There should be vigorous campaign through out the country to make the people aware of the utility and prospects of buying insurance. Bangladesh is a densely populated country and most of the people in our country are poor. They would definitively go for insurance for the security and the risks covered by the insurance. Therefore, the prospects of Insurance are very high in Bangladesh if the following measures can be adopted.
First of all, there is no alternative of quality service. Insurance being a service rendering entity must provide quick services. Policyholders are highly dissatisfied with service of JBC and SBC. Due to poor quality services, public corporations are loosing market. In order to ensure their continuity, such corporation must pay adequate attention on their quality of service. Private companies also need put their all out efforts to improve quality of service so as to strengthen their position.
Secondly, the government should eliminate the difficulty in licensing procedure and should not delay in the approval of new companies if all the requirements are fulfilled. It will help not only to increase volume of business but also solve the problems of unemployment.
Finally, the policy holders are very much worried about the settlement of claims. Ordinary people also consider it main constraint. Therefore, instance companies should settle the claims as quickly as possible to create a healthy public image. For this purpose the claim settlement procedure can be simplified and the insurers can provide proper written guidelines of claim settlement to the policyholders.
If the above steps can be taken, more and more people in Bangladesh will be interested in buying insurance.
1. [LOW PER CAPITA INCOME] Poor economic condition is considered to be the main reason for poor life insurance penetration in Bangladesh. The country has a very low per capita income and over 50% of our total population lives below the poverty line. Inability to save or negligible savings by a vast majority of population kept them away from the horizon of life insurance.
2. [POOR KNOWLEDGE OF AGENTS] The marketing of insurance is greatly hampered in the remote village of Bangladesh where the agents are appointed from respected locality. This is because; educated young people are seemed to be reluctant to become insurance agents. Therefore, persons finding no job or persons having lesser knowledge become insurance agents whom cannot acquaint themselves fully with the whereabouts of insurance. Such agents cannot play efficient role in convincing a prospective policyholder.
3. [ILLETERACY] Mass illiteracy is another factor that adversely affects the marketing of insurance. About 70% of the population is floating in the sea of ignorance. Illiteracy leads one to think that the insurance is deception; it is no value in life. They cannot think rationality because they do not know what is insurance and what its importance as security for future.
4. [RELIGIOUS SUPERSTITION] Religious attitude of the people also stands against efficient insurance. The religious people believe that the future is uncertain, it is in the hand of Allah and they do not think it necessary to buy life insurance policy for them.
5. [LOW AWARENESS] Insurance awareness is poor. Agents are not skilled enough. These agents cannot perform their job properly to make the people aware of life insurance.
6. [LOW SAVINGS] People of Bangladesh have a very small saving potentially and thus have less or no disposable income. Almost the whole of the income is exhausted in the process of maintaining the day-to-day life. Thus they are left with little amount, which may not deemed to sufficient for the payment of premiums. This factor discourages many to buy life insurance policy.
7. [LACK OF CONTINUITY] Discontinuation of insurance policy is found higher. This also adversely affects the market efficiency of insurance business.
8. [SHORTAGE OF FUND] Most of the policyholders cannot continue their policies owing to price spiral and shortage of fund.
9. [LACK OF REMAINDER] Increase in liability, lack of reminder notice from the insurance company causes for discontinuation of policy.
10. [NEGLIGENCE OF POLICY HOLDERS] Many of the policyholders have expressed that; their policies lapsed for their own negligence to pay premium in time.
11. [RESTRICTION] Another important reason for discontinuation is restriction investment allowance by the government relating to income tax.
12. [POOR SERVICES TO CONSUMERS] An important reason for the dismal performance of insurance business in Bangladesh is poor client services provided by the insurance companies. The public image of service from life insurance institutions is very poor.
13. [IMAGE] High lapses of life insurance policies do much to harm insurance image.
14. [RED TAPISM TO OBTAIN COMPENSATION] When an accident takes place, a claimant faces many difficulties to obtain money from the insurance company. This also discourages people for being a policyholder.
15. [LACK OF NEW PRODUCT] In a dynamic life insurance market, one can expect to see new product coming out every now and then. But still today one can hardly see any new product in the insurance market in Bangladesh.