D.Economist Desk:Prime Minister Sheikh Hasina today urged the insurance companies to utilise their industry for humanitarian welfare and said Unified Messaging Platform (UMP) will be introduced to save the customers from insurance-related cheating.
“I hope you (insurance companies) will use the insurance industry for humanitarian welfare and play a more effective role in keeping production and economy out of risk,” she said.
The prime minister was addressing as the chief guest the inaugural ceremony of the 15th International Conference on Inclusive Insurance at Pan Pacific Sonargaon Hotel here this afternoon.
Sheikh Hasina described inadequacy of information as a major problem for insurance customers.
She said consumers’ confidence in the insurance industry decreases and sometimes they are deceived too, as they remain in the dark about how many installments have been deposited and whether the installment money has actually been credited to the head office.
“To overcome the problem, the process of Unified Messaging Platform (UMP) is underway,” she said.
Sheikh Hasina requested the owners of the insurance companies to give importance to the issue of social responsibility alongside making profit.
Putting emphasis on introduction of micro insurance schemes to tackle climate change risk, she said it will greatly benefit lower income group people affected due to natural calamities.
Bangladesh Insurance Association (BIA) has arranged the three-day conference in association with Munich Re Foundation and Microinsurance Network (MiN) with the theme ‘Coping With Climate Risk’.
Finance Minister AHM Mustafa Kamal, Senior Secretary of the Financial Institutions Division under the Ministry of Finance Ashadul Islam and Chairman of Bangladesh Insurance Development Authority Shafiqul Rahman Patwary were present as the special guests at the function.
Chairman of Munich Re Foundation Thomas Loster and Chairman of Microinsurance Network (MiN) Doubell Chamberlain also spoke on the occasion as special guests.
BIA President Sheikh Kabir Hossain presided over the function, while its First Vice-President Prof Rubina Hamid delivered the welcome address.
At the outset of the event, an audio-video presentation on business and insurance in Bangladesh was made.
The premier said a directive has been issued to bring transparency in transactions in the insurance industry.
“All transactions above Tk 10 thousand must be through a bank. All insurance companies have been instructed to show their updated insurance claims on their own website,” she said.
Sheikh Hasina said being the largest Delta in the world, Bangladesh is one of the most vulnerable nations to climate change. Cyclone, storm, floods, droughts, rain, earthquake etc. occur here round the year in different times, she said.
“Insurance can play an effective role in tackling the natural disasters. But application of insurance is very limited and inadequate in covering the risks resulting from natural disaster,” she said.
As a result, the premier said, it is possible to compensate losses and damages grossly but it is still impossible reaching the micro-level people.
“In that case special insurance ecosystem can play an impressive role in addressing climate risks. However, this form of insurance system is a new type of initiative. It has been introduced in a few countries and it’s at experimental stage in some countries,” she said.
“We could also make this arrangement in our country,” she added.
The prime minister said insurance industry helps reduce the invisible risks of individuals, families and the organizations and also provides financial guarantees to minimize potential risks.
“It also provides protection against loss of life and property. It helps create funds for the country’s capital and investment sectors. So, everyone needs insurance, regardless of the rich and the poor,” she said.
Considering the importance of insurance industry in the socio-economic development of the country, Sheikh Hasina said the present government has given due importance to modernization and development of this sector.
“Our government has been trying to develop the insurance industry. We enacted new Insurance Act 2010 in place of age-old Insurance Act 1938,” she said.
The prime minister said the government has also established autonomous regulatory body, Insurance Development and Regulatory Authority (IDRA), dissolving the office of the Chief Controller of Insurance.
“The IDRA has taken several effective steps to ensure inclusive insurance,” she added.
To take into account the farmers affected by the sudden floods in the ‘Haor’ region and tackle the risk of climate change as a whole, she said, agricultural insurance is being introduced in the ‘Haor’ region to reduce the financial losses of the farmers in the primary stage.
The prime minister said insurance policy for the workers working abroad has been introduced. “It will be possible to take insurance risk of about 12 million workers. Under this insurance, a worker will get maximum insurance benefit of Tk. 5 lakh,” she said.
Pointing out that insurance claim settlement is a problem in the insurance industry, Sheikh Hasina said initiatives have been taken to bring out the insurance industry from the problem and to safeguard the interests of consumers.
“As a result, the insurance industry has settled the insurance claim of Tk. 8 thousand crore during the last two years. Due to ‘zero tolerance’ policy of the authority on claim settlement, the rate of claim settlement has significantly increased,” she said.
Sheikh Hasina said initiatives have been taken to insure building insurance to ensure the financial security of the risks arising from the fire in the buildings.
“The deadline is set by December 2019 to enlist 27 insurance companies that are not yet listed in the capital market,” she said.
She said the ‘Bangabandhu Education Insurance’ is underway to continue the education of the school-going students in the absence of parents.
The prime minister said it has been proposed to declare 1st March as ‘National Insurance Day’, adding that on the day Bangabandhu Sheikh Mujibur Rahman joined the then Alpha Insurance as regional chief. “We’re thinking about considering the proposal,” she said.
The prime minister said Father of the Nation Bangabandhu Sheikh Mujibur Rahman was involved with the insurance industry.
“Assuming office after the independence, he worked for the development of the insurance industry in our country,” she said.
Realizing the important role of an actuary for insurance industry, Sheikh Hasina said Bangabandhu called the only actuary of Bangladesh at that time Shafat Ahmed Chowdhury from London and appointed him as the Controller of Insurance in 1973.
Wishing success of the conference, the prime minister hoped that experts from different countries in this conference will play a role to share mutual experiences which will help create more effective and realistic programs to address climate risks through inclusive insurance policy.
Nearly 400 representatives of insurance and financial institutions from 42 countries are participating in the conference, organisers said.