Bangladesh has completed 51 years of independence. Fifty-one years of progress as an independent state is not a small achievement. Reaching the milestone of 51 years, the insurance sector has achieved a lot. In the long run we have become quite successful economically. Today we have become recognized in the world as a developing country from a less developed country. In the insurance sector we have also got a far-reaching visionary directive in the form of Insurance Development & Regulatory Authority (IDRA). 1st March recognized as National Insurance Day, which is not available in other sectors of the economy. This is also a huge achievement for us. The sector is continuing to improve gradually through the insurance regulatory authorities.
There was a time when people had a negative view of insurance. Today that is changing exponentially. Now people insure for their own needs. Insurance Development and Regulatory (IDRA) is working for the development of this sector. I believe that if they continue to operate in this way in the future, this sector will play an important role in the country’s GDP. In terms of expectations, we can say that the impact of the insurance sector in GDP is very small. Perhaps this expectation will also add to the account of participation in GDP when our insurance sector acquires a strong position.
Besides, there is still some unhealthy competition in the insurance sector. We should get out of it. For this also the action of the regulatory authority is the need of the hour, by which we can get rid of this unhealthy competition. And to get out of this unhealthy competition, it is needed to include the private insurance sector in the non-tariff market. Each of us will do business according to our merits. Let general insurance Sadharan Bima Corporation (SBC) do hundred percent re-insurance. Let the government have general insurance for the government business. There is no need to give half of the government business to the private sector.
We need to simplify the obligations with general insurance (SBC), so that we can serve our customers with recovery from general insurance. Now our foreign reinsurance facility is half or 50% percent. Here also there is a target mark that where, if it exceeds BDT 400 crore for Fire, BDT 100 crore for Marine-Cargo, BDT 30 crore for Marine-Hull, and BDT 20 crore for other/miscellaneous coverages, I can bring rates from abroad. If it is a non-tariff market, I can get rates from the market on any amount of money. Without tariffs, unhealthy competition will also toper off. So under the open market economy, the rates of non-life Insurance should not be bounded by Tariff but need to be kept open. For that, Insured gets the opportunity to take Insurance coverage at low premium rates. And for that Competitive Price we can provide better services to the Insured in respect of the world underwriting aspect.
Besides, we have to increase grace period to 1 month to deposit the premium, adapting the rules because we have to provide benefits to our customers. If no one pays the premium even after one month, he may be charged for subsequent working days as penalty. If these two things like non-tariff market and 1 month grace time for premium deposit are given, the insurance sector will come to an orderly condition. As a result, I strongly believe that one day the insurance sector will play a vital role in the GDP.
AHMED SAIFUDDIN CHOWDHURY
Chief Executive Officer, Bangladesh General Insurance Company Ltd.
