The Bangladeshi government has given the green light to introduce bancassurance, a system that enables the sale of insurance products through the country’s banking channels. Under this partnership, banks will act as corporate agents of insurance firms, providing an alternative selling strategy for insurance products to their clients. The move aims to increase insurance companies’ revenues by reaching a wider customer base and simultaneously diversify banks’ income streams. Bancassurance requires no equity investment from banks, thus reducing risk-based capital requirements. Additionally, it is expected to improve insurance coverage and promote fiscal prudence among the population while offering financial support during calamities. The Insurance Development and Regulatory Authority of Bangladesh (Idra) supports the initiative, hoping to elevate the country’s current low insurance-penetration rate of less than 1% of the GDP.
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