Problems of Bangladesh Insurance Market
For getting a thorough understanding of the problems of insurance market, we undertake primary and secondary market researches, followed by SWOT analysis as a part of our strategic analysis. Experts believe that if there are certain changes in the insurance market of Bangladesh, there should be huge potentials in the market dynamics. Our findings can be categorized into the following 04 headings:
Problems relating to the regulatory body IDRA:
- IDRA has not yet introduced a robust regulatory framework.
- It has not yet developed ancillary services for smooth operation
- Delay in formation of insurance-enabling rules and regulations under IA 2010
- No introduction of need-based products
- No insurance products so far introduced for the poor community
- Capabilities for monitoring of 78 insurance companies
- No revision of insurance tariff (premium rating structures)
- No solvency regulation for the companies
- Lack of corporate governance in the companies
Problems relating to the market as a whole:
- Suffering from lack of skilled professionals
- People have a negative impression of the insurance sector as a whole
- Lack of insurance education among business graduates
- Dearth of market data/research
- Non-availability of online customer services
- Shortage of ethical excellence among employees in the companies
- Most people in the country lack of awareness about the benefits of insurance
- No plan for attracting graduate talents to insurance sector
- No positive publicity by the relevant ministries of the government
- Deficiency for coordination among the financial market players
- Price and coverage of the products not matching with customers’ requirement
Problems relating to the life insurance sector:
- Affordability of the insurance policy by lower income group
- Few buying options
- Higher lapse ratio: 60% to 70% of policies lapse by the end of their first year in force (2015)
- No flexibility in payment of premium
- Lack of updated mortality and morbidity tables
- Unsatisfactory maturity values (investment-linked products)
- Delay in claims settlement
Problems relating to the non-life insurance sector:
- No tailor-made products
- No adequate facilities for conducting risks assessment
- Unbalanced pricing of non-life products
- Non-skilled loss adjusting professionals
- Lack of insurance database (Weather, Accident, Nat Cat etc)
- Little awareness of different non-life products
- Unethical practices i.e. illegal commission
- No motor insurance
