutes of meetings of  Board, Management Committee, Audit Committee and Claim Committee.

Moreover, IDRA has instructed to the life insurance companies for quick settlement of the pending claims. In this regard, they time to time visit the insurance companies and even the senior members of IDRA also remain presence at the claim settlement programme. Claim settlements worth thousands of crore Taka have been settled in presence of IDRA team in the recent years.

In order to ensure transparency in acquisition and disposal of fixed assets, IDRA has made it mandatory for Insurance Companies to take prior permission from IDRA before purchasing, selling or transferring any property.

IDRA team is working hard to implement National Insurance Policy phase by phase. Regarding disposal of dispute regarding settlement of claim they have formed "BIROD NISPOTTI COMMITTEE.

We think, with the close supervision of the IDRA, life insurance sector in Bangladesh will see a better future and the image crisis will be gone.

Bangladesh Post: What role the Bangladesh Insurance Association (BIA) is playing to preserve the interest of both the insurance clients and the companies?

Imam Shaheen: Bangladesh Insurance Association (BIA) protects and promotes the vital role of insurance industry and enhances the both of member Company and clients interest for the development of the insurance sector.

The BIA mainly aims to act on behalf of its members both collectively and individually in any matter affecting their interest, to issue tariffs and regulate rating of risks, to approach the government time to time to take steps convenient for the interests of the insurance industry as a whole;

BIA to provide basic course and prestigious seminar/workshop for the professional development in insurance, to ensure internationally recognized legal and ethical practices in the conduct of insurance business, to help in formulating and implementing the insurance acts, guidelines for the development of the sector also to eradicate fraudulence and injustice from the insurance sector and to establish the dignity and respect in the insurance;

For compliance of the instructions of the IDRA, under the leadership of BIA President, Mr. Sheikh Kabir Hossain organized several meetings where all the Chairmen and CEO of non-life insurance companies were present. BIA is very much active and extending their heartiest co-operation to the IDRA Bangladesh for formulation of Rules & Regulation and compliance of IDRA circulars for the interest of all concerned. 

Bangladesh Post: Please let us know about the current asset base, client strength, liabilities, premium and claim position of the ‘Asia Insurance Limited’.

Imam Shaheen: Asia Insurance Limited (AIL) is one of the leading non-life insurance Company in Bangladesh. AIL has an Authorized Capital of Tk.1000 million and Paid up Capital of Tk.470.70 million. Share of the Company are traded in both Dhaka and Chattogram Stock Exchange as ‘A’ category.

Asia Insurance Limited achieved AA- (Double A Minus) credit rating valid upto December 26, 2019 on obtaining A+ (A Plus) credit rating for 6 (six) years consecutively since 2012 as rated by the Credit Rating Information and Service Limited (CRISL) which indicates good financial performance and sound solvency position of the Company having a strong Financial backup to meet with high claim paying ability.

As per the financial statement 2018 the total Assets of the company stands at Tk.161,68,01,682. Gross premium income in 2018 stood at Tk.61,70,32,654 & Net premium Tk.42,22,37,443 and claim paid in 2018 gross amount is Tk.16,48,44,412 & Net amount is Tk.11,67,33,175.