Insurance Business in Bangladesh Essay

Ack outrightledgementWe really enjoyed working on this report . At the judgment of conviction of completing divergent cases of the report like collecting data from different source and working with the group members and then compile different parts of the report and so on. This report is a required marches paper of our Banking & indemnification course and our honorable course faculty, Mr. Md. Amdadul Hoque is the person who has manoeuver us without preparing the report . We argon thankful to him and we postulate act to make this report as his instruction. We would like to thank all skilly Allah for keeping everything on right track. Finally, we would like to thank our p arents and friends without whose support it was unworkable for us to complete the report.OBJECT OF REPORTThis topic addresses the findings of the prolem of policy companies in ordinary and hole-and-corner(a) celestial spheres in Bangladesh and to suggest policy measures for improving policy functions delivery functioning in Bangladesh. The following research questions were address what are the ways of overcoming the problems of policy business in Bangladesh? Moreover, this writing allow try to highlight the underlying causes behind the non-popularity of the indemnity companies in Bangladesh. We similarly highlights the prospects of indemnity business in Bangladesh.BACKGROUND OF THE INSURANCE championship IN BANGLADESHIn Indian subcontenent the insursance come at the period of British. During the tine of Pakistan period there was astir(predicate) 49 damages company in the country. After emancipation of Bangladesh, restitution industry was nationalized. Subsequently finished the enactment of insurance policy throne Act VI, 1973, two corporations namely Sadharan Bima partnership (SBC) for familiar insurance and, Jiban Bima Corporation for life insurance were established in Bangladesh. SBC was acting as the doctor insurer of general insurance till 1984. Between 19 85 to 1988 first contemporaries of close general insurance companies were emerged as Bangladesh Government allowed the one-on-one sector to conduct business in all areas of insurance for the first fourth dimension in 1984. A total of 16 private general insurance companies were registered in that phase.In 1996 a nonher 8 private general insurance companies were registered. The third generation of private general insurance companies, which included 18 companies, came into operation between 1999 and 2001. The general insurance market in Bangladesh now consists of 43 private sector insurance companies and 1 state possess insurance company. insurance Corporation (amendment) Act 1990 provides that 50% of all insurance business relating to any public property or to any happen or liability appertaining to any public property shall be displace with the SBC and the remaining 50% of such business may be set with this corporation or with any other insurers in Bangladesh. But for pract icable curtilage and in agreement with the restitution Association of Bangladesh SBC underwrites all the public sector business and 50% of that business is distributed among the existing 43 private general insurance companies equally under issue Co-insurance Scheme.INSURANCE COMPANIES IN BANGLADESH in that respect are two types of indemnity companies in BangladeshGenarel insurance companies in our country are as follow Agrani Insurance Co. Ltd. Asia Pacific habitual Insurance. East toss off Insurance Co. Ltd. Global Insurance Ltd. Home Land Insurance Co. Ltd. Janata Insurance Co. Ltd. Loyeds Insurance participation ltd. Mer plundertile Insurance fellowship ltd. Paramount Insurance go with Limited. Pioneer Insurance Company Limited. Provati Insurance Co. Ltd. Pragati Insurance Limited. Phoenix Insurance Company Ltd. Peoples Insurance Co. Ltd. Northern Generla Insurance Co. Ltd. Meghna Insurance Company Limited . Karnaphuli Insurance Co. Ltd. Islami Commercial Ins. Co. Ltd. G reen Delta Insurance Co. Ltd. Federal Insurance Company Limited. Eastern Insurance Co. Ltd. Desh General Insurance Co. Standard Insurance Limited. Sonar Bangla Insurance Ltd. Sadharan Bima Corporation ltd. Samata Insurance Company ltd. South Asia Insurance Co. Ltd. Takaful Islami Insurance Ltd. livelihood Insurance companies in BangladeshAmeri bottom of the inning Life Insurance Company. Delta Life Insurance Company Ltd. Federal Insurance Company Limited. Jiban Bima Corporation Popular Life Insurance Company Ltd. National Life Insurance Co. Ltd. Progati Life Insurance Limited Rupali Insurance Company Limited Sunf commence Life Insurance Co. Ltd. Baira Life Insurance Co. Ltd. Fareast Islami Life Insurance Co. Ltd. Home Land Life Insurance Co. Ltd. Meghna Life Insurance Co. Ltd. Padma Life Insurance Co. Ltd. Prime Insurance Company Limited liberalist Life Insurance Company Ltd. Shandhani Life Insurance Co. Ltd.PROBLEMS OF INSURANCE BUSINESS IN BANGLADESH1.1) Lack of trustworthiness Lack of trustworthiness is the most flushtful barrier (71.9% respondents) in caseful of popularity of the insurance companies where as lengthy process in chooseting defrayal after any incident is in the second position with 62% response. It potbelly be seen that both the tell variables are related in the comprehend that time killing sort in indemnifyment after relative incidence is reducing the trust of the customers towards the insurance companies 1.2) Low income of the battalion It was also found that the low income and purchasing top executive (43%) doesnt permit the great deal of Bangladesh to go for an insurance policy. Practically we brush off easily relate the above mentioned factors. For example, in one hand the lower income of the people is creating barrier in buying insurance policy1.3) ugly offerings the insurance companies offer many a(prenominal) types of policies but these are not spellbinding to the peoples for this reasons they did not take policie s. They always make same types of offers this is also a reason of demotivation. 1.4) Lack of information about the insurance companies the insurance companies are not delivering their information (regarding company and insurance policy) properly or evenly which is another problem (42.8%) in case of non-popularity of the insurance companies. 1.5) High service processing cost The service cost of insurance business are very much higher than other business and this is also a reason of non popularity of insurance business.1.6) Less win over sales people astonishingly it was found that the sales people are doing well in convincing customers even though still 22% people believe that sales people are not that much convincing. 1.7) Lengthy process to get payment after incidents The most important barrier in case of popularity of the insurance companies where as lengthy process in getting payment after any incident is in the second position with response. It rear be seen that both the st ated variables are related in the sense that time killing behavior in payment after incidence is reducing the trust of the customers towards the insurance companies.PROSPECTS OF INSURANCE BUSINESS IN BANGLADESHIt is the general belief of common people that Insurance companies are not ingenuous in making payment and resorts many whimsical reasons for declining claims which are not taken care of while opening policy. Due to the negative attitude,the brainwave rate in the industry is still very low (only 0.62% of GDP) even having immense prospects.Overall solvency position of general Insurance companies was found moderate. On analysis, it was found that 15.38% companies have poor solvency position followed by 23.07% marginal, 42.30% above ordinary and rest 19.23% have satisfactory solvency position. Solvency position is usually determined by a good reckon of indicators likeequity base, exceptional loss reserve, technical reserve, intimate nifty generation, underwriting leverage e tc. The new Insurance ordinance re-fixed the lower limit paid upcapital of TK. 400 million which will have to be met inwardly a stipulated timeframe.None in the industry is at comfort zone regarding capital as per new law. A few 1st generation companies unneurotic with the listed third generation companies have paidup capital of TK. 150 million or more. However, couple of 1st generation companies enhanced their equity base through generating exceptional loss reserve.CONCLUSION AND RECOMMENDATIONSThe demographic trends suggest that as private insurance companies (both local and multinational) have proliferated in Dhaka city, better better and more affluent people have gravitated to these insurance companies for insurance run. These people/clients are likely to have better information about the smell of operate provided by both public and private insurance companies and their propensity to select private insurance companies suggests, implicitly, that the quality of service is b etter at these private firms even though their (private insurance companies) service cost is fair higher. Moreover, many branch operation of private insurance companies help the people to make evaluation among them and making an insurance decision in advance of those which are trustworthy. But between the private local and foreign insurance company choice, clients are mostly considering foreign private insurance companies cod to its trustworthiness, experience in operation and wide area coverage.Less number of branches of the public insurance companies may be another prime reason of not being preferred by the local clients. By definition, it might be more authentic if the clients were inclined towards the public insurance companies from trustworthiness point of view, but as statistics suggests in favor of choosing foreign private insurance firms, probably we have to be satisfied by maxim that it is in many respect guided by clients psychology of getting better and prompt service s. The incentive structure must(prenominal) also play a role in ensuring the quality services delivered by the public insurance companies. One solution is to tie part of the compensation of insurance personnel in public companies to services rendered and feedback authoritative from clients. This, of course, is a complex issue and has implications for pay scale administration, since public situate staffs, as government servants, are paid according to certain pay structures.While beyond the scope of this paper, authors feel that compensation flexibility is unavoidable to reward those who are dedicated to providing quality insurance services. If compensation adjustments cant be incorporated, benefits-including promotion, transfer in more valued branches, study leave, performance bonus and the like-could be tied to performance evaluation mechanism.There must be a formal procedure of evaluating the employees by the clients through some questionnaire type performance appraisal form. A suggestion, objection or recommendation book in the branch can be introduced where the clients can even complain or appreciate about a special(prenominal) employee. Public awareness and the transparency of the high official may have a positive impact on that issue. Moreover, clients have rated reference by family and friends as another very important determinant in insurance provider choice. To enhance a positive reputation of the insurance company, they can follow the strategies stated below Do a lot of in-person selling of services to the clients and encourage existing customers to tell good about your services to the potential customers. Carefully choose personnel who interact with the customers . overbearing and societal marketing activities to build and project specifi company image to maximisation of popularity.Design facilities to achieve specific marketing or image objectives of the constitution .Establish formal system for controlling quality of insurance services to pr ovide specific effort to encourage customers to tell others about your services.From the policy-making and social behavior of the people it can be said that require for these services will be higher in near future. eve staying more with an insurance company is also dominated by many special services. Insurance companies, especially public one must weigh about more value added services.BIBLIOGRAPHY01)Bangladesh Bureau of Statistics. 2004. Report of Financial expediency Providers in Bangladesh.02)Berri, Leonard L. (1980), Service Marketing is Different03)www.google.com04)Insurance Principiles And Practice By M.N Mishra.