Special Correspondent :
Local insurance companies are facing hard times as a result of negative campaign over their operating costs allegedly by a vested quarter, insiders said.
They said insurance companies are now finding it hard to get new policy holders and the rate of renewing older policies are also declining following the campaign.
Presently, a total of 75 insurance companies are operating in the market and of them, 45 general insurance and 30 life insurance.
“Though the number of insurance companies increased rapidly, the sector is now facing hard time due to highly skeptical campaign launched by a vested quarter,” Sheikh Kabir Hossain, President of Bangladesh Insurance Association (BIA) told The New Nation on Sunday.
He said these people are running the campaign cashing in a particular provision of the Insurance Act-2000. The provision clearly mentioned the ceiling of the operating cost by an insurance company and the regulators’ jurisdiction when a company exceeds the ceiling.
“It’s a settled issue. But the vested quarter launched the campaign misinterpreting the Act. This has made the sector unstable, making the potential insurers shaky,” added Sheikh Kabir.
“The propaganda has created an adverse impact on our business by preventing entry of new insurers. It is a motivated campaign launched only to widen the market share of foreign companies,” a senior executive of an insurance company told The New Nation yesterday requesting anonymity.
He said some foreign insurance giants have already expressed their keen interest to enter the Bangladesh market as the government in March 2010 passed an insurance law to facilitate the entry of foreign insurers.
So far, the only foreign insurer to have entered the Bangladesh market after the government changed the insurance law was Life Insurance Corporation (LIC) of India, while American MetLife has been operating here since 1952.
“We came to know that many have already opened policies to them as the propaganda created an apparent mistrust in their minds on local companies,” he said, adding, “If this trends continue in future, it would bring disastrous impact on local companies.”
The insurance sector has provided jobs for the 15 lakh people and the sectors’ accumulated asset now stands at Tk 35,673 crore.
Local insurance companies are facing hard times as a result of negative campaign over their operating costs allegedly by a vested quarter, insiders said.
They said insurance companies are now finding it hard to get new policy holders and the rate of renewing older policies are also declining following the campaign.
Presently, a total of 75 insurance companies are operating in the market and of them, 45 general insurance and 30 life insurance.
“Though the number of insurance companies increased rapidly, the sector is now facing hard time due to highly skeptical campaign launched by a vested quarter,” Sheikh Kabir Hossain, President of Bangladesh Insurance Association (BIA) told The New Nation on Sunday.
He said these people are running the campaign cashing in a particular provision of the Insurance Act-2000. The provision clearly mentioned the ceiling of the operating cost by an insurance company and the regulators’ jurisdiction when a company exceeds the ceiling.
“It’s a settled issue. But the vested quarter launched the campaign misinterpreting the Act. This has made the sector unstable, making the potential insurers shaky,” added Sheikh Kabir.
“The propaganda has created an adverse impact on our business by preventing entry of new insurers. It is a motivated campaign launched only to widen the market share of foreign companies,” a senior executive of an insurance company told The New Nation yesterday requesting anonymity.
He said some foreign insurance giants have already expressed their keen interest to enter the Bangladesh market as the government in March 2010 passed an insurance law to facilitate the entry of foreign insurers.
So far, the only foreign insurer to have entered the Bangladesh market after the government changed the insurance law was Life Insurance Corporation (LIC) of India, while American MetLife has been operating here since 1952.
“We came to know that many have already opened policies to them as the propaganda created an apparent mistrust in their minds on local companies,” he said, adding, “If this trends continue in future, it would bring disastrous impact on local companies.”
The insurance sector has provided jobs for the 15 lakh people and the sectors’ accumulated asset now stands at Tk 35,673 crore.
