1. Dr Sheykh, can you give us an overview of the current state of the insurance industry in Bangladesh? What are some of the key challenges and opportunities you see?
Insurance industry in Bangladesh is quite big. We have 81 insurance companies; 35 life and 46 non-life. It is approximately BDT 5,000 crore market. However, insurance could not enter in the day-to-day life of people at large. Merely around 10% people are so far covered by insurance; life or non-life. The most critical challenges includes attracting people towards insurance as well as retaining the existing policyholders. Nevertheless, massive population of the country along with frequent natural disaster shows high prospect of insurance business in Bangladesh. Easy access of people to telecommunication network, microfinancing institutions providing microinsurance to low-income population, fast technological development, and even the recent opening of Bancassurance shows light to insurance in Bangladesh.
2. The insurance penetration rate in Bangladesh remains relatively low compared to neighboring countries. What factors, in your opinion, contribute to this, and what can be done to bridge the gap?
Yes, penetration is relatively low. On the customers side, the issue is, majority of the general people in Bangladesh still finds insurance as an ‘unnecessary’ expense in case of no casualties in lives or properties. On the other hand, poor claim settlement of many insurance companies, both in terms of long required time and complex documentation while frequently ending up with partial or no claim payment, traditionally caused huge mistrust of people on those.Massive awareness building programs from both government and private sector may make more people interested. However, I believe, claim payment itself will reduce the gap in supersonic speed. Delighted customers will then spread positive word-of-mouth to their friends and neighbors. Much promotional investment will do a very little if not claim payment.
3. Dhaka University is a renowned institution with a long history of producing well-rounded graduates. How does the Department of Banking and Insurance contribute to increasing awareness and understanding of insurance among students and the wider community?
You have correctly mentioned that a hundred year old Dhaka University is long producing well-rounded graduates. With that tradition, Department of Banking was extended to Department of Banking and Insurance in the year 2012. Since then, the department is offering BBA degree in Banking and Insurance while master degree can be focused on either banking or insurance. Since then around 500 insurance graduates are generated to the industry. They are mostly working in any of the insurance company or even in any other institution that needs insurance-expertise to deal with their issues with any insurance company. Even a few are working in the regulatory body IDRA. Recently, some insurance graduates have started working for banks in Bancassurance department too.
4. The curriculum at Dhaka University offers various courses on insurance. Can you elaborate on the range of programs available and how they equip students with the necessary skills to excel in the insurance industry?
In the department of Banking and Insurance, we have BBA program where the students learn some insurance courses such as Principles of Insurance, Operations of Life and Non-life Insurance, Risk Management in Insurance side by side of courses on the broad are of banking as well as other critical courses like economics, mathematics, statistics, econometrics, accounting, finance, derivatives, communication and so on. However, the insurance stream in master degree level study specialized courses on insurance such as Insurance Underwriting and Claim Settlement, Actuarial Science, Property and Liability Insurance, Insurance Regulations and Supervision, Reinsurance, Social and Health Insurance, Islamic Insurance, Insurance Fund Management, Insurance Corporate Management, Microinsurance, and even a course on Contemporary Issues in Insurance. All these coursework under expert university teachers and market-practitioners along with a three month hand-on internship in an insurance company equip the insurance graduates oven-ready to serve the insurance companies in the maximum extent possible.
5. Beyond traditional classroom learning, does the Department engage in any other initiatives to promote insurance education and awareness, such as seminars, workshops, or collaborations with industry players?
Being the largest public university in Bangladesh, we can facilitate an effective teaching-learning environment for our students. Even in case of classroom learning, the Department has world class standard classrooms equipped with computers, projectors, sound system as well as other general facilities like all air-conditioned rooms or sitting arrangements for both right handed and left-hand-writing students. We have a tradition of Guest Lecture Series under which we regularly invite good practitioners from market to share their experiences with us. Our students sometimes go for factory visits in different insurance companies when the company gladly explain them how they deal customers or even how to read their balance sheet. In addition, we have several collaboration with leading insurance companies in Bangladesh namely Green Delta Insurance, Met Life Insurance, Guardian Life insurance and National Life Insurance. Under such collaborations, the companies directly recruit our brilliant graduates, finance their actuarial studies if any, provide scholarships to financially challenged students studying insurance and so on. On 9 March 2024, my Department arranged a roundtable discussion involving the regulator and employers to get their suggestions to upgrade our curriculum of banking. The industry reacted quite positively on this effort of aligning university curriculum with the industry. Within the next two months, we will make a similar arrangement for our insurance curriculum too.
6. The insurance industry is undergoing rapid transformation globally. How is Dhaka University preparing its students to navigate this evolving landscape, particularly with respect to technological advancements and emerging trends?
You have correctly pointed out to the recent technological advancements that becomes part of our everyday life, let alone of the insurance industry. Prominent insurance companies in Bangladesh are collaborating with Startup Companies to provide technological facilities to the policyholders. Our graduates are also aligning themselves with the transformations. In my Department, students need to participate in one group project for each of the courses where they commonly come up with real data based reports on insurance companies. They need to prepare the report as well as present it in front of the class. Many of their ideas are remarkable. For example, I remember, in last semester, one of my student-groups was developing an app based insurance solution for microinsurance products.
7. In your expert opinion, what are some key trends you foresee shaping the future of the insurance industry in Bangladesh?
I am especially optimistic on the future of the insurance industry in Bangladesh, particularly in these days. Not like previous time, the current government has put high importance on the development of insurance sector. You know that the Bangladesh Insurance Sector Development Project (BISDP) is currently going on for the IDRA and the public sector insurance. It will next be applied to private sector insurance development. Additionally, a few insurance companies has started hiring Management Trainee Officers (MTOs) like banks. This inspires talented students to study insurance and develop successful career there. Qualified employees will reshape the business of insurance soon; I am hopeful. Moreover, technological collaboration of the insurance companies increases their transparency while ensuring good governance. This will definitely return trust of the customers to the sector.
8. How do you view the development in the field of Risk Management with the growing importance of ESG and related areas in Bangladesh?
ESG is the rightly identified in the area of risk management. Missing the Environment pillar such as ‘climate’ or any Social pillar such as ‘trust’, ‘inclusion’, ‘diversity’, ‘equity’, or Governance pillar such as ‘transparency’ or ‘incentives’, no insurance company will sustain. It also depends on the maturity of the industry when young companies may focus more on profit and less on ESG; but this temporary high profit will definitely disappear soon if not treated ESG with care. In Bangladesh, we can see how the committed insurance companies are expanding well while the nots are moving to nowhere.
9. Any message you would like to give to the readers of The Insurance Times
I want to say thanks to The Insurance Times for their interest, firstly, on the insurance industry of the neighboring country like Bangladesh, and ultimately, on how the pioneer public university is nurturing it by developing talented insurance-graduates for the industry who are working hard to reshape the future of insurance in the country. I am confident that the oversights here will enrich the readers of the magazine. I can understand that the readers have diverse insurance concern. We may definitely think about collaborative research for mutual benefits in the broad area of insurance.
