Insurance in Bangladesh

 

1.0 Introduction

Insurance is essentially a collective endeavor under which a large number of individuals agree to share the loss which a few of them would incur in future. This means insurance protects those unfortunates who suffer heavy financial impact of anticipated misfortunes by distributing the loss among many who are exposed to the risk of similar misfortunes. General insurance is a type of insurance in which one person makes regular payments so that he receives recei ves a sum of money different different types of accident accidental al loss. The process insur insurance ance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and useful in modern moder n affairs. affairs. Not only does it serve the loss / damage damage of any losses it also provide finan financial cial benefits to the individual for death death or at the end of a time period . 1.1 Background of the study

This report has been prepared as requirement of the insurance and risk management course. The report was based upon the overall insurance companys problems and course. The report was based upon the overall insurance companys problem and prospects in !angladesh .I was duly approved by our course teacher "d. "u#ibul $ouque. This report will help us to know the insurance business problem and prospects 1.2 Objective of the study

The key ob#ectives of the studies are to identify the problems and prospects of the General insurance in !angladesh. The other ob#ectives of this study are to generate some suggestions to overcome the problems identified so as to ensure smooth functioning and growth of insurance. To know about the best practices of insurance of !angladesh is also another ob#ective of this study. 1.3Literature Review

%ninsured risk leaves poor households vulnerable to serious or even catastrophic losses from negative shocks. It also forces them to undertake costly strategies to manage their incomes and assets in the face of risk& lowering mean incomes earned. 'elfare costs due to shocks and foregone profitable opportunities opportunities have been found to be substant substantial& ial& contributing to persistent poverty !ordu !orduch" ch" 1##0$ %ercon" 1##&" 200'$ Rosen(weig Rosen(weig and Binswa Binswanger nger"" 1##3$ )*bers et a*." 200+" ,an" 200-.  Insurance has the potential to reduce these welfare costs.

!y offering a payout when an insured loss occurs& it avoids other costly ways of coping with the shock leaving future income income earning earning opportunit opportunities ies intact. intact. (urthermor (urthermore& e& the security linked to being insured can be expected to allow the avoidance of costly risk)management strategies with positive impacts on poverty reduction. This literature review provides an overview of the current state sta te of resear research ch on Insura Insurance nce identi identifie fies s key knowle knowledge dge gap gaps s and develo develops ps a concep conceptua tuall

 

framework to inform and organi*e the research agenda of the insurance (acility in the area of  impact evaluation& demand and supply issues. (or the purpose of this review& Insurance is defined in line with +hurchill ,-0 as an insurance that ,i0 operates by risk)pooling ,ii0 is financed through regular premiums and is ,iii0 tailored to the poor who would otherwise not be able to take out insurance. The main focus of the literature review is on voluntary insurance1. 2ther ways through which individuals or the public sector can insure against risks& such as precautionary savings& access to credit or through public safety nets are therefore not treated in detail in this review. $owever& this leads already to one key omission in the existing literature3 generally& the the benefits of insurance are not compared to alternative mechanisms that may provide insurance) like benefits& possibly in a more cost)effective way& such as savings& consumer or  emergency credit& and public safety nets. 2rgani*ation and private individuals take of insurance to protect them against possible financial losses caused by a range of causes or unexpected factors. This means that should the worst happen and these losses occur& they will receive financial compensation from their insurance company. Therefore& insurance provides companies with financial protection in the event of loss that could influence their operations. Individuals unwilling or unable to handle their own funds have been pleased to find and outlet for their investment in insurance policies. 4ndowment policies& polic ies& multipurpo multipurpose se policies& policies& deferred deferred annuities are cert certain ain better better form of investment. investment. 5n individual from his own capacity cannot invest regularly with enough of security and profitability. "any of the existing literatures reviewed above clearly indicate that the insurance in !angladesh has has not not yet yet st stoo ood d on a soli solid d fo foot otin ing. g. "a "any ny re reas ason ons s are are ther there e for for the the back backwa ward rdne ness ss and and underdevelopment of insurance in !angladesh In a journa* journa* /ssistant /ssistant rofes rofessor sor of %I mentioned some diversified diversified problem and prospect of 

insurance in !angladesh& there he mentioned that our main problems of insurance are lower per  capita capit a income income & poor knowledge knowledge of agents agents & illiteracy illiteracy & religious religious supersti superstition tion & lower awareness awareness & low savings & lack of continuity& shortage of fund & lack of remainder& negligence policy holder& restriction & poor services to consumers& image & red tapism to obtain compensation & lack of new products produ cts & low return & traditiona traditionall marketing marketing &traditional &traditional insurance act& restr restrictiv ictive e insurance insurance act & nature of intangibility & inadequate training& advantage of psc& discriminatory attitude& lack of  reliability& lack of advertisement& inability to solve the problems& low quality service& dearth of  underwriter& lack of confidence& inadequate government support& undue promotion & fabricated informatio infor mation n give by the agents& agents& limited limited operational operational areas& licensing licensing diff difficult iculty& y& rigid prem premium& ium& backwards of mentality.

 

In an interview interview with dai*y sun" heikh abir 4ossain " 5hair6an 5hair6an of the BI/ said in reply to

the question about insurance sector sector that 6The insurance sector can play an important role in the growth of the economy of the country as it can accelerate the development process. The sector in other countries is much stronger with policy supports as it can ensure a sustainable development of

the

economy.

The industry in our country lacks attention of the policy makers and the previous governments neglected the sector& but the present government under the leadership of 7rime "inister 8heikh $asina has given much attention to the insurance sector. sector.99 $e said mentioned various thing to reply the question of it current condition of the insurance business and highlighted some problems 6There are several problems in the sector. "any of the companies are facing problems in issuing initial public offerings ,I72s0 as the paid)up capital of  the companies has been raised under the new Insurance 5ct.9 $e also said that In the past& the paid)up capital for the general insurance companies was Tk 1: million& which has now been increased to Tk ; million& while that for life insurance companies has been raised to Tk haka Ink +ompany Bimited

!anaging

The "erchants 4lite 7rinting K 7ackages Bimited "r. Nasiruddin 5hmed

Trading& !usiness +onsultant

!egum 8hams 5ra 8abir

$ouse maker  

%irector  

Bimited

!ission7

O To create and deliver risk solutions and services that makes our clients risk)free and successful. O To be among its peers in the market by providing fastest personali*ed services to the clients through utmost good faith& good conduct& sincerity and integrity. integrity. =ision7

O To contribute contribute actively for the betterment of the policyholders& shareholders and well being of the soci societ ety y at la larg rge e th thro roug ugh h comp compre rehe hens nsiv ive e in insu sura ranc nce e prot protec ecti tion on and and crea creati tive ve inve invest stme ment nt.. O To double double sales sales revenu revenue e over over the next fiv five e years years by provid providing ing max maximu imum m securi security ty for the properties of the existing and potential clients 3.2 !anage6ent

Insurance is basically a technical business and dependent to a great extent on the quality of  techno)human resources available to form a management team. The company has in its strength good goo d number number of highly highly qualif qualified ied K experi experienc enced ed insura insurance nce person personnel nel.. The operat operation ion of the compan com pany y is being being carrie carried d out by an experi experienc enced ed "anage "anagemen mentt team team wit with h wid wide e exp exposu osure re to insura ins urance nce indust industry ry.. "r "r.. ". 5* 5*mal mal $oque& $oque& 5+II& 5+II& "anagi "anaging ng >irect >irector or #oined #oined the com compan pany y as

 

4xecutive >irector on (ebruary 1??1 with a long #ob experience in insurance business both at home and abroad. The "anagement team consists of the following 4xecutives3  

)>ecutive %irector  "r. Ghulam Aahman

"r. 8hamsu**aman

$ead 2ffice

"r. "ia (a*le Carim& (+5

+hief (inancial 2fficer ,+(20& $ead 2ffice

"r. "d. Dahangir 5lam Chan

Aegional +hief& 5grabad& +hittagong

"r. Chawa*a "an*er Nadeem

$ead of "arketing& 7rincipal 2ffice

 5ssistant "anaging >irector  "r. 4namul Islam +howdhury

Aegional +hief& 8ylhet

"r. "d. Nurul 5min

In)+harge& Nawabpur !ranch

"r. "d. 8hafiul 5lam !huiyan

In)+harge& "oti#heel !ranch

"r. "d. 8hamsul $oque

"arketing& 7rincipal 2ffice

"r. "d. Makaria +howdhury

"arketing& 7rincipal 2ffice

"r. 8k. 5hasan $abib

In)charge %nderwriting& $ead 2ffice K 7rincipal 2ffice

"r. ". Golam $afe*

In)charge& +laims& $ead 2ffice

"r. "d. "a*ibur Aahman

In)charge Gulshan !ranch

8enior 4xecutive Eice 7resident "r. "d. 4hsanul $oque

"arketing& 7rincipal 2ffice

"r."d.Tariful Islam

In)charge& Ae)Insurance and !+>& $ead 2ffice

"r. "d. "osaraf $ossain

"arketing& 7rincipal 2ffice

4xecutive Eice 7resident "r. 8agir 5hmed

5ccounts& $ead 2ffice

"r. ". 5bidur Aahman

+ompany 8ecretary

 

"r. 5bdul "alek

In)charge& Investment K 4stt. $ead 2ffice

"r. Camrul $asan +howdhury

In)charge& "ohakhali !ranch

"r. "d. Maglul $aider Chan

5ccounts& $ead 2ffice

"r. "d. Carimul $oq "r. Tahur %llah

"arketing& 7rincipal 2ffice "arketing& 7rincipal 2ffice

"r. "d. 5hsanul $oque

%nderwriting& $ead 2ffice

"r. $umayun Cabir

5ccounts& $ead 2ffice

"r. Damaluddin +howdhury

In)charge& 8ylhet !ranch

"r. "d. "onowar $ossain

In)charge& Narayangon# !ranch

"r. "d. Ta#ul Islam

%nderwriting& $ead 2ffice

"r. !adsha Ismail $oque

In)charge& Cawran !a*ar !ranch

"r.Churshed 5li +howdhury

"arketing& 5grabad& +hittagong

"r. "d. "o*ammel $oque

%nderwriting& $ead 2ffice

"r. 5.".". Nur %ddin

In)charge& IT& $ead 2ffice

"r. "d. 4kramul $oque

5ccounts& 5grabad& +hittagong

"r. "d. 5shraf $aider

"arketing& "oti#heel !ranch

"r. Aamendra Narayan >as

In)charge& Dubulee Aoad !ranch& +hittagong

"r. 5bdul !aten +howdhury

"arketing& 5grabad !ranch& +hittagong

"r. "d. Nurul 5min

"arketing& 8ylhet !ranch

"r. 8.". 5bdur Aob

5dministration& $ead 2ffice

"r. 8hamsuddin 5hmed

In)charge& 5udit/Inspection& $ead 2ffice

"r. "d. Iqbal "a#umder

+laims& $ead 2ffice

"r. "ir 5bdul $aye

"arketing& 7rincipal 2ffice

 

"r. "d. 5bul Cashem

"arketing& 7rincipal 2ffice

"r.. "d. "r "d. Cu Cutu tub bud uddi din n 5h 5hme med d +ho +how wdh dhur ury y

"ark "a rket etin ing& g& 5gr grab abad ad !ra !ranc nch& h& +hi +hitt ttag agon ong g

"r. 4hsan "ahmood

"arketing& Cawran !a*ar !ranch

"r. 5hmed 8k. 8aiful Islam

In)charge& 8atkhira !ranch

"r. 5*adur Aahman "o#umder

In)charge& (eni !ranch

"r. 5.C.". 5*ad

In)charge& Dessore !ranch

"r. 8uklal 8omoddar

In)charge& Chulna !ranch

"r. 5bdur Aahman

In)charge& "alibagh !ranch

"r. "d. 5bul Calam

In)charge& 4lephant Aoad !ranch

"r. ".G. "aruf +howdhury

"arketing& Gulshan !ranch

"r. Tarafder "d Auhul Puddus

"arketing& Nawabpur !ranch

The activities of the company are being carried out through the various >epartments namely "arketing& %nderwriting& Ae)insurance& +laims& 5dministration& !ranches +ontrol >epartment& (inanc (in ance e K 5c 5ccou counts nts&& 5u 5udit dit/In /Inspe specti ction on K Begal Begal matter matters& s& 8hares 8hares K Invest Investmen ment& t& Inf Inform ormati ation on Technology& !oard 8ecretariat and +ompany affairs   3.3 ,roducts and ervices

4astland Insurance +ompany Bimited carries out all types of general insurance business as per  the Insurance 5ct& which includes (ire& "arine& "otor& "iscellaneous and 4ngineering business. 4xisting product lines of the +ompany are as follows3 • • • • • • •

• • •

:ire Insurance Aiot and 8trike ,AK8>0 >amage

 4arthquake >amage (lood >amage  +yclone& $urricane& Typhoon KTornado >amage  5ir +raft >amage  4xplosion >amage !urning of forest& bush& #ungle K the clearing of lands by fire >am

'e are also providing the following coverages3 (ire 8pecial 7ackage Insurance Industrial 5ll Aisk Insurance ,I5A0  +omprehensive "achinery Insurance ,+"I0

 

7roperty 5ll Aisk ,75A

•

  !arine Insurances !arine 5argo Insurance? )>ort @ I6ort

 5ccording to recommendations of the %nited Nations +onference on Trade and >evelopment • • • •

,%N+T5>0& we are providing following coverage3 ,%N+T5>0& I++)5 ,5ll Aisks0 I++)! I++)+ 'ar K 8A++ as additional a dditional coverage 'e also provide Theft K 7ilferage ,T70 and Non)delivery coverage with I++)! K +overage. I++)5 covers all risks with some exceptions. "oreover& we are providing Inland Transit coverage by Truck/Borry/Aail/!urge/+ountry Truck/Borry/Aail/!urge/+ountry !oat as required by the Insured.

•

!arine 4u** Insurance7 +omprehensive cover on $ull K "achinery as per IT+ $ull clause.

•

Total Total Boss only including 8ue and Babor charge on $ull K "achinery.

•

"arine +ountry !oat.

• • • • • •

• • • • • • • • • • • • • • •

!otor Insurance +omprehensive coverage on3

 7rivate Eehicle  +ommercial Eehicle  "otor +ycle Transit ,"otor Trade  5ct Biability/ Biability/ Third 7 7arty arty Biability Biability.. !isce**aneous insurance  5ll Aisk Insurance Insurance ,5A0

 5ir Travel Travel Insurance Insurance ,5TI0 ,5TI0 !usiness Interruption ,!I0/Boss of 7rofit Insurance +ontingency Biability Insurance ,+BI +ash)in)8afe Insurance ,+I80  +ash)in)Transit Insurance ,+IT0  +ash)on) +ounter Insurance ,+2+0  +ash)on)7remises Insurance ,+270 +ommercial General Biability Insurance ,+GB0  4mployers Biability Insurance ,4B0  (idelity Guarantee Insurance ,(G0  2verseas "ediclaim Insurance ,2"I0 7roduct Biability Insurance ,7>B0  7ublic Biability Insurance ,7B0 7ersonal 5ccident Insurance ,750

 

 'orkmens +ompensation Insurance ,'70

•

•

)ngineering Insurance +ontractors 5ll Aisk Insurance ,+5A0

4rection 5ll Aisk Insurance ,45A0 "achinery !reak)down Insurance ,"!>0 >eterioration of 8tock Insurance ,>280

• • •

4lectrical 4quipment Insurance ,44I0 !oiler K 7ressure Eessel Insurance ,!7E0 +ontractors 7lant K "achinery Insurance ,+7"0

• • •

ecia*i(ed ,roduct

• • • • • •

'e also provide the following speciali*ed products3 7rofessional Indemnity Insurance policy  $ousehold +omprehensive Insurance  8hopkeepers Insurance +omprehensive General Biability Insurance +ancellation and 5bandonment Insurance for Games  5viation 3.' Branches

4astland 4astl and Insurance Insurance +ompany +ompany Bimited Bimited has been operating operating its business business thro through ugh twenty)thr twenty)three ee branches branc hes located located at different different commercially commercially potential areas acros across s the country country.. !ranc !ranches hes are mainly concentrated in >haka and +hittagong. 5mong the branches& 1< are in >haka& < are in +hittagong& : are in Chulna and one branch each at Aa#shahi and 8ylh ;a6e

of  /ddress

Ae*ehone ;u6ber

Branches

7rincipal 2ffice

1ilkusha +ommercial 5rea& >haka)1.

75!QJ

?:;

,5uto $unting0 Imamgon#

@:/1 ,-nd floor0&+hawk "oghaltuly Aoad& >haka.

=haka.

=11;-:<

"oti#heel

8hadhinata !haban ,-nd floor0&@@& "oti#heel C/A, >  >h haka.

?::-;haka

@11-<

4lephant Aoad

"inita 7la*a& :;& New 4lephant Aoad& ,haka.

@-=;?=

"alibagh

@h >haka.

@@1:;