The people’s confidence on insurance has increased significantly with the expansion of the sector through policy support from the government over the last ten years, a top executive of insurance sector has said.
In an interview, Meghna Insurance Company Limited (MICL) managing director and chief executive officer Mohammad Abu Bakar Siddique focused on expansion of the insurance sector and risk management in new normal backed by corona pandemic
According to Siddique, the importance of insurance is immense not only for the protection of personal life, but also for the financial security of the asset infrastructure. In our country, except for ‘source and force’, usually none receives insurance services.
“For example, if you take a loan from a bank, you are forced to insure. Insurance is required to drive on the road and there is an obligation of marine insurance for import and export,” he said.
As the main reason behind the low inclusion of insurance in the country, the chief executive of Meghna Insurance said, "Usually our habit is to do nothing without special needs or obligations."
“In the case of insurance, we lack mutual trust and proper knowledge, including education and initiation. Many people say life insurance is insurance. What many people don't know is that through insurance, any industry, including factories, can turn around to get compensation if they are accidentally and financially damaged,” he added.
Referring to the need for insurance for commercial companies, Siddique said, "Most of the privately owned companies in our country are not covered by insurance. If this space can be extended to include insurance, there will be a lot of progress in the insurance business”.
He further claimed that many of us have no clear idea about insurance. In this case, our insurance companies also have a responsibility and public-private initiatives need to be taken to raise awareness about insurance.
Siddique said that the current economic situation is very fragile due to the impact of the corona pandemic.
“The impact of the pandemic has also been felt in our insurance industry. But the hope is that the impact on the non-life insurance industry is much less. In 2020, Meghna Insurance achieved 80 percent of its annual target where all business activities were closed for about two months,” he said.
Meghna Insurance CEO informed that the company earned a gross premium of around Tk 620 million in 2020, with a net profit of Tk 20 million and total assets stood worth of Tk 1 billion.
Regarding the country's insurance sector authorities, Abu Bakar Siddique said the authorities need to keep in mind that they need to work for development as well as regulation of the insurance industry.
“Despite the considerable shortage of manpower in the authority, the present authority has been led by a competent person and we have already begun to reap the benefits of the various positive decisions made by the authority over time,” he mentioned.
In order to take the non-life insurance sector forward, seasoned insurer Siddique suggested that insurance should be made compulsory for self-financed companies as well as insurance companies should gain customer confidence by improving the quality of customer service.
“The present government has already taken a lot of initiatives to increase public awareness towards insurance,”
At present, in addition to the state-owned Sadharan Bima Corporation, there are 48 non-life insurance companies and about 30 thousand people works in the sector.
In this context, Siddique said that insurance companies are playing a big role in eliminating unemployment and in the national economy.
“We know that a large portion of the premiums collected by insurance companies are deposited in banks which play an important role in industrialization and economic development,” he said.
Regarding the third-party motor insurance that came into light recently after an amendment, Siddique said that third party motor insurance has been made compulsory by law in different countries of the world.
“There are good reasons behind this. Although comprehensive insurance carries third party risk, it is very expensive. On the other hand, we know that the price of a car declines every year due to usage, so motor vehicles used for more than 15 years are not usually covered by comprehensive motor insurance,” he said.
Mentioning the reasons behind coming to the insurance profession, Abu Bakar Siddique said : “I feel fortunate to have come to this profession knowing the importance of insurance due to taking professional education and training on insurance.
And when I came to know that the father of our nation Bangabandhu Sheikh Mujibur Rahman also worked in this profession at one time. I feel more honored by that,”.