Insurance sector set to turn around

Since the independence the insurance sector in Bangladesh has been facing an acute shortage of skilled professionals as the majority of young people are apathetic to take up it as a profession. The image of the financial services sector has, by now, hit the rock-bottom, which is, in no way, desirable for a would-be middle income country like ours.

Proper promotion of the profession can help attract talented people to the sector. If groomed properly, they can provide innovative services to brighten the sector’s image. This additionally can help Bangladesh meet the requirement of the World Bank’s Human Asset Index paving the way for being graded as a developing country in the days to come.

The reasons for promoting the profession in the greater interest of the financial services market are as follows:

Sustainable financial industry for steady economic growth: International business, both export and import, inevitably requires insurance coverage, for which expertise of insurance professionals is essential. So, promotion of the insurance profession indirectly supports an increase in international business and facilitates professional services which can ultimately attract foreign direct investment.

Promotion of the insurance profession commensurate with the banking industry would surely lay the foundation for Dhaka to be a financial hub in the SAARC region. We have the young and energetic people who only need to be groomed as business professionals for taking the challenges lying ahead.

Insurance being an intangible product requires soft skills in its production, distribution and marketing.  Skills of insurance professionals have the direct effect on product designs, promotion, sales and revenue generation. Well-trained professionals can avoid unnecessary hassles in rendering insurance services.

Grooming young people as skilled insurance professionals can broaden the horizon of employment at home and abroad.

Underwriting, in its simpler form, is the process of shouldering the financial liability of a policyholder, arising out of an unforeseen event, by the insurance company in exchange for premiums. For this reason, the success of an insurance enterprise solely rests on the success of the underwriting practices mainly because no amount of premium for a risk can compensate the worse claim scenario.  

Reinsurance being the business of insuring the risks of an insurance company is to be handled with exact adroitness. The required level of knowledge and skills blended with practical experiences is a must for handling a reinsurance portfolio.

The promotion of insurance as a profession can lead to development of the standard of risk management in the country. The improved standard of risk perceptions will result in reduction of happening of the insured events and the frequency of insurance claims.

The insurance penetration rate in our country is too low. Proper professional skill in this particular area is very essential. And it is the young talent of the nation who can make use of their merits in the area.

The news about misappropriation of fund, delay in settlement of insurance claims and lack of good governance in management pervades the media. There is the least possibility of resorting to fraudulent activities in presence of knowledgeable and professional people.

One of the dominant factors for not attaining the due success by insurance companies in Bangladesh is the outdated services. Providing professional services to customers through skilled personnel can make a big difference. There lies the need for professional people in the insurance sector.

Students with insurance knowledge can also serve online through freelancing websites as there is the demand for insurance-related jobs.

The writing was first published in 2014 in The Financial Express Bangladesh

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