Adeeba Rahman is an associate of the Chartered Insurance Institute (ACII- Life) UK and Chartered Insurer. She completed her MBA from Rochester Institute of Technology, New York. She is also experienced in working with two international banks, two life insurance companies at different levels, and has also gathered experiences from a renowned securities company and a tea company.
How do you evaluate the present life insurance sector scenario in Bangladesh?
With fast-paced economic growth, Bangladesh represents an enormous opportunity for financial products like life insurance. Increasing per capita income, higher life expectancy, and a large number of young working population makes it an interesting and attractive market for life insurance products.
With the current penetration level at less than 1% of GDP, and economic growth poised to be in the 8% annual category, there needs to be serious thinking on enabling newer distribution channels, incentivizing agents for a long-term career, product innovation and revisiting the existing set of regulations to suit the current trend in the financial markets across Southeast Asia.
Financially strong insurers with long-term visibility need to take the lead and with the help of the regulatory bodies; these insurers can make a difference to the overall landscape of the life insurance market. Almost 90% of the business contribution in terms of gross premium is from Top Ten players, leaving the balance 22 players to contribute only 10%. A coordinated effort with objectivity can help increase the penetration level by 1.5-2% in the next couple of years.
What needs to be done in this situation?
The industry needs to attract young talents from the market who can build a career in insurance, because the country’s youth today is equipped with modern technology and have an orientation to experiment with new things to bring fast-paced results.
Building consumer trust and confidence, through concentrated education and awareness programs by the industry, regulators and the government, shall be the first step towards higher penetration.
Delta Life Insurance has pioneered the concept of micro insurance in Bangladesh about thirty years back. How has it transformed over the years?
In 1988, Delta Life Insurance launched micro insurance in the country with the primary objective of reaching every household through a network of trained and dedicated agency force, and help them understand the need for family protection and small savings. Starting from Tk10 every week from a household in those days, our agents still visit every household once a month to collect the premium as low as Tk100 and help them create a corpus for 10 or 15 years. “Gono Grameen Bima”, as our micro insurance is popularly-referred to, contributes approx 40% of our total gross premium, whereas for the industry it is approx 16%. Delta Life currently has a market share of 18% in the micro insurance segment.
How do you see digital applications changing the business landscape in the coming years? How will the consumers benefit from it?
Life insurance industry can be immensely benefited with digital applications in terms of risk-assessment, reduction of moral hazard, and prompt settlement of claims, and it can enable all stake-holders to be in control of the business at all times. Delta Life has already stepped into the digital space through a user-friendly app "Delta Life Smart Advisor." We are in the process of launching new tools, which will help our field force to render services in an efficient manner and also empower customers to know about their policy details and service requests at the click of a button.
Delta Life has been providing employee benefit insurance to large corporate entities in Bangladesh. What has your experience been, regarding this segment?
We have been serving about 500 corporate clients including the large state-owned organizations, private sector and multinational companies (MNCs.) Primarily, two products which are popular in the employee benefit segment are group term life insurance and group health insurance for self, spouse and family. Our experience has been encouraging, and we are developing newer segments and product options to facilitate the employers to provide for more flexibility to the employees. Currently, we have more than 10% market share in this segment.
Health insurance has been one of the most sought-after product-lines for growing economies. How do you view the current scope and opportunity of this important sector?
While the macroeconomic drivers suggest more health care spending, and the demographic data suggests increasing demand for health insurance, out-of-pocket financing is currently the primary means of financing health care costs. The need for quality health care necessitates the emergence of a strong and robust private health insurance market, which shall provide the people with options of reducing the out-of-pocket financing and with more assurance. Enormous opportunities exist across Bangladesh to engage and educate customers, “manage for wellness,” and increase preventive care to boost the effectiveness and efficiency of the health care system. We definitely do see the health insurance market becoming a $1 billion market over the next couple of years, supporting millions of households.
What is the future plan of Delta Life Insurance?
We are continuously taking initiatives to introduce technology for ease of processing, and new and innovative methods of premium collection, including mobile banking channels.
Delta Life has been keeping track of the development in the insurance market across the subcontinent and other similar markets. We have been investing in technology for almost a decade, and have gradually ramped up other areas, which require orientation towards efficient and prompt customer service.
