“The life expectancy of people has increased, after retirement people may live for 20 years or more, so there should be insurance or pension coverage for all so that they don’t have to depend on others after retirement, and here, the insurance is important for people to live with dignity”, said of ‘Guardian Life Insurance’, Md. Monirul Alam in an exclusive interview with daily Bangladesh Post.
He said that it is believed that children will look after their parents, but reality is changing now-a-days, now its nuclear family, sons love parents a lot but they are failing to stay together due to some practical reasons, so insurance or pension scheme is very urgent for them.
Replying to a set of queries, MM Manirul Alam has covered a wide range of the problems, prospects and challenges of the country’s insurance industry. The excerpts of the interview are produced below for the valued readers of ‘Bangladesh Post’.
Bangladesh Post: As we know, the traditional insurance system is facing setbacks or even survival crisis, so diversification or innovation is a must for the industry, how would you evaluate the saying in reference with the existence of Guardian Life?
MM Monirul Alam: Well, you know that our company Guardian Life Insurance also has come up from traditional market; we have introduced retail business, individual business, and corporate business and also have opportunity to do some credit shield business. Although we are yet to get permission, what we have done at the very outset is started preparing network for retail business which takes a lot of time. It needs recruiting of manpower, train them up and then send them into market. So, it certainly takes time to prepare the field, to move up from the grassroots level for retail. Yes, there is some opportunity for corporate business, and doing business like others, the way banks, NGOs are disbursing loans, now if we can bring their loan under insurance protection it will help increase their business at the same time my business as well.
So, coming to innovation, we can say that now we are trying, we have aggregators we have done some business by adding value, by using credit shield with their clients. It does not mean that we have left retail business, our retail business is also growing. We have to move forward by maintaining stability. In the first year we did business of only Tk 11 lakh and we hope that this year it will be about 15 crore, so, it’s growing and it will not be so hard to take it to 30 crore by next year.
In individual life, if we come to calculate the cost it will be in the range of 120 to 140 percent, where will this expense come from? We cover it from the group business. We have introduced health insurance because there is a big demand of health insurance in corporate sector and it’s also a place for proving service quality.
You know people only die once but we become sick many times in life, so we can share the experience through health insurance. Although there is a risk factor because claims become much more in health insurance, still we must say it that it is possible so that we can provide better service to the customer, and people can experience in their lifetime whether our commitment and service is perfect or not. So, we have focused on such types of living benefits.
People no more believe only the words of mouth, rather they want proof. The individual insurance that we sold, many of them have already come to be matured partially, so what we have done, we have settled the claims on time. I believe that the growth of a business depends mainly upon the trust and reputation. If the customer does not trust you, no matter what you do, your business will not grow. We have tried to gain trust of our clients and we feel that we are on the right track. Although our client base is not so big but we have 24/7 call center to support the customer segment. It is very important if we want to know what the customers want; we can find it out through the feedback of call center. They express their demands and expressions to our call center attendants, we are also trying to render the demanded services in the shortest possible time. Here, the capability of the man responsible to provide the service is very important which in turn reflects on the capability of Guardian Life. If the particular personnel at the call center fail to fulfill the commitment, it indicates the failure of Guardian Life. So, building capable workforces, inspiring them to provide adequate service and to create that level of responsibility, all these are very much challenging. Bangladesh Post: What are you evaluations about the micro insurance?
MM Manurul Alam: Micro-insurance mainly means where the premiums are deposited on monthly basis, these are small scale insurances but are under yearly premium, they are covered by macro level of insurance. The prospect of micro-insurance is very bright in our country. Although rich people are buying insurance and we are also targeting affluent segment of the mass to sell our policy, but in fact, they have no necessity of insurance because they are well off in all respect. It becomes a sort of obligatory sell or sometimes they do it for income tax coverage etc. But it is needed mainly by the grassroots people because in absence of the main earning the whole family falls in danger. Micro-insurance opportunity is better in our country because people have less capacity to pay insurance premium. If we ask somebody to pay Tk 24,000 a year it rounds off as Tk 2000 monthly, so it is easy for many to afford it but if it is said to pay Tk 24,000 at a time it becomes a burden for them. Now, we are running some micro programmes with some NGOs and premium for them is very less, I mean the yearly premium is only Tk 300 to 600 and this is so easy to afford for the rural people. We now have around 1 crore clients of micro credit across the country. Out of these we settle around 20,000 claims a year. We settle claim of around Tk 100 to 110 crore every year. So this amount of money has gone to the poor village people of the country, who had no financial risk coverage at all in the past. Now people understand it. We have been working in
SEE PAGE 11 COL 2 Insurance is important for people to live with dignity collaboration with leading NGOs including BRAC in micro insurance field. Around 3 to 4 crore people in the country are depended on the micro credit, so if we are able to bring this number of people under micro-insurance coverage then it is possible to cover 4 crore people through this process. If we go for selling these through our agents it will be difficult because we have to pay commission to the agents and if we do it through NGOs it is much less costly. It just needs a trust and a partnership.
Bangladesh Post: Now please brief us how the country’s overall insurance industry is going on?
MM Manirul Alam: Now an individual insurance regulatory authority is working in the country, the body is working actively and we, the companies are also working, the IDRA has been trying to advise us that if we want to do sustainable business we must do ethical business. Wrong-doing would lead us to failure in sustainable business. At the CEO level, Board level of the companies all have understood that business has to be done in ethical way maintaining all compliances.
The IDRA has been successful to convince us and now the quality of insurance business has improved remarkably day by day. Earlier we had no bank assurance but now the government is thinking about it, bank assurance means selling insurance policy through banks, insurance proposals will be given to people through banks because people trust bankers much more so they will be able to sell more policies.
Now there is no pension system for the private service holders, but a pension plan is essential for everyone. The life expectancy of people has increased, after retirement people may live for more 20 years or more, so they do not have to depend on others after retirement. Insurance is important here for living with dignity after retirement. We may believe that our children will look after us, but reality is changing. Now-a-days, there are more nuclear families, but family members are failing to stay together due to some practical reasons, so insurance or pension scheme is needed much here.
So, insurance is such a plan that will give you mental peace for the whole of your life.