Course Title: Principles of Insurance

Course Code: B-106

Term Paper
Topic: A Comprehensive Study on Life Insurance Business in Bangladesh

Submitted to
Tasneema Khan
Assistant Professor
Department of Banking and Insurance
University of Dhaka

Submitted by
Scout Regiment

Members ID

Shajdul Islam Nihad 28-036

Kawsar Nahid 28-056
Md Mazharul Islam 28-010
Ramisa Anjum Lamia 28-014
Ummea Umama 28-022
Nipa Akter 28-070

i|Page
 Letter of Transmittal

Date:

Tasneema Khan

Assistant Professor

Department of Banking and Insurance

University of Dhaka

Subject: Submission of term paper on “A Comprehensive Study on Life Insurance Business in

Bangladesh”.

Honorable Ma’am,

It is a glorified opportunity for us to submit the term paper on “A Comprehensive Study on Life
Insurance Business in Bangladesh”. This term paper is one of the requirements for the successful
completion of this course. We saw this term paper as our opportunity to show our analytical ability and
the knowledge gained from this course, specially equipped with analysis. We were able to complete our
work at the most accurate level possible by combining the knowledge we gained throughout the course
and your precious instructions. Although we have made every effort from our side to comprehend and
translate our knowledge while writing this term paper, we will only be rewarded if you appreciate it.

Therefore, we pray and hope that you will accept this term paper and comment on its strengths and
weaknesses so that we can prepare more detailed papers on such topics in future.

Sincerely yours,

…………………….

Shajdul Islam Nihad

On behalf of

Team Scout Regiment

BBA, 28th Batch (A)

Department of Banking and Insurance

University of Dhaka

ii | P a g e
 Acknowledgment

This Term Paper is titled “A Comprehensive Study on Life Insurance Business in Bangladesh”. First
and foremost, we would like to thank Tasneema Khan, Assistant Professor, Department of Banking and
Insurance, University of Dhaka, for providing us with clear instructions, guidelines, and the chance to
write this Term Paper. She also provided detailed instructions on how to prepare this Term Paper and
what we would need to do, all of which assisted us greatly.

And also, our cordial gratitude goes to our friends, family, classmates, and seniors who helped us by
providing all the things we needed.

iii | P a g e
 Executive Summary

This paper is about a comprehensive study on the life insurance business in Bangladesh, focused to
provide a clear understanding about its dynamics, challenges, and opportunities. The life insurance
industry is an important part of the country's financial sector, facilitating economic development, risk
management, and long-term financial planning for people and families. The analysis begins by
reviewing the history of Bangladesh's life insurance business, highlighting major milestones and legal
developments that have influenced the current situation. An in-depth competitive landscape analysis
looks into the top companies in the Bangladeshi life insurance industry, analyzing their market shares,
portfolios of products, and distribution networks. The study also looks into the industry's regulatory
environment and discusses how it affects market stability, consumer protection, and innovation. The
paper highlights various difficulties faced by Bangladesh's life insurance industry. Low acceptance of
insurance rates, insufficient public awareness, regulatory difficulties, and little product diversification
are among the challenges. The paper also focuses on claim settlement methods, customer trust, and
industry transparency. However, this analysis also reveals significant growth opportunities. As the
country’s economy grows, there is a sizable untouched market for life insurance services, particularly
among the people in rural areas. Advancing technology and digital platforms will also leverage the
growth by enhancing customer engagement and experience. This paper concludes by proposing some
recommendations for the development of life insurance business in Bangladesh. These ideas include
public awareness campaigns about the advantages of life insurance, legislative measures that improve
procedures and stimulate innovation, and partnership with fintech businesses to update distribution
channels and client interactions.

iv | P a g e
 Table of Contents

Chapter 01: Introduction ............................................................................................................ 1

1.1 Background of the Study:............................................................................................ 1
1.2 Objectives of the Study: .............................................................................................. 1
1.3 Scope of the Study: ..................................................................................................... 1
1.4 Rationale of the Study: ................................................................................................ 2
1.5 Limitations: ................................................................................................................. 2
Chapter 02: Methodology .......................................................................................................... 3
2.1 Sample: ............................................................................................................................ 3
2.2 Source of Data: ................................................................................................................ 3
2.3 Types of Data: .................................................................................................................. 3
2.4 Methods Used: ................................................................................................................. 3
Chapter 03: History of life insurance Industry .......................................................................... 5
Chapter 04: Regulatory Authority & Legal Development ......................................................... 8
Chapter 05: Major Companies in Life Insurance Business ....................................................... 9
Chapter 06: Growth Prospect of Life Insurance Business in Bangladesh ............................... 11
Chapter 07: Difficulties Faced by Life Insurance Companies ................................................. 12
Chapter 08: Potential growth opportunities for Insurance Companies .................................... 14
Chapter 09: Innovation with FinTech & MFS ......................................................................... 16
Conclusion ............................................................................................................................... 17
References ................................................................................................................................ 18
Appendix .................................................................................................................................. 19

v|Page
 Chapter 01: Introduction

1.1 Background of the Study:

Life insurance industry in Bangladesh is at growth stage of its life cycle with few competitions. Life
insurance companies are continuously trying to grow and grasp the untouched market of Bangladesh.
There are some flaws which has created a lack of trust about life insurance among people. Life insurance
companies are not only concerned about customers, but they are also working innovatively to put a
socio welfare impact in the society.

This paper highlights the history of life insurance market in Bangladesh, current stakes of life insurance
business in Bangladesh, impact of regulatory authority in the market, difficulties on the growth of life
insurance business, potential growth opportunities, innovation scopes with MFSs and FinTech. This
paper focuses only the life insurance business on Bangladesh.

1.2 Objectives of the Study:

1.2.1 Broad objective: The objective of this paper is to show the history, present and potential future
of life insurance business in Bangladesh.

1.2.2 Specific objective:

• To gain knowledge about the past, current, and potential future of life insurance business in
Bangladesh.
• To know about the current trend in the life insurance business.
• To know about the constrains in the growth of life insurance business in Bangladesh.
• To know the growth opportunities of life insurance business.
• To know how much socio welfare impact life insurance business gives to society.

1.3 Scope of the Study:

This report covers life insurance business products and services, organization structure, organizational
overview, management performance, economic impact, social impact, environmental impact, and other
impact of operation conducted by the life insurance companies of Bangladesh.

1|Page
1.4 Rationale of the Study:

Every business has some impact on society, economy, and environment. It also contains a growth history
as well as potential growth opportunities. This paper has been written to show the overall situation of
insurance business in Bangladesh. This paper can help the insurance companies to be more efficient in
their performance and become more transparent about their operation. They also can get a clear idea
about the difficulties on their way to growth. Moreover, the regulatory authorities can evaluate the
insurance companies’ performance according to others in the market.

1.5 Limitations:

Some limitations we faced while writing this paper were:

• Nondisclosure of confidential data which is relevant to this paper.

• Using previous year’s data.
• Dependance on secondary data.
• Limitation of time.
• Our lack of knowledge and analytical ability.

2|Page
 Chapter 02: Methodology

2.1 Sample:

This paper is titled “A comprehensive study on life insurance business in Bangladesh”. This paper
mainly focuses on the life insurance companies in Bangladesh. This also includes the insurance
companies which operates with both life and non-life insurance, though the only life insurance part will
be considered for this paper.

2.2 Source of Data:

We have focused on our personal knowledge and secondary data. We have collected data from various
sources.

Sources of data collection:

1. Primary Sources:
• Observed life insurance activities.
• Discussion with experts in this field.
• Survey conducted via Google forms.

2. Secondary Sources:
• Website of IDRA.
• Annual Reports of various life insurance companies.
• Publications on life insurance activities.

2.3 Types of Data:

In this paper both qualitative and quantitative research data have been used. Quantitative data is used
to analyze the positions of life insurance companies in the life insurance industry. Qualitative data have
been used to describe history, potential future, difficulties to growth, opportunities for growth and other
elements of performance analysis.

2.4 Methods Used:

This paper is written using the data collected from IDRA reports and annual reports of various life
insurance companies. Also, we ran a survey to know people’s prospect of life insurance in Bangladesh.

3|Page
This is our primary source of data. We also observed life insurance activities and discussed with experts
in life insurance field for more primary data. As secondary sources we used website and reports from
Insurance Development and Regulatory Authority of Bangladesh (IDRA) and also some annual reports
of star companies of life insurance industry. We used the most recent data to write this paper usually
not more than past one year. We made an effort to accumulate all the knowledge we gained in the course.
First, we used IDRA report to know about the history of life insurance industry in Bangladesh. Then we
gathered information from annual reports from some star companies of the life insurance industry. Then
we analyzed those data to determine the difficulties and potential growth opportunities of life insurance
companies.

4|Page
 Chapter 03: History of life insurance Industry

Bangladesh became independent in 1971, life insurance operates from the start. From 1 January 1973
to 14 May 1973 Surma Jiban Bima Corporation and Rupsa Jiban Bima Corporation handled life
insurance business in Bangladesh. On 14 May 1973, the Bangladesh government vested Surma and
Rupsa Jiban Bima Corporations in the Bangladesh Jiban Bima Corporation (JBC). Till 1985, Jiban Bima
Corporation was the only institution which handled life insurance business in Bangladesh. By
establishing the Insurance (Amendment) Ordinance 1984 and Insurance Corporations (Amendment)
Ordinance 1984, the government allowed private sector to establish insurance companies.

Up to December 2000, at least 17 private companies entered the life insurance business and made it
competitive. In 2015 the number of private life insurance companies in Bangladesh reached at 30. At
present there are 36 private life insurance companies in Bangladesh (www.idra.org.bd, n.d.). Which
are:

1) Alpha Islami Life Insurance Company
Limited
2) Astha Life Insurance company Limited
3) Baira Life Insurance Company Limited
4) Bengal Islami Life Insurance Ltd.
5) Best Life Insurance Company Ltd.
6) Bondhon Life Insurance Co. Ltd.
7) Chartered Life Insurance Company
Limited
8) Delta Life Insurance Ltd.
9) Diamond Life Insurance Co. Ltd.
10) Fareast Islami Life Insurance Company
Ltd.
11) Golden Life Insurance Ltd.
12) Guardian Life Insurance Ltd.
13) Gurdian life insurance Limited
14) Homeland Life Insurance Company Ltd.
15) Jamuna Life Insurance Ltd.
16) Life Insurance Corporation (LIC) of
Bangladesh Ltd.
17) Meghna Life Insurance Company Ltd.
18) Mercantile Islami Life Insurance Ltd.
19) Met Life Insurance Company Limited
20) National Life Insurance Company
Limited
21) National Life Insurance Company Ltd.
22) NRB Islami Life Insurance Company
Ltd.
23) Padma Islami Life Insurance Company
Ltd.
24) Popular Life Insurance Company Ltd.
25) Pragati Life Insurance Ltd.
26) Prime Islami Life Insurance Co. Ltd.
27) Progressive Life Insurance Company
Ltd.
28) Protective Islami Life Insurance Co. Ltd.
29) Rupali Life Insurance Company Ltd.
30) Sandhani Life Insurance Company Ltd.
31) Sawdesh Life Insurance Co. Ltd.
32) Sonali Life Insurance Company Limited
33) Sunflower Life Insurance Company Ltd.
34) Sunlife Insurance Company Ltd.
35) Trust Islami Life Insurance Co. Ltd.
36) Zenith Islami Life Insurance Ltd.

5|Page
And there is only one public life insurance company: Jiban Bima Corporation (www.idra.org.bd, n.d.).

The JBC offers 15 different types of life insurance schemes (Wikipedia, 2023). These are:

Whole life insurance provides coverage throughout the life of the insured person. In addition to paying
a tax-free death benefit, whole life insurance also contains a savings component in which cash value
may accumulate. Interest accrues on a tax-deferred basis.

Endowment life insurance combines life insurance with a savings plan. One can choose how long he
or she wants the endowment life insurance protection to last. If insured pass away before the maturity
date, their heirs receive the insurance death benefit. If insured live past the maturity date, they get a
large payout from the insurer.

A child protection policy is a financial umbrella over kids for their use in the future. Parents can create
this cover of protection through child plans that come with a life cover on the parent, income benefit,
and market-linked returns.

Child endowment is a type of policy which helps parents to save money for their children’s future
expenses. Such as, education expenses, wedding expenses, or other major financial expenses. It is a
savings plan offering tax benefits.

Anticipated endowment is a policy where policy owner or the insured gets guaranteed cash benefit in a
regular interval within the policy period.

Pension scheme policy is an investment plan offered by life insurance companies to help create
retirement funds. The plan provides a pre-specified and regular pension, preventing financial shortfalls
in post-employment years.

Single premium life insurance is a policy which can be fully funded by a single payment. Meaning
that all the premiums can be paid in one single payment. This policy provides a guaranteed death benefit
and a cash value which grows continuously, loans can be taken against this policy.

Mortgage protection policy that helps insured’s family to pay monthly mortgage payments, if insured
who is the policyholder and the mortgage borrower, died before the mortgage is fully paid off.

Group term life insurance can cover multiple lives under one policy. This is a common practice among
employers. Employers or firms take such insurance to cover all the employees in their firm.

Group variable endowment policy provides life insurance coverage and investment opportunities. The
policyholder can choose the investment funds based on their financial goals and risk appetite. The policy
provides a lump sum amount on maturity or in case of the policyholder's death.

6|Page
Group pension policy is a kind of retirement savings and life insurance plan offered by employers or
organizations to their workers or members. This plan is intended to assist people in saving money for
retirement while also giving their beneficiaries financial security in the event that the insured person
passes away before reaching retirement age.

Grameen Bima policy’s main objective is to provide insured and insured’s family with financial
stability through quarterly little savings and risk coverage. Sum at the policy's maturity or in the tragic
event of a death during the policy's term, the assured with accrued bonus is paid.

Joint life endowment policy works just like a basic endowment policy, with the exemption that the
endowment policy will pay the couple when the plan has expired. Even in the case of the death of one
policyholder, the amount is paid to the surviving policyholder. These plans also provide maturity
benefits.

Progressive premium policy is a type of life insurance policy where the premium amount increases over
time. This is structured in a way that the initial premium is lower than what would be required for a
level premium policy, but it gradually increases at specified intervals (such as annually or every few
years). This type of policy might be appealing to individuals who expect their income to increase in the
future and can afford the rising premiums.

7|Page
 Chapter 04: Regulatory Authority & Legal Development

After independence of Bangladesh in 1971, both life and general insurance business in the country was
nationalized under the Bangladesh Insurance (Nationalization) Order 1972 excluding foreign insurance
companies. Five new corporations, Bangladesh Jatiya Bima Corporation, Karnafuli Bima
Corporation, Tista Bima Corporation, Surma Jiban Bima Corporation, and Rupsa Jiban Bima
Corporation, were set up to take over, own, and oversee the operations of the 75 existing insurance
firms. These five corporations were in business from 1 January 1973 to 14 May 1973 (Wikipedia, 2023).

The general and life insurance firms were combined into two organizations on May 14, 1973, when the
Bangladeshi government founded the Jatiya Bima Corporation. As a result, the
Sadharan Bima Corporation assumed ownership of all Karnafuli and Teesta
activities. The Bangladesh Jiban Bima Corporation (BJC) received ownership of
the Surma and Rupsa Jiban Bima Corporations. Jiban Bima Corporation was the sole
organization in Bangladesh that conducted life insurance business up to 1985. The
government permitted the private sector to form insurance businesses by creating the
Insurance (Amendment) Ordinance 1984 and Insurance Corporations Photo 1: JBC & SBC logo

(Amendment) Ordinance 1984. At least 17 private businesses entered the life Source: Wikipedia

insurance market in December 2000, creating competition. This emerging number of companies needed
to be regulated (www.idra.org.bd, n.d.).

To further enhance the legal foundation for the insurance sector, the Bangladeshi Parliament approved
two insurance legislation on March 3, 2010. The Insurance Act
2010 and the IDRA Act 2010 are the new legislation that went into
force on March 18. The IDRA Act of 2010 led to the establishment
of the Insurance Development and Regulatory Authority of
Bangladesh (IDRA). Since 2010, the only government agency in
Bangladesh responsible for overseeing and expanding the Photo 2: IDRA logo
Source: Wikipedia
insurance industry is the Insurance Development and Regulatory
Authority of Bangladesh (IDRA). There are now 81 life and non-life insurance firms working in the
nation. The businesses would be subject to stringent laws and regulations and will be under IDRA's
supervision. The IDRA also regulates two state-owned insurers, Sadharan Bima Corporation (SBC) and
Jiban Bima Corporation (JBC). (www.idra.org.bd, n.d.).

8|Page
 Chapter 05: Major Companies in Life Insurance Business

We are comparing four major companies in life insurance business in Bangladesh. These are Pragati
Life Insurance Limited, Delta Life Insurance Limited, Prime Islami Life Insurance Company
Limited, and Sonali Life Insurance Company Limited. All these data are taken from annual reports of
2018.

In the insurance industry there are some big distortions. For example, if we talk about net premium, we
can see Pragati Life gets 2560 million BDT, Delta Life gets 6560 million BDT, Prime Islami Life gets
3612 million BDT, and Sonali Life gets 675.85 million BDT. Here Delta Life is getting a high net
premium whereas Sonali Life is getting one-tenth of that (Annual Report Insurance Development and
Regulatory Authority, 2018).

It is the same if we compare the total assets of these companies. Pragati Life has 5762 million BDT,
Delta Life has 15438 million BDT, Prime Islami Life has 9924 million BDT, and Sonali Life has 947
million BDT (Annual Report Insurance Development and Regulatory Authority, 2018).

When it comes to paying claim; Pragati Life paid 1663 million BDT, Delta Life paid 5566 million BDT,
Prime Islami Life paid 2178 million BDT, and Sonali Life paid 58 million BDT (Annual Report
Insurance Development and Regulatory Authority, 2018).

In investment Pragati Life has 4838 million BDT, Delta Life has 17105 million BDT, Prime Islami Life
has 3831 million BDT, and Sonali Life has 985 million BDT (Annual Report Insurance Development
and Regulatory Authority, 2018).

If we take all those data into a graph chart we get:

Comparison of key financial indicators

18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Net Premium Total Assets Claim Payment Total Investment

Pragati Life Delta Life Prime Islami Life Sonali Life

Chart 1: Comparison of key financial indicators. (Amounts are in millions)

Source: Annual reports of the companies

9|Page
Also let’s check the top 10 contributors in gross premium of the life insurance market, and their
performance over the past few years (Annual Report Insurance Development and Regulatory Authority,
2018).

MARKET SHARE OF TOP TEN AND OTHER CONTRIBUTORS TO GROSS PREMIUM

2014 2015 2016 2017

29.62
28.12
27.16
26.38

14.35
14.16
12.61
12.34

13.1
11.63
12.2
10.84

10.69
10.68

10.63
10.8

9.36
9.16
7.91
7.76
7.69
7.63

7.62

6.26
6.11

5.95
5.79

5.59
5.52
5.51

5.44

5.23

4.23
4.11
3.56
3.21

2.91
2.83
2.72

2.67
2.61
2.48
2.34

2.5
MetLife Fareast National Delta Popular JBC Meghna Prime Pragati Rupali Others

Chart 2: Market share of Top Ten and Other contributors to Gross Premium
Source: IDRA Annual Report 2010-11 to 2016-17 and 2017-18

We can see that MetLife holds most of the market share of gross premium collected by all life insurers.
We can say MetLife is the industry star here.

10 | P a g e
 Chapter 06: Growth Prospect of Life Insurance Business in Bangladesh

Let’s check the whole life insurance market prospect. One of the major things in life or nonlife insurance
is claim settlement. Let’s check the total claim incurred and total claim settled from 2009 to 2017
(Annual Report Insurance Development and Regulatory Authority, 2018). The chart is given below: (in
crores)

Amount of incurred claim & settled claim

8000
7000
6000
5000
4000
3000
2000
1000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017

Total claim incurred Total claim settled

Chart 3: Amount of incurred claim & settled claim. (In crores)

Source: IDRA Annual Report 2010-11 to 2016-17 and 2017-18

Let’s see how many branches and staff there are in the life insurance business (Annual Report Insurance
Development and Regulatory Authority, 2018). The chart is given below:

Number of Branches & Staffs in Insurance Business

45000
40000
35000
30000
25000
20000
15000
10000
5000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017

Number of Branches Number of Staff

Chart 4: Number of Branches & Staffs in Insurance Business.

Source: IDRA Annual Report 2010-11 to 2016-17 and 2017-18

It is clear that the insurance market is growing, but the process is slow. The insurance industry is facing
a few difficulties which are an obstacle in their market growth. In the next part we will be discussing
the difficulties insurance companies face. And in the following chapter we will discuss how to overcome
these obstacles.

11 | P a g e
 Chapter 07: Difficulties Faced by Life Insurance Companies

This chapter will include some information from a survey we conducted via google forms. There are a
lot of difficulties faced by insurance companies. Some of them are:

Inadequate Financial Literacy: It is difficult for life insurance companies to explain the technicalities
of various insurance products, their benefits, and how they work due to the general public's inadequate
grasp of financial literacy. Many people in Bangladesh lack knowledge and awareness about the benefits
of life insurance. As a result, the country has a low penetration rate for life insurance. The survey we
conducted shows us 29.6% of people doesn’t even know about life insurance in Bangladesh. Though
the percentage looks little, 29.6% is a big portion of the market insurance companies are missing out.
Our survey had an open-ended question, for which lot of people answered that insurance companies
need to advertise more and start campaigns to increase people’s knowledge about life insurance.

Economic circumstances: People's capacity to pay insurance premiums can be affected by the state of
the nation's economy. Income fluctuations, inflation, and general economic unpredictability can all have
an impact on the demand for insurance products. Current inflation rate is 9.74% (Bangladesh Bank,
2023). And buying life insurance policies in such high inflation is almost a luxury. According to the
survey we conducted 83.3% of people don’t have a life insurance policy.

Trust and Perception: in the context of the life insurance industry, it lacks people’s trust. Many people
have doubts about the reliability of insurance companies and could be unreliable about claim settlement
procedures. Trust-building and trust-maintenance are essential for the sector. Our survey shows that
53.7% of people doesn’t think that life insurance companies provide safety, they are doubtful about the
transparency of the insurance companies. Our survey also had an open-ended question, where a lot of
people answered that insurance companies need to gain the trust of people.

Lengthy process of Underwriting and Claim settlement: Accurate and thorough information on the
insured individuals is necessary for proper underwriting. It can be difficult to acquire accurate data in
Bangladesh, which could make it difficult to analyze risks and determine the right premiums. Also, it
increases the time for issuance of the policy. Gaining the trust of customers requires effective and
transparent dispute settlement procedures. The company's reputation may suffer if claim payments are
delayed or contested. Both the underwriting and claim settlement takes a lot of time in Bangladesh.
Also, there is a big hassle for customers to go here and there for many materials.

Poor Distribution Channels: It can be difficult to establish efficient and effective distribution
channels, particularly in rural areas where there is little access to insurance products and services.

12 | P a g e
Lack of Technology Adoption: Even while technology can improve productivity and the customer
experience, it can be difficult to integrate it into business processes and inform customers about digital
platforms. Though this is an era of digitalization, very few life insurance companies has started using
FinTech to provide services to the customers. A lot of answer for our open-ended question in the
survey was to digitalize the system.

Cultural and Social Factors: Adoption of insurance may be influenced by cultural and social norms.
People may occasionally rely on established social safety nets, which decreases the apparent need for
insurance. People may choose bank savings or other forms of savings over life insurance as the safety
of any accident.

Continuity of Engagement: Life insurance policies require policyholders to make consistent

payments over an extended period of time. Continuous customer interaction is necessary to make sure
that policyholders pay their premiums on time and don't let their policies lapse.

In the next chapter we will discuss the ways to potential growth opportunities and also how they can
overcome these difficulties.

13 | P a g e
 Chapter 08: Potential growth opportunities for Insurance Companies

There are insufficiency in both parties, life insurers and customers. By covering these insufficiencies,
the potential growth of life insurance can be enhanced.

Increasing Advertisement & Financial Literacy: Public awareness and demand for insurance products
can be raised by educating people on the value of life insurance and financial
planning. To improve financial literacy, businesses can hold awareness campaigns,
workshops, and seminars. Also, lot of people doesn’t know enough about life
insurance in Bangladesh. Advertisement can increase knowledge of people about
life insurance policies in Bangladesh and the importance of getting a life insurance
policy. One great example of this is a comics released by MetLife named “Hello Photo 3: Hello Bima – The Comics
Source: https://www.metlife.com.bd/hello-bima/

Bima – The Comics”

Focusing on Underserved Sectors: Exploring underserved markets by strategically concentrating on

places with little insurance adoption, especially rural areas, has the potential to lead to major growth.
Life insurance companies can address the special financial worries of rural people by developing
microinsurance solutions suited to the particular needs of these underserved sectors. These regionally
specific products can promote acceptance and trust. Insurance companies may effectively increase
insurance penetration, foster customer loyalty, and contribute to inclusive financial well-being by
matching services to the needs of rural populations and implementing educational initiatives.

Collaborations and Partnerships: Partnerships with firms and financial institutions give insurers the
chance to expand their customer base and distribution networks. Corporate partnerships and alliances
with banks appear as effective ways to reach a variety of audiences. Insurers can extend their market
presence, improve accessibility, and effectively provide a variety of insurance products by utilizing their
existing networks and customers.

Shariah-Compliant Products: As Bangladesh is a Muslim majority country offering insurance policies

that follow to Shariah in order to serve clients that choose Takaful-based solutions that respect to Islamic
standards can greatly enhance the potential growth.

Adopting Digital Channels to Connect with Customers: The adoption of digital channels benefits
insurers in two ways. Partnering with internet insurance aggregators or comparison websites not only
increases visibility but also attracts consumers who are proactively looking for insurance. By
simultaneously implementing effective digital marketing techniques, insurers can reach a bigger
audience by interacting with them on social media and through targeted online advertising. This all-

14 | P a g e
encompassing strategy makes the most of the potential of the digital sphere, encouraging customer
involvement and extending market reach.

Emphasis on Data Analytics: Utilizing data analytics' potential enables insurers to precisely tweak their
services and create marketing strategies. A thorough research of consumer preferences, behaviors, and
risk profiles provides insurers with useful information that helps them make wise decisions. By using a
proactive approach, services are closely matched to client requirements, boosting engagement and
satisfaction. By releasing the revolutionary potential of data analytics, insurers may better allocate
resources and create an insurance market that is focused on the needs of its customers.

Customer-Centered Strategy: A customer-centered approach is essential for success in the insurance

industry. Raising the bar for customer service, keeping lines of communication open, and settling claims
quickly not only increase satisfaction but also foster steadfast loyalty. These qualities, which promote
client relationships and trust, spread positive word-of-mouth recommendations. Insurers build long
connections, encourage brand advocacy, and establish themselves as reliable partners on the road to
financial stability by putting the client journey first.

Digitalization & FinTech Integration: There are two benefits to seamlessly integrating FinTech
technologies and technologies into claims processing, customer service, and sales. Insurance companies
increase productivity and improve customer experiences by streamlining procedures. In addition to
appealing to tech-savvy customers, leveraging mobile apps, online policy issuing, and digital payment
methods also provides accessibility and ease. By strategically combining digitization and FinTech,
insurers are better able to adapt to changing consumer expectations, boost their competitiveness, and
increase agility.

15 | P a g e
 Chapter 09: Innovation with FinTech & MFS

Innovation in fintech within the context of the Bangladesh insurance industry mainly refers to creating
digital presence. Which means most of the tasks of insurance company should be done online.

When all transactions, providing premium and buying insurance policy come into online, it creates time
value to the consumers. This includes the ability to purchase policies, file claims, and access policy
information online. They don’t need to give as much physical labor as given previously.

Another term related to insurance is “Insurtech Startups” which is getting more popular day by day.
This is mainly another kind of startup. Online service in another innovation in fintech. Consumers can
get 24/7 help from the service center.

Blockchain can give another layer of security. Blockchain can reduce fraud which is very helpful to
both policyholder and insurer. Data analysis is vital for an insurance company. Fintech helps to collect
all the data easily because of the online activities of insurance companies. The people who have a small
income can take microinsurance policy, which can be done through fintech. Fintech offers
microinsurance to the lower income people at lower cost which is more affordable and accessible.

Using AI-Driven underwriting, which uses proficient artificial intelligence algorithms to swiftly and
precisely assess huge amounts of personal data. This might speed up the underwriting procedure, offer
more precise risk evaluations, and possibly result in reduced premiums for low-risk customers.

Starting Digital Onboarding and Claims Processing by streamlining the application and claims process
through digital platforms. Mobile apps and online portals could allow customers to apply for insurance,
update policy information, and file claims seamlessly. Also, Customers may be able to submit insurance
applications, update policy details, and submit claims all in one place via mobile apps and web portals.

If we investigate the western insurance industry, their medical reports are archived centrally. This is
also known as MIB-Medical Information Bureau. One can go to any hospital get treated and when
they claim benefits insurance company can easily check the reports. As the central medical report
access is given to insurance companies.

Customer satisfaction is very important for insurance companies. Using AI chatbots customers can get
answers to genialized questions very easily. Fintech can give data security to consumers. Insurance
regulatory bodies of Bangladesh also developing frameworks to ensure the usability of Bangladeshi
people. Fintech in innovation of insurance is also contributing to the economy. A large portion of the
population can be protected against various risks. Innovation in fintech bring tremendous changes in
insurance industry of Bangladesh.

16 | P a g e
 Conclusion

In conclusion, Bangladesh's life insurance sector has undergone substantial growth and development
since its foundation. A journey from state-owned enterprises to a diversified environment of private
insurers, driven by regulatory changes and market factors, can be seen in the industry's historical
trajectory. The insurance industry has faced both possibilities and challenges as a result of the abundance
of insurers operating in the market. There is no denying that life insurance companies have promising
development possibilities. By providing specialized microinsurance solutions, insurers can access
underserved markets, particularly in rural areas. Opportunities to broaden distribution networks and
improve client interaction are presented by partnerships with financial institutions and the incorporation
of digital technology. Additionally, using Shariah-compliant goods and placing an emphasis on
customer-centric procedures can increase consumer loyalty and confidence.

To achieve sustainable growth, the life insurance industry must overcome obstacles. Strong awareness
efforts and open communication are required to address issues including inadequate financial literacy,
economic volatility, and trust gaps. With the creation of the Insurance Development and Regulatory
Authority (IDRA), the regulatory environment has changed and now offers insurers an organized
operating environment. Fintech-driven innovations have the potential to completely change the industry
by introducing digital onboarding, effective claims processing, data security, and AI-driven
underwriting. These developments not only increase operational effectiveness but also improve
accessibility and client experience. The industry is moving toward increased digitization, adopting data
analytics, and forming strategic alliances, which presents a positive picture for future growth.

In Bangladesh, the life insurance industry is positioned to be crucial in promoting monetary stability
and security for both individuals and communities. Insurers may greatly improve the financial health of
the nation by focusing on closing knowledge gaps, adopting technology, and meeting the particular
demands of various consumer segments. The sector is on the verge of a revolutionary period that holds
promise for insurers, customers, and the economy as a whole as it navigates these obstacles and takes
advantage of its development prospects.

17 | P a g e
 References

1. Annual Report Insurance Development and Regulatory Authority. (2010). [online] IDRA.
Available at: http://www.idra.org.bd/ [Accessed 27 Aug. 2023].

2. Wikipedia. (2023). List of insurance companies in Bangladesh. [online] Available at:

https://en.wikipedia.org/wiki/List_of_insurance_companies_in_Bangladesh [Accessed 27
Aug. 2023].

3. www.idra.org.bd. (n.d.). বীমা উন্নয়ন ও ননয়ন্ত্রণ কর্তপ

ৃ ক্ষ. [online] Available at:
http://www.idra.org.bd/site/page/ab3f33d4-fd9d-478b-ad0c-abc27ad93cfe/-.

4. Bangladesh Bank (2023). Bangladesh Bank. [online] www.bb.org.bd. Available at:

https://www.bb.org.bd/en/index.php/econdata/inflation.

18 | P a g e
 Appendix

List of Photos in this paper:

1. Photo 1: JBC & SBC Logo

2. Photo 2: IDRA Logo
3. Photo 3: “Hello Bima – The Comics”

List of Chart in this paper:

1. Chart 1: Comparison of key financial indicators. (In millions)

2. Chart 2: Market share of Top Ten and Other contributors to Gross Premium.
3. Chart 3: Amount of incurred claim & settled claim. (In crores)
4. Chart 4: Number of Branches & Staffs in Insurance Business.

The Questions we asked in the Survey we conducted:

1. Do you know about the life insurance policies in Bangladesh? – (70.4% said yes.)
2. Do you know life insurance companies and the regulatory authorities? – (70.4% said yes.)
3. Do you believe that life insurance companies in Bangladesh provide financial benefits and
safety? – (70.4% said yes.)
4. Do you think that the life insurance companies in Bangladesh are careful enough to provide
property safety to customers? – (46.3% said yes.)
5. Do you believe that life insurance companies play a proper role in providing financial safety to
their customers? – (42.6% said yes.)
6. Are you worried about the financial stability and asset protection of life insurance companies
operating in Bangladesh? – (48.1% said yes.)
7. Do you believe life insurance is important? – (88.9% said yes.)
8. What are you prospect towards life insurance industry in Bangladesh? – (64.8% said yes.)
9. Do you have a life insurance policy? – (16.7% said yes.)
10. Did you ever face any problem while settling claims with Bangladesh life insurance companies?
– (31.1% said yes.)
11. Do you think that the life insurance industry in Bangladesh is progressing sufficiently with
regard to technology and digital advancements? – (29.6% said yes.)
12. What's Pacific development does Bangladesh’s life insurance industry need? (open-ended
question.)

19 | P a g e