“Banks and Insurance sectors are twin pillars for economy. Banks can invest money to the people but insurance would protect the properties and money of the people”, said Md. Azizul Islam, Chief Executive Officer of Takaful Islami Insurance Limited in an exclusive interview with Bangladesh Post.
He said the insurance industry has become the vital sector to focus on the country’s economic growth. Insurance is required to make good fortuitous losses, to remove worry and enhancement of credit etc. HGaving more than 31 years of experience in the Insurance sector, Azizul Islam is an Associate of Bangladesh Insurance Academy (ABIA), a Fellow of Insurance Institute of India (FIII) and a Fire Specialist Diploma holder of Insurance Institute of Mumbai, India.
He is a post-graduate with Honours in Public Administration from University of Dhaka. He is alos a graduate of Law from the same university. The excerpts of his interview is produced for the valued readers of Bangladesh Post. Bangladesh Post: Over the years, now it is believed that the Insurance Industry has been one of the very vital sectors to foster the country’s economic growth. What is your evaluation?
Azizul Islam: Bangladesh became a developing country. Infrastructural economic and industrial developments are carried out by both private and public sector simultaneously. All the works are carried out with fund, goods and services. Hence, worry and fear are present. But it should be addressed and reduced. Legal sources of funds are required. Loss Prevention is imperative. Sources of investment funds should be protected. But how all these jobs could be done? It is possible by proper development of Insurance sector and collateral development by banking and other financial works. It is said that Banks and Insurance sectors are twin pillars. Banks can invest money to the people but insurance would protect the properties and money of the people.
So it must have to be believed that the insurance industry has become the vital sector to focus on the country’s economic growth. Insurance is required to make good fortuitous losses, to remove worry and enhancement of credit etc. Bangladesh Post: Now would you please brief us about the present challenges and hurdles on the way of wider expansion of the insurance industry?
Azizul Islam: Major hurdles on the way of wider expansion of Insurance industry are unethical competition, insufficient patronization of government, lack of conscious people, lack of proper entrepreneurship quality in insurance industries, unsustainable and unskilled man power in insurance sector.
Bangladesh Post: How would you evaluate the role of IDRA in the insurance industry and what is its impact particularly on the development of General Insurance? Azizul Islam: IDRA has been organized a bit but not in a befitting manner. Its main programmes are insufficient which is required to control and coordination of the activities of insurance practices. Besides, it could be better, if senior level executives could be professional. For development of insurance sector, proper planning, continuous motivational training etc are required. However IDRA is doing better in comparison to the time as we have passed. They are trying their best to control the unethical corruption.
Bangladesh Post: Now tell us what role the Bangladesh Insurance Association (BIA) is playing in preserving the interest of Insurance Corporation? Azizul Islam: Bangladesh Insurance Association (BIA) is the forum of Insurers. Since insurers are not properly developed, BIA could not developed as much as we expect.
However, the Chairman and some other members are very much sincere and committed to make the insurance sector developed with ethical and moral attitude. BIA is trying to make insurance sector free from unhealthy competition and immoral business practices.
Bangladesh Post: Please tell us how to know about current asset, base client strength, liabilities, premium and claim position of the ‘Takaful Islami Insurance Ltd.?
Azizul Islam: Asset of the company as on 30.06.2019 was … crore and liabilities was … crore only. Premium income of the company for the year 2018 was … crore and claim for the year 2018 was … crore only. Client strength of the company is satisfactory. Sources of business are banks, financial institutions, mercantile groups and renowned business enterprises of the country.
Bangladesh Post: Now tell us about the concept of Islami insurance. Particularly in terms of non-life sector and say what are the basic differences of it with the conventional one? Azizul Islam: Islamic Insurance cover as a form of business in conformity with ‘Shariah’ based on the Islamic principles of Al- Takaful and Al Mudarabah.
Al Takaful briefly means the act of a group of people reciprocally granting each commercial profit sharing contract between the provider (s) of fund for business venture, the company and the individual members of a group of participants who desires to reciprocally guarantee certain loss or damage that may be inflicted upon any one of them. In brief, it may be said that “Takaful” means joint guarantee.
According to Islamic Economist and Insurance persons following things are prevailing in the traditional insurance business:
(A) Al Gharar means uncertainty or ambiguity;
(B) Al …. Means wagering or
(C) Al … means Interest
So, it is cleared that conventional insurance is based on uncertainty or ambiguity and Takaful insurance is a profit sharing business venture. Conventional insurance means a contract through which one party/or persons transfer their/his risks to other instead of some price which is called ‘premium’.