Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Sunday, September 24, 2017 05:38:40 AM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

BANK, Insurance AND NBFI Business in Bangladesh

History of Insurance Industry Development in Bangladesh

By
20th-Nov-2016       
Comments
Share your thought
Post a comment »
Read all () »

Mir Nazim Uddin Ahmed
Managing Director
Islami Commercial Insurance Co. Ltd. :

After the liberation the government of the People's Republic of Bangladesh in 1971, nationalized the insurance industry along with the banks in 1972 by Presidential Order No. 95. By virtue of this order, all companies and organization transacting all types of insurance business in Bangladesh came under this nationalization order. This was followed by creation of five insurance companies in the life and non-life sector. Further changes were brought on 14th May, 1973. Through the enactment of Insurance Corporation Act VI, 1973 which led to creation of two corporations namely Sadharan Bima Corporation for general insurance and, Jiban Bima Corporation for life insurance in Bangladesh. In other words Sadharan Bima Corporation (SBC) emerged on 14th May, 1973 under the Insurance Corporation Act (Act. No. VI) of 1973 as the only state owned organization to deal with all classes of general insurance & re-insurance business emanating in Bangladesh. Thereafter SBC was acting as the sole insurer of General Insurance till 1984. Bangladesh Government allowed the private sector to conduct business in all areas of insurance for the first time in 1984. The private sector availed the opportunity promptly and came forward to establish private insurance companies through promulgation of the Insurance Corporations (Amendment) Ordinance (LI of 1984) 1984. The Insurance Market in Bangladesh now consists of two state-owned corporations, forty five and thirty private sector general & life insurance companies respectively, a total of 77 Insurance Companies.
Growth in insurance coverage is strongly associated with rising incomes, the development of an increasingly sophisticated banking sector, and low or moderate levels of inflation. The strong contribution of rising incomes to greater insurance coverage might be attributable to demand factors (rising demand for coverage as individuals become wealthier), supply factors (it becomes more cost-effective to provide insurance as the economy expands, providing both a stronger institutional environment and greater returns relative to transactions cost), or a combination.
The overall institutional environment plays an important role, in terms of political stability and openness as well as government effectiveness, rule of law, and control of corruption. Religious factors also play a role, with insurance consumption inversely correlated to the share of the population that is Islamic.
The evidence suggests there is substantial potential for insurance to make a greater contribution to economic growth and social welfare in many lower and middle income countries. Indeed, industry experts argue that insurance lags behind other financial services in the extent of globalization, providing substantial growth opportunities.
Contribution of Insurance Industry to the Economic Development in Bangladesh
The commitment of the government to promote development of the insurance sector is of enormous consequence for its promising future. In view of the pro-active policy support of he government that the sector has so far received in an unstinted manner, we certain that within the next few years we will be able to make insurance a very important component of the country's financial system. This will go a long way for eradication of poverty and promoting sustainable economic growth. Insurance serves a number of valuable functions which are very different from those rendered by other types of financial intermediaries. The indemnification and the risk pooling properties of non-life insurance facilitate transaction and the provision of credit by mitigating losses as well as the measurement and management of risk.
n Formation of capital & increase of investment:
Insurance companies received premiums from insured persons. These premiums increase national capitals. By investing these capitals, national productions increase.
n  Reduce of hindrance of risk:
Every sorts of business consists of risks. These risks are more hazardous in Bangladesh. Non Life Insurance companies minimize these risks by giving privileges on loss.
n Distribution of risks:
Insurance companies deal with lots of insured people and properties. So risks are being distributed among them to their re-insurer.
n Extension of business:
By taking all uncertain business risk insurance companies extended the field of business in our country. Insurance gives the assurance of indemnity and help to collect the capital to lunch a new business and expand the existing business.
n  Provide safety and security:
Insurance provide financial support and reduce uncertainties in business and human life. It provides safety and security against particular event. There is always a fear of sudden loss. Insurance provides a cover against any sudden loss. For example, in case of life insurance financial assistance is provided to the family of the insured on his death, as a token of death or accidental claim.
n  Generates financial resources:
Insurance generate funds by collecting premium. These funds are invested in government securities and stock. These funds are gainfully employed in industrial development of a country for generating more funds.
n  Life Insurance encourages savings:
Insurance does not only protect against risks and uncertainties, but also provides an investment channel too. Life insurance enables systematic savings due to payment of regular premium. Life insurance provides a mode of investment. It develops a habit of savings money by paying premium.
n  General Insurance claims payments to continue business:
By paying claim General Insurance help the business man to start his business in full sweing by covering loss and also to help bank to protect liquidity for the clients business loss or bed debt of loan paid to the clients who have suffered loss.
n  Promotes economic growth:
Insurance generates significant impact on the economy by mobilizing domestic savings. Insurance turn accumulated capital into productive investments.
n  Medical support:
A medical insurance considered essential in managing risk in health. Anyone be a victim of critical illness unexpectedly. And rising medical expense is of great concern. The insured gets a medical support in case of medical insurance policy.
n  Spreading of risk:
Insurance facilitates spreading of risk from the insured to the insurer. The basic principle of insurance is to spread risk among a large number of people. A large number of persons get insurance policies and pay premium to the insurer. Whenever a loss occurs, it is compensated out of funds of the insurer.
n  Increase of awareness:
As the maximum people of our country are illiterate so they have not much knowledge about the future life and what will do to enhance the living standard. Different types of advertisement, publicity and others awareness activities of insurance company which helps to increase the awareness of general people.
Ñ Human resources development for insurance industry:
To develop the human resource for the insurance industry in Bangladesh. BIA has arranged professional training others private institution also provide training programs for business development & technique for reducing losses for the officers of the private insurance companies operating in Bangladesh.
n  Paying Taxes:
Insurance companies and their employees pay taxes, which fund government programs that help needy people, contribute to education, protect the country, and maintain and expand the infrastructure.
n  Contribute specialized expertise:
Insurers also contribute specialized expertise in the identification and measurement of risk. This expertise enables them to accept carefully specified risks at lower prices than non-specialists. As a result, the insurance market generates price signals to the entire economy, helping to allocate resources to more productive uses.
n  Incentive to control losses:
Insurers also have an incentive to control losses, which is a significant social benefit. By offering discounts to seat belts, smoke detectors, or other measures that reduce the frequency or severity of losses, they lower their eventual claims costs, in the process saving lives and reducing injuries.
n  Invest long term Government Projects:
Now a days for the requirement of development economic, insurance company can invest their ideal funds for long term to the Government Projects like Padma Bridage, Fly Over, Airways Runway, Airways Terminals, River & Sea Port etc. If Government Agencies give assurance of timely return of their investment benefits.

Tariff
Add Rate

News Archive

Inside The New Nation

Cricket »

Tamim uncertain in 1st Test against SA


Sports Reporter :Dashing opener Tamim Iqbal will be uncertain for the upcoming 1st Test against hosts South Africa (SA) for injury problem. The Test match is scheduled to be held from September 28 to October 2.Tamim Iqbal was injured on the first day of the three-day warm-up match against Cricket ...

Sports »

Members of BKSP team, who became champion in Under-16 two-day long Judo Competition pose for photo with the trophy and guests at the Shaheed Suhrawardy Indoor stadium in Mirpur on Saturday.


Editorial »

India to supply Myanmar arms!


INDIA has shunned its reputation of being democratic, generous and hospitable country. They have decided to strengthen their security along the largely porous eastern border with Bangladesh and is using "chilli and stun grenades" to block the entry of Rohingya Muslims fleeing from violence in their homeland of Myanmar. Border ...

Entertainment »

A sequel to Kajol`s Gupt to be made soon?


Kajol has been in the industry for 25 years now and she has proved her versatility time and again. From romantic to negative roles, she has been there and done that. One of her most iconic negative role has been in Gupt opposite Bobby Deol for which she also won ...

Entertainment »

I am not Varun Dhawan that I can dance with Ileana D'Cruz


Sanjay Dutt is all set to make his comeback on the silver screen with Bhoomi that hits the theatre tomorrow. The film revolves around a father who is seeking revenge from the molesters of his daughter's dignity.With Aditi Rao Hydari playing the role of a daughter to Dutt, the senior ...

City »

BNP Standing Committee Member Dr Khondkar Mosharraf Hossain speaking at a roundtable on 'Judiciary: Future of Rule of Law in Bangladesh' organised by Bangladesh Institute of Politics Studies at the Jatiya Press Club on Saturday.


International »

Russia urges calm as US, North Korea tempers flare


Reuters, United Nations :Russia urged "hot heads" to calm down on Friday as the United States admitted it felt "challenged" by North Korea's warning that it could test a hydrogen bomb over the Pacific and President Donald Trump and Kim Jong Un traded more insults.Trump called the North Korean leader ...

Editorial »

Uttering `strong and swift action` not enough, President Trump should mean business


US PRESIDENT Donald Trump wants the UN Security Council to take "strong and swift action" to end violence against Myanmar's Rohingya Muslims. Speaking at a Security Council meeting on peacekeeping reform, Vice President Mike Pence accused the Myanmar military of responding to attacks on government outposts "with terrible savagery, burning ...

City »

Islami Oikya Jote staged a demonstration in the city`s Palton area on Friday in protest against killing of Rohingya Muslims in Myanmar.


.

Entertainment »

Raai Laxmi in yet another hot, steamy song Mala Seenha


After teasing the audience with the teaser, trailer and title track now the makers of Julie 2 has released yet another hot and steamy song from the movie. With every passing day, Raai Laxmi is soaring the temperature with lots of oomph.  Produced and directed by Deepak Shivdasani and presented ...

International »

Defying Trump, Iran will boost missile capabilities


Reuters, London :Iran will strengthen its missile capabilities and will not seek any country's permission, President Hassan Rouhani said on Friday in a snub to demands from U.S. President Donald Trump.Rouhani was speaking at a military parade where an Iranian news agency said one of the weapons on display was ...

Editorial »

Shortage of food, water and medicine in Rohingya camps makes life difficult


FOLLOWING the influx of some 26,000 pregnant mothers, 40,000 lactating kids, and 2,00,000 children out of an estimated more than 4,00,000 migrated Rohingyas from Myanmar - many are now at high risk due to lack of proper health care, food, water and medicines. When some of the high-ups of the ...

Sports »

Kristie Ahn of the United States returns a shot to Veronica Cepede Royg of Paraguay during their second round match at the Korea Open tennis championships in Seoul, South Korea on Thursday.


City »

From left- former Vice-President of Dhaka University Central Students Union (DUCSU)Sultan Mohammad Monsur Ahmed, , Krishok Sramik Janata League President Bangabir Kader Siddique, Bir Uttam, General Secretary respectively of the Jatiya Samajtantrik Dal Abdul Malek Ratan, Bangladesher Samajtantrik Dal (BaSaD) General Secretary Khalekuzzaman, President of Bikalpa Dhara Bangladesh (BDB) Dr AQM Badruddoza Chowdhury, Gana Forum President Dr Kamal Hossain, Professor Dilara Chowdhury of Jahangirnagar University, former State Minister for Foreign Affairs Ministry Abul Hasan Chowdhury and weekly Robbar Editor Syed Tosharaf Ali spoke at a rally title


Entertainment »

Hera`s one decade in showbiz


Sheikh Arif Bulbon :Popular model cum actress Ruksana Ali Hera has already passed 10 years in media. She was first seen as a still model of Banglalink taken by photographer Iqbal Ahmed. She also started her career as a model in a visual advertisement of mobile company Airtel under the ...

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news