Insurance as a Career for Our Future Talents
Every industry by and large can bloom in the era of globalization through capitalization of talents at its disposal. It typically endeavors to acquire a segment of the country’s talent with the tailor-made uplifting and promoting of its images to the young generation and their influencers – family, friends and mentors. Afterwards the fresher are acquainted with the particular career during the internship or work-experience placement so as to provide them with actual understanding about the profession in question. And insurance is no exception in this regard.
But what we see in the contemporary insurance sector of Bangladesh is the ever-prevailing negativism, the acute shortage of insurance technical manpower, and the unethical as well as unprofessional practices in the management. The current industry is considered to be a dull and boring one which ultimately results in the creation of indifference among the young generation to this noble profession. Due to this fact, the insurance institutions are getting the less meritorious group of the graduates as its future leaders.
Thus, insurance being a business of global natures faces much technical impediment, since its inception, in operating with its international counterparts. The financial experts go on saying that a nation’s insurance sector can, in no way, run in a happy-go-lucky approach. So, the issue deserves immediate dealings in the greater interest of the land.
A professional career in insurance for the future talent of Bangladesh is, nowadays, promising than ever before with the huge unexplored potentials. It essentially has a lot to offer to the youth upon whom the success of this very financial sector of the nation fundamentally banks. In parallel, the soundness of the financial services market of a developing country like ours undoubtedly rests with the strengthening as well as enabling roles played by the insurance industry as a whole. For that reason, the real challenges lies in attracting a segment of the meritorious through necessary promotion of insurance as a promising financial profession among the young people at the schools, colleges, universities.
INSURANCE AS A CAREER
The Term ‘career’ means the job or series of jobs that a person does during his or her working life, especially those related to that person’s occupation. The students in Bangladesh enjoy a few career options to choose from. In practice, the students habitually don’t have any career plan and enter the job market/profession without having the required level of qualifications. Thus, they cannot contribute to the nation’s advancement to that much extent as desired.
The term ‘profession’ literally means any type of work which needs special training or a particular skill, often one which is respected because it involves a high level of education. The performance of a particular professional job requires the qualification, experiences and skills set by the respective professional body.
Insurance, a prosperous route to financial professional career inevitably requires a certain level of professional skills which is lacking, so far as observed, in the majority portion of our insurance professionals partly because there is no insurance education in our curriculum and mainly because there is no compulsion for qualifying insurance examination from the employer group. Consequently the standard of the insurance services in the country remains below the mark and the insurance profession has not been so far promoted and dignified in the last 40 years or so.
Looking into status of insurance professionals in the developed countries, the opposite picture is seen since there is expertise and professionalism among the insurance practitioners. Accordingly the insurance contribution to GDP (Gross Domestic Product) in the UK and in India is respectively 11.8% and 4.1% whereas the rate in Bangladesh is 0.9% (0.7% in life and 0.2% non-life insurance business).
Under these circumstances, it is evident that the lack of suitable promotion and professional skills among the insurance-men are the root of the prevailing dull scenario. Provided that the professional development is focused with due emphasis on the promotion of the insurance profession, the overall image of the insurance industry would move to a better height and be next door to the banking sector which has remarkably bloomed in the last two decades.
PROMOTING INSURANCE PROFESSION
The suitable promotion of the insurance profession in Bangladesh will have a healing effect on the Insurance sector paving the way for a healthy economy through its creative as well as innovative insurance services. The practical reasons for promoting the insurance profession are as follows:
Technical advantages for the insurance companies:
Insurance being the intangible products requires soft skills in its production, distribution and marketing. The skills of the insurance professionals have the direct effect on the product designs, product promotions, sales and revenue generation for the stakeholders through this financial activity. The well-trained professionals can avoid unnecessary hassle in the insurance operation smoothing the paths.
Insurance professional and creating employment in home and abroad
The creation of skilled insurance professional can open the new horizon for the employment in home and abroad. The professionalism will results in the excellent consumers’ services in the financial sector. The export of financially skilled professional is much more profitable for a country like Bangladesh. The skilled expatriates from Bangladesh will be contributing more to our economy earning higher remittance along with upholding the image of the country to the world.
Prudent underwriting of the risks:
Underwriting, in its simpler form, is the process of shouldering the financial liability of the policyholder arising out of an unforeseen event by the insurance company in exchange of the premiums. For this reason, the success of an insurance enterprise solely rests with the success of the underwriting practices mainly because no amount of premium for a risk can compensate the worse claim scenario. Moreover; in the recent past the underwriting profit has become the corrective tool for the corporate management due to the worldwide deterioration of the insurance claim ratio. Here is the necessity of professional skills of a prudent underwriter. With respect to reinsurance, the overseas reinsures usually charge higher reinsurance premium if they assume poor underwriting practices in the concerned insurance company since professional underwriting reduces the chances of claims being made to them.
Better Management of Reinsurance Portfolio:
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 in handling of a reinsurance portfolio. All a re-insurance professional does is the placement of re-insurable business through treaty and/or facultative arrangement, negotiating reinsurance program with professional reinsurers, managing of financial transactions, and the recovery of claim amount from reinsurers. So the better execution of the above jobs needs expert professionals.
Improved standard of risk management for the steady economy
The promotion of insurance as a profession can lead to the development of standard of risk management in the country. The improved standard of risk perceptions will result in the reduction of insured event happening, and frequency of insurance claims, which in the long run lead the ways for advancement of the insurance market. Additionally the benefit of risk management is far-reaching in the business world, especially in the RMG sector where the EU and the USA based buyer groups are pressing hand for improved risk management in the garment factories. The overall development in the risk management will bring prosperity for the country.
Ensuring professionalism in the companies’ corporate management
The news of misappropriation of fund, delay in the settlement of insurance claims, lack of good governance in the management, pervades the media. The acute shortage of the duly trained insurance professional is opening the back-doors for fraudsters. There is less possibility of committing frauds in presence of many knowledgeable and professional people.
Ensuring professional services for policyholders and stakeholders
One of the dominant factors for not attaining the due success by the insurance companies in Bangladesh is the out-dated standard of services. Providing professional services for the customers through skilled personnel can make a differing outcome. There lie the needs for professional people in insurance.
Opportunity for online freelancing in insurance services
The students with insurance knowledge can also serve online through freelancing websites as there is the demand of insurance related jobs. In the western countries, insurance companies are prone to online outsourcing of various types of traditional operational activities due to the cost-benefit since there is little requirement of fixed-paid salaried employees in the outsourcing programme.
Improved insurance marketing skills leading to lead generation
Like other intangible products in the financial market, the successful lead generation of the insurance products largely banks upon the knowledge as well as presentation skill of the service-man concerned in the sale negotiation. If there is any shortage in presenting the insurance products to the prospective buyers, the sales may be, in some case, unfeasible as the insurance companies are providing the customer with the document of promise for indemnifying in the risk event. So, the professional skill is a requisite for the success sale of insurance products.
BARRIERS TO PROMOTION OF INSURANCE PROFESSION
The barriers to the promotion of insurance as a noble profession have taken roots everywhere in our society. Among other things, the pivotal barriers are listed here:
(1) non-promotion and unawareness of the possible immeasurable contribution by insurance sector to the financial market,
(2) information gap between existing manpower and the university fresher,
(3) the negative notions about career prospects in insurance,
(4) mis-conception regarding the significance of insurance in life,
(5) no institutional linkage on the part of the insurance companies,
(6) non-availability of the career counseling in insurance for the youth,
(7) the negative ideas cherished by the influencers of the young stars,
(8) the available insurance information emphasized quantity over quality,
(9) the transparency of financial transaction in the field level,
(10) inadequacy of monitoring field level activities by the top management resulting in corruption and image crisis for insurance business,
(11) non-availability of the need-based insurance products,
(12) the administrative delay in the settlement of insurance claims,
(13) the poor claims handling procedures affecting the goodwill of the insurance business,
(14) the severe scarcity of the promotional initiatives by the insurance companies in collaboration with the government body and
(15) the indifference to the necessity of eradicating negativism among the masses by the existing professionals and the corporate management of the insurance companies.
To sum up, the promotion of insurance as a career for the future generation deserves special attention from the Insurance Development and Regulatory Authority (IDRA), Bangladesh Insurance Academy, and Bangladesh Insurance Association.
Provided that the above named entities along with 78 market players put their heads together for upgrading the image of the sector, there would, no doubt, be a herald for the financial services markets of Bangladesh, which ultimately leads to her easy transition of economic base from agricultural to services.
Note: The article was earlier published in www.the-Insured.com.
Md. Khaled Mamun, M.Sc, M.Demo, DDP, ABIA, ACII (London), Chartered Insurer is the Chief Executive Officer of Reliance Insurance Limited, Bangladesh since 2014. Prior to this, he has been discharging his dedicated service for more than a decade to the company in a different management position such as Executive Director, Deputy Managing Director (DMD).