Insurance Business in Bangladesh Essay
Acceptance We really liked working on this kind of report. During completing various areas of the survey like collecting information by different supply and dealing with the group members after which compile various areas of the statement and so on. This report is actually a required term paper of your “Banking & Insurance” course and the honorable study course faculty, Mr. Md. Amdadul Hoque is definitely the person who offers guided all of us throughout organizing the report. We are pleased to him and we have tried to make this report because his instruction. We would like to thank almost all mighty Allah for keeping everything on road. Finally, you want to thank our parents and close friends without in whose support it absolutely was impossible for people to finish the report. OBJECT OF REPORT This study details the results of the prolem of insurance firms in public and sectors in Bangladesh and suggest policy measures intended for improving insurance services delivery process in Bangladesh. The subsequent research concerns were tackled: what are many ways of overcoming the problems of Insurance business in Bangladesh? Moreover, this kind of writing will try to highlight the underlying triggers behind the non-popularity in the insurance companies in Bangladesh. All of us also highlights the prospective customers of insurance business in Bangladesh. BACKGROUND OF THE INSURANCE BUSINESS IN BANGLADESH In Indian subcontenent the insursance come at the period of British. During the tine of Pakistan period there is about forty-nine insurance company in the area. After independence of Bangladesh, insurance sector was nationalized. Subsequently through the enactment of Insurance Corporation Act MIRE, 1973, two corporations particularly Sadharan Bima Corporation (SBC) for standard insurance and, Jiban Bima Corporation for life insurance were established in Bangladesh. SBC was acting as the sole insurer of general insurance till 1984. Between 1985 to 1988 first technology of private basic insurance companies were emerged since Bangladesh Federal government allowed the private sector to carry out business in most areas of insurance for the first time in 1984. A total of 18 private standard insurance companies were registered in that phase. In 1996 an additional 8 personal general insurance agencies were signed up. The third generation of private standard insurance companies, which included 18 companies, came into operation between 99 and 2001. The general insurance market in Bangladesh right now consists of 43 private sector insurance companies and 1 condition owned insurance carrier. Insurance Firm (amendment) Take action 1990 provides that 50 percent of all insurance business concerning any general public property or to any risk or responsibility appertaining to the public house shall be located with the SBC and the staying 50% of such organization may be positioned with this corporation or perhaps with any other insurers in Bangladesh. But also for practical cause and in contract with the Insurance Association of Bangladesh SBC underwrites each of the public sector business and 50% of the business is distributed among the existing 43 private general insurance companies equally under Nationwide Co-insurance Structure. INSURANCE COMPANIES IN BANGLADESH You will discover two types of Insurance companies in Bangladesh Genarel insurance companies within our country happen to be as adhere to: American Life insurance coverage Company. Delta Life Insurance Company Ltd. Government Insurance Company Limited. Jiban Bima Corporation Well-known Life Insurance Firm Ltd. Countrywide Life Insurance Company. Ltd. Progati Life Insurance Limited Rupali Insurance provider Limited Sunflower Life Insurance Co. Ltd. Baira Life Insurance Co. Ltd. Fareast Islami A life insurance policy Co. Ltd. Home Area Life Insurance Co. Ltd. Meghna Life Insurance Company. Ltd. Padma Life Insurance Co. Ltd. Excellent Insurance Company Limited Progressive Life insurance coverage Company Ltd. Shandhani Life insurance coverage Co. Ltd. PROBLEMS OF INSURANCE ORGANIZATION IN BANGLADESH 1 . 1) Lack of dependability: Lack of dependability is the most important hurdle (71. 9% respondents) in the event of popularity of the insurance companies where as lengthy method in getting payment after virtually any incident with the second placement with 62% response. It is usually seen that both the explained variables are related or in other words that time getting rid of behavior in payment following incidence is reducing the trust from the customers towards insurance companies 1 ) 2) Low income of the people: It was also found the fact that low cash flow and purchasing electricity (43%) doesn’t permit the persons of Bangladesh to go to get an insurance policy. Almost we can easily bring up the above mentioned elements. For example , in one hand the reduced income of the people is creating barrier in buying insurance policy 1 . 3) Unattractive offerings: the insurance businesses offer a number of policies require are not attractive to the lenders for this reasons they did not take policies. They will always make same types of presents this is also grounds of demotivation. 1 . 4) Lack of advice about the insurance companies: the insurance companies are not delivering their very own information (regarding company and insurance policy) properly or perhaps evenly which is another problem (42. 8%) in case of non-popularity of the insurance agencies. 1 . 5) High services processing cost: The service cost of insurance business are extremely much higher than any other business and this is also grounds of non popularity of insurance business. 1 . 6) Much less convincing sales people: Surprisingly it had been found the fact that sales people are doing well in effective customers though still 22% people believe sales people are certainly not that much effective. 1 . 7) Lengthy procedure to get payment after incidents: The most crucial barrier in case there is popularity of the companies while lengthy procedure in getting repayment after virtually any incident is in the second position with response. It can be noticed that both the stated parameters are related in the sense time killing patterns in payment after chance is minimizing the trust of the customers towards the insurance agencies. PROSPECTS OF INSURANCE ORGANIZATION IN BANGLADESH It is the general belief of common people that Insurance companies aren't sincere for making payment and resorts a large number of whimsical causes of declining statements which are not really taken care of although opening plan. Due to the negative attitude, the penetration level in the industry remains to be very low (only 0. 62% of GDP) even having immense prospects. Overall solvency position of general Insurance firms was found moderate. In analysis, it was found that 15. 38% companies possess poor solvency position and then 23. 07% marginal, forty two. 30% above average and others 19. 23% have satisfactory solvency position. Solvency location is usually based on a good number of signals likeequity base, exceptional damage reserve, technological reserve, inner capital technology, underwriting leveraging etc . The modern Insurance ordinance re-fixed the minimum paid upcapital of TK. 400 million which will have to be met within a specified timeframe. Not one in the industry is in comfort zone concerning capital according to new rules. A few 1st generation businesses together with the shown third generation companies possess paidup capital of TK. 150 million or more. Nevertheless , couple of very first generation businesses enhanced their particular equity base through producing exceptional loss reserve. BOTTOM LINE AND ADVICE The demographic trends claim that as private insurance companies (both local and multinational) possess proliferated in Dhaka city, better knowledgeable and more affluent people have gravitated to these insurance companies for insurance services. These people/clients are likely to have better information about the top quality of companies provided by both public and insurance companies and their inclination to pick private insurance agencies suggests, implicitly, that the quality of service is better at these private firms even though their (private insurance companies) service cost is somewhat larger. Moreover, many branch operation of private insurance firms help the people to make evaluation among them and making a great insurance decision in favor of those that are reliable. But between the private neighborhood and international insurance company decision, clients are mostly considering foreign private insurance firms due to its trustworthiness, experience functioning and extensive area protection. Less volume of branches with the public insurance providers may be one more prime purpose of if she is not preferred by local consumers. By explanation, it might be more authentic in the event the clients had been inclined towards the public insurance providers from trustworthiness point of view, but as statistics suggests in favor of choosing foreign private insurance firms, probably we have to be satisfied by saying that it is in lots of respect guided by client’s psychology of getting better and prompt solutions. The incentive composition must also may play a role in ensuring the quality companies delivered by public insurance agencies. One answer is to tie part of the reimbursement of insurance personnel in public places companies to services rendered and responses received coming from clients. This kind of, of course , is actually a complex concern and has implications to get pay scale administration, since public bank employees, as government servants, happen to be paid according to particular pay buildings. While past the scope of this conventional paper, authors feel that compensation overall flexibility is necessary to reward individuals who are dedicated to featuring quality insurance services. If perhaps compensation modifications can’t always be incorporated, benefits-including promotion, transfer in more respected branches, examine leave, performance bonus as well as the like-could end up being tied to functionality evaluation system. There must be a formal procedure of evaluating the employees by the consumers through a lot of questionnaire type performance evaluation form. An indicator, objection or perhaps recommendation publication in the part can be introduced where the consumers can even make a complaint or enjoy about a specific employee. Open public awareness and the transparency of the high recognized may possess a positive influence on that concern. Moreover, clientele have rated guide by family and friends as another extremely important determinant in insurance provider decision. To enhance a good reputation of the insurance company, they will follow the strategies stated listed below: – Perform a lot of personal selling of services for the clients and encourage existing customers to share with good with regards to your services to the potential customers. Carefully choose employees who connect to the customers. Confident and societal marketing actions to build and project specifi company graphic to maximization of popularity. Style facilities to obtain specific promoting or image objectives with the organization. Establish formal system for managing quality of insurance companies to provide certain effort to encourage consumers to tell others about your providers. From the politics and social behavior with the people it can be said that demand for these services will be higher in near future. Even keeping more with an insurance company is also dominated by many exceptional services. Insurance providers, especially public one must think about more appeal added providers. BIBLIOGRAPHY 01)Bangladesh Bureau of Statistics. 2005. “Report of economic Service Providers in Bangladesh”. 02)Berri, Leonard D. (1980), “Service Marketing differs from the others 03)www.google.com 04)“Insurance Principiles And Practice” By M. N Mishra.
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