Kathmandu. The phrase ‘unbridled horse’ literally means to run a horse without a holter. It is used to describe an uncontrolled state. It should be a situation where there is no control. Is the insurance industry in Bangladesh running like a horse without bridles or is the bridle cable weak?
According to the Insurance Development and Regulatory Authority (IDRA), 32 insurance companies are at risk in the country. According to IDRA data, 15 life insurance companies and 17 non-life insurance companies are at high risk. Only 6 life insurance companies are stable.
The crisis facing high-risk companies is still far from resolved. However, at-risk companies can find solutions to their problems. Currently, 45 percent of life insurance claims and about 47 percent of non-life insurance claims are yet to be settled.
Bangladesh has 441.4 billion taka (local currency) life insurance claims left for 1.3 million customers by 2024. In addition, 54 lakh insurance policies have been cancelled in the last 14 years. Currently, there are 71 lakh active insurance policies.
The contribution of the insurance sector to the GDP has been declining over the years. Although insurance coverage is projected to increase, it is actually declining.
In 2010, the insurance sector accounted for 0.94 per cent of Bangladesh’s GDP. Also, the decline from 2023 levels was 0.41 percent. In 2024, it will be even higher.
Bangladesh’s insurance industry is like a rider on an unbridled horse. Even though IDRA has said that the crisis for high-risk companies is not yet resolved, how are these high-risk companies still selling new policies? Is it a suicidal decision to sell new insurance policies for high-risk companies? Such decisions put an already troubled insurance industry at risk of permanent collapse.
Finally, the insurance industry’s unbridled horse must be protected from obstacles. The customer should secure the deposit. The insurance industry should be protected through proper implementation of new and existing laws. –Shipon Bhuiya/Insurance News BD
