Bangladesh’s Finance Ministry has been swamped with hundreds of applications to launch new private insurance companies in the country, reports the Financial Express. Among the applications, 90% are for life insurance companies and the rest for non-life. Chief Controller of Insurance, Mr MM Niazuddin, says that local entrepreneurs have submitted “around 400 applications” for life and non-life companies. “They submitted the applications to our office and the Ministry of Finance. But the government has not decided on how many licences will be issued for new insurance firms,” he said.
Sources say that the government could allow some 20 new entrants into the already-crowded sector where 62 companies chase for annual premiums worth only US$1 billion. A finance ministry official who is familiar with the issue says that the government will first form a new insurance regulatory authority which will decide the fate of the applications. Sheikh Kabir Hossain, the newly-elected President of the Bangladesh Insurance Association, says that the industry body hopes that the government would take decision based on “the economic growth and state of insurance business in the country”.
Bangladesh now has 43 private general insurance companies and 17 life insurers. The government also owns two insurers: one life insurance company and one non-life. In 2009, life insurance companies in Bangladesh collected premiums totalling around US$700 million and have been growing at a pace of around 25% a year. Non-life insurers received premiums of around US$250 million in 2009, and are growing at around 10%.
“The chances for new life insurers are high because the number of life insurance firms is still relatively low and the sector has a huge untapped potential,” said a source. However, observers say that the insurance industry already faces challenges such as a shortage of insurance professionals, a problem which will be aggravated when new players enter the industry
Courtesy: Asia Insurance Review: http://www.asiainsurancereview.com/pages/e-weekly.asp?country=10&articleID=13391#13391
