Let "Insurance for All" be the pledge for the National Insurance Day

Today, March 1, is the fifth National Insurance Day. It is very significant in Bangladesh's economy for many reasons. National Insurance Day was observed for the first time in 2020. It was not celebrated for one year due to Covid-19. The initiative to celebrate National Insurance Day highlights the importance of the insurance industry in national life and creates public awareness about how insurance can contribute to economic development. There is a historical event behind the celebration of National Insurance Day on March 1. Father of the Nation Bangabandhu Sheikh Mujibur Rahman started working in the insurance industry on March 1, 1960, by joining the Pakistan Alpha Insurance Company. It was originally decided to celebrate National Insurance Day on March 1 to commemorate Bangabandhu's involvement in the insurance industry.

Bangabandhu decided to join the insurance industry when the government of Pakistan announced a ban on open politics. There was no financial reason behind his decision. Instead, under the guise of working in the insurance industry, he got the opportunity to establish contact with the leaders and activists. While working in the insurance industry, Bangabandhu got the chance to develop close links with Awami League leaders and workers spread in different parts of the country. Using this opportunity, he tried to strengthen the activists. Because of this, the political significance of Bangabandhu's joining the insurance industry was also vital. If Bangabandhu had not joined the insurance industry, his political career would have been hampered. Therefore, the authorities have fulfilled an essential national duty by declaring March 1, the date of Bangabandhu's joining the insurance industry, as National Insurance Day.

Officially observing National Insurance Day aims to inform ordinary people about the importance of taking an insurance policy. There is a lack of awareness of taking insurance policies, even among our country's educated and knowledgeable people. Many people think that God is the owner of saving lives. So, how does insurance save a life? So they don't want to understand the necessity of taking an insurance policy, but we have to remember that Allah is the owner of saving lives. However, the insurance industry does not accept responsibility for saving people's lives. It is the insurance industry's responsibility to protect anyone from physical harm. The insurance industry provides financial assistance to someone in case of loss of life, economic and physical loss due to an accident, or any other unforeseen cause. So, it can be said that the insurance industry does not save people's lives but helps to make life beautiful.

The existence of two types of insurance companies can be witnessed in our country. One of these is general insurance, which deals with human property damage. Another class of insurance is life insurance. Life insurance tries to help people financially and otherwise in case of physical loss. No insurance industry takes responsibility for saving people's lives. There is an ingrained notion in the minds of some that taking an insurance policy is un-Islamic. But this is just an ignorant idea since Islam has no conflict with taking an insurance policy. At the beginning of Islam, the people of Arab countries used to take insurance policies in various ways. They used to take a type of insurance policy to cover any property loss while traveling to distant countries for business purposes. However, that insurance policy was not as modern or planned as it is today.

A kind of reluctance can be witnessed among the people of Bangladesh in taking insurance policies. They are so apathetic about insurance that they do not realize the importance of taking an insurance policy. Many people who can afford it are not interested in taking up insurance policies. If the breadwinner of a family dies due to an accident or any other reason, the whole family becomes financially destitute. But if the concerned person had taken the insurance policy, the family could get financial support after the death.

A professor from North South University recently researched the state of the insurance industry in the country. The findings show that the country's people are unaware of insurance benefits. The biggest constraint in taking up an insurance policy is the lack of confidence of the general public. Those working in the insurance industry have not yet been able to highlight the importance of the insurance industry among ordinary people. Negligence of any insurance company in the settlement of insurance claims, procedural complications, unnecessary delay in payment of claims, fraud of agents or representatives, not getting the expected service from them, etc., make ordinary people unable to trust the insurance industry. They feel it is better not to take a policy than to be cheated by an insurance policy. Even if the topic of people's lack of trust in insurance companies is raised, that lack of trust cannot be removed, but nothing has been clearly said about it.

The research report has been prepared based on the opinions of 1,280 participants from different cities. Although the complete picture of this sector is not revealed in this research report, which has been prepared for about two years, basic ideas can be taken from it. According to the research report, only 0.5 percent of Bangladesh's total population was covered by insurance policies last year. It is the 85th position in the world. People from 84 countries are ahead of us in taking insurance policies. Among the countries in the Asia-Pacific region, Thailand is ahead of all in terms of taking insurance policies. 5.30 insurance policies cover percent of the country's total population. Malaysia is in the second position. Five percent of their people are covered under insurance policies. In India, the number of people taking insurance policies is 4 percent. In China, it is 3.90 percent. 2.30 percent of people have insurance policy in Vietnam. The number of people taking insurance policies in the Philippines and Indonesia is 1.90 percent and 1.40 percent, respectively. Only 0.5 percent of the total population in Bangladesh is covered by insurance policies, which is the lowest in the Asia-Pacific region.

According to the research participants, there are several problems in the progress of the Bangladesh insurance industry. These include a lack of trust. People are not able to fully trust insurance companies. Insurance companies cannot take any effective initiative to instill confidence in them. Many are losing interest in insurance policies due to procedural complications in settling claims. There is a lack of knowledge about the requirements of taking an insurance policy. According to the Insurance Development and Regulatory Authority (IDRA), 81 insurance companies operate in the country. Of these, 35 are life insurance, and 46 are general insurance. These insurance companies have created employment opportunities for a large number of people. Insurance companies are approaching ordinary people with almost similar services. They have not been able to demonstrate much success in providing diversified services. Failure to innovate is one reason insurance companies cannot expand their operations. Although there is a bright potential for insurance policies in child education, higher education, unexpected illness, purchase of land, travel savings for leisure time, etc., the initiative is not being taken up yet.

The rate of insurance takers in the country has not been increasing recently. Instead, the number of insurance policy takers is declining in some cases compared to population growth. In 2008, 0.55 percent of the country's total population was under insurance coverage. Among them, the rate of life insurance policyholders was 0.40 percent, and the general insurance policyholder rate was 0.15 percent. Zero decimal 53 percent of the total population in 2019. Life insurance policy customers were 0.38 percent, and general insurance policies were 0.15 percent. The total coverage rate in 2020 was 0.42 percent. Among them, 0.30 percent and 0.12 percent were life insurance and general insurance recipients, respectively. The total coverage rate in 2021 was 0.41 percent. Life insurance and general insurance policyholders were 0.29 percent and 0.12 percent, respectively. The total insurance policy take-up rate in 2022 was 0.41 percent. Among them, the rates of life insurance and general insurance policyholders were 0.29 percent and 0.12 percent, respectively.

Overall, the number of insured is not increasing. However, increasing the number of insurance policyholders could significantly contribute to the national economy. If the insurance policy take-up rate increases by 1 percent, GDP growth will increase by 2 percent. National savings will increase by USD 4.4 billion. Bangladesh is advancing rapidly economically. In 2015, Bangladesh was recognized as a lower-middle-income country by the World Bank. If all goes well, Bangladesh will become an upper-middle-income country by 2031. Bangladesh is nationally committed to becoming an influential developed country in 2041. The United Nations has included Bangladesh in the preliminary list of developing countries. Bangladesh will pass the final list of developing countries by 2026. In the future, the economic activity of our country will increase many times. At that time, the people of Bangladesh should be more security conscious.

The insurance industry significantly influences a country's national economic development. In no way can this contribution or role be denied. Most of the citizens of developed countries are covered by insurance policies. As a result, they do not have to face financial crises if they have an accident at work or while traveling. They get support from insurance companies during this calamity. Even if someone loses their job or becomes unemployed for any other reason, there is a system to support them. In developed countries, there is an opportunity to take insurance policies for each part of the body separately. As most of Bangladesh's people are still unaware of the importance of the insurance industry, they can be made compulsory under insurance in their particular field. Just as there is a system of taking group insurance policies in government jobs, insurance policies can also be taken compulsorily in private institutions. We must remember that taking an insurance policy is not a luxury. It is an excellent way to recover from financial and physical losses. So, every country's citizen must come under the insurance policy in their interest.

Author: Retired General Manager, Bangladesh Development Bank Limited and Writer on Economics.