The insurance sector in Bangladesh has the potential for rapid expansion and growth despite negative impressions in people's minds, said the Chief Executive Officer of Zenith Islami Life Insurance SM Nuruzzaman.
In an exclusive interview with Bangladesh Post, he said the negative impression of the insurance sector in Bangladesh can be attributed to a lack of awareness among people about the benefits of insurance. As people become more educated and informed about insurance, they are more likely to see its importance and invest in it.
Replying to query on contribution of insurance industry in economic growth, he said Bangladesh is experiencing rapid economic growth, and as the economy continues to expand, people are likely to have more disposable income to invest in insurance products. The government of Bangladesh has taken several initiatives to promote the growth of the insurance sector, including the introduction of new policies and regulations that encourage foreign investment and competition.
Laying due importance on diversification of products, he said insurance companies in Bangladesh are diversifying their products to cater to the specific needs of different segments of the population. For instance, micro-insurance products are gaining popularity among low-income individuals who were previously excluded from insurance coverage.
"The use of technology is also driving the growth of the insurance sector in Bangladesh. Insurance companies are using digital channels to reach out to potential customers and provide them with easy access to insurance products Overall, the potential for growth in the insurance sector in Bangladesh is significant, and the negative impressions in people's minds can be addressed through increased awareness and education" said Mr. Zaman.
He further mentioned that the Insurance companies can focus on providing customer-centric solutions that are tailored to meet the needs and preferences of their customers. By providing excellent customer service and personalized products, insurance companies can enhance customer satisfaction, loyalty, and trust.
Insurers can develop innovative products that are relevant to the needs of the market, such as customized insurance packages that cater to specific industries, new products that cover emerging risks, and more flexible coverage options.
Asking about digital transformation, he mentioned that embracing digital transformation can help insurance companies to streamline their operations, improve efficiency, and deliver better customer experiences. This includes adopting new technologies such as artificial intelligence and big data analytics, to improve risk assessment and underwriting.
"Insurance companies can enhance transparency by providing clear information about their products, coverage, and pricing. This will enable customers to make informed decisions, which will ultimately lead to a more positive reputation for the industry", Zaman said adding that Insurance companies can contribute to the development of society by investing in corporate social responsibility initiatives. This can include supporting community development programs, environmental protection, and disaster response and recovery.
While telling about the Zenith Islami Life Insurance he said Zenith Islami Life Insurance can develop innovative products that cater to the specific needs of different segments of the population. This includes products that are designed to meet the needs of specific industries or professions, as well as products that cover emerging risks.
Embracing digital transformation can also help Zenith Islami Life Insurance to streamline its operations, improve efficiency, and deliver better customer experiences. This includes adopting new technologies such as artificial intelligence and big data analytics, to improve risk assessment and underwriting.
Building a strong brand image can help Zenith Islami Life Insurance to differentiate itself from competitors and build trust with customers. This includes developing a unique value proposition, investing in advertising and marketing campaigns, and engaging with customers through social media and other digital channels.
Providing excellent customer service can help Zenith Islami Life Insurance to enhance customer satisfaction, loyalty, and trust. This includes providing easy access to information, timely responses to inquiries, and efficient claims handling.
The government plays a crucial role in facilitating the insurance business in Bangladesh through its regulatory functions. The regulatory framework helps to promote the growth and stability of the insurance industry, while protecting the interests of policyholders and other stakeholders. Here are some of my impressions about the regulatory roles of the government in facilitating insurance business in Bangladesh:
He observed that the regulatory roles of the government are essential in facilitating insurance business in Bangladesh. By ensuring financial stability and promoting consumer protection, the government helps to build trust and confidence in the insurance industry, which ultimately benefits policyholders and other stakeholders.
IDRA can collaborate with other stakeholders such as insurance companies, industry associations, and consumer advocacy groups to establish best practices, share information, and promote industry standards.
By strengthening the regulatory framework, increasing transparency, enhancing enforcement, promoting consumer education, and collaborating with other stakeholders, IDRA can establish stricter discipline in the insurance industry in Bangladesh. This will help to build trust and confidence in the industry, ultimately benefiting policyholders and other stakeholders.
Insurance companies should implement fair employment practices, such as equal pay for equal work, non-discrimination, and a safe working environment. This helps to promote a positive work culture and retain talented professionals.
Replying to query regarding tax, Mr. Zaman said the government can consider reducing corporate tax for insurance companies to encourage growth in the sector. This can help to increase investment in the sector and improve the profitability of insurance companies. The government can increase tax benefits for life insurance policyholders to encourage more people to take out life insurance policies. This can help to increase the penetration rate of life insurance in the country and promote long-term savings.
He said the government can consider reducing corporate tax, increasing tax benefits for life insurance policyholders, increasing allocation for agriculture and health insurance, and providing incentives for insurance penetration in rural areas to promote the growth and development of the insurance sector in Bangladesh.
"The insurance industry in Bangladesh is still in its nascent stage compared to the developed world, where the industry has a much longer history and greater penetration rates. The sector in Bangladesh faces several challenges, such as low insurance penetration rates, lack of awareness among the public, and inadequate regulatory framework", CEO added.
In comparison to the developed world, the insurance industry in Bangladesh has a low penetration rate, with less than 1% of the population having insurance coverage. In contrast, the insurance penetration rate in developed countries can be as high as 10% to 15%.
Furthermore, the product range offered by the insurance industry in Bangladesh is limited compared to that in developed countries. For example, life insurance and health insurance policies are less common, while motor insurance and property insurance policies are more prevalent. Additionally, the insurance sector in Bangladesh faces challenges related to claims management, fraud prevention, and underwriting practices.
However, the insurance industry in Bangladesh has significant potential for growth and development, given the large population, growing economy, and increasing demand for insurance products. The sector is expected to experience significant growth in the coming years, driven by favorable government policies, increased public awareness, and greater foreign investment.
Zenith Islami Life Insurance Limited is one of the leading life insurance companies in Bangladesh. The company was established in 2013 and is licensed by the Insurance Development and Regulatory Authority (IDRA) of Bangladesh.
As of 2022, Zenith Islami Life Insurance has a strong branch network across the country, with over 55 branches. The company has a presence in all major cities and towns in Bangladesh, which enables it to provide services to a wide range of customers.
In terms of asset base, Zenith Islami Life Insurance has been steadily growing since its inception. As of December 2022, the company's total assets amounted to BDT 37.77 Crore The company's investment portfolio is well diversified, with a mix of fixed income securities, equities, and other investments.
The overall financial performance of Zenith Islami Life Insurance has been strong in recent years. The company has reported steady growth in premium income, net profit, and total assets.