THE insurance sector is in a mess from irregularities, corruption and lack of monitoring, in addition to prevalence of some century-old laws; which are not supportive to its growth. The government has renamed the former “Insurance Department” by “Insurance Development and Regulatory Authority, Bangladesh” (IDRA) in 2011 but it is not enough unless it can bring the reforms to end the sluggishness in the sector. The companies must be able to prove that customers money is profitable and secured with them under different policy cover. The insurers are suffering from credibility problem as corruption and irregularities have grabbed them at every layer from selling insurance policies to settling claims. The blame must go to the successive governments; which did not bother to bring discipline in the sector now overloaded by 77 insurance companies.
The fact is that the insurance companies are widely owned and operated by wealthy, powerful persons who always make any attempt of the government futile to bring transparency and accountability in their business. Unless these problems were removed to give the people the impression that their money will be protected and the promised claims will be settled promptly, honestly and fairly, there is hardly any scope of overnight breakthrough.
In this sector sponsor directors who own many other businesses open policies with their insurance firms and often reimburse the claims to protect their fund. They engage fake agents, incompetent officials and pay additional commission to name some of the corruptions to suggest that swindling is more rampant there than in the state-owned banking sector. Many have the misgivings that policies of insurance companies are mainly designed to lure customers to traps and such confidence gap is hurting the business all the more. The fact that the general insurance sector grew only by 6 percent last year shows the dismal situation. Even the state-owned Jiban Bima Corporation and Sadharan Bima Corporation are no exceptions.
It is appreciable that the IDRA has recently undertaken the auditing of the insurance firms to improve monitoring and bring good governance in them to end the mess. But things like shortage of manpower and technical capacity must be overcome to achieve the goal. Meanwhile, insurance companies must take up vigorous public relation campaigns to convince the customers of the safety of their investment with enough financial benefits from opening the policies with them.
What is important is that the country’s financial system is opening up to global market and if the local insurance companies fail to improve their standard; foreign firms may be snatching much of their business. So competitiveness is the need of the hour, which in turn requires improved management and business skill to compete. It is important that the “Jatiyo Bima Niti 2013” must be fully implemented and the IDRA must have the capacity to handle the sector now in need for far-reaching reforms.
