The Insurance Development and Regulatory Authority of Bangladesh (IDRA) on May 3 (Monday) has decided to allow two new life insurance companies in a market that has become oversaturated long ago.
The insurance companies are Beach Land Life Insurance owned by local conglomerate Akij Group and NRB Life Insurance promoted by a Bangladeshi expatriate in Italy who is actively involved in Awami League politics for years.
Therefore, the total number of life insurance companies will stand at 47, almost double compared to 24 in India.
Insurance penetration rate, which is calculated as ratio of total insurance premiums to GDP, in Bangladesh is around 0.5 percent, one of the lowest in the world.
IDRA data also shows, MetLife alone has around 30 percent market share, followed by National Life (11 per cent), Fareast Life (11 per cent), Popular Life (over 8 per cent), Delta Life (over 7 per cent) and state-owned Jiban Bima Corporation (over 5 per cent).
Altogether these six companies have over 70 percent market share of Tk9,455 crore (less than $1.2 billion) premiums in 2020. the industry suffered a degrowth for the first time in 12 years due to the outbreak of pandemic.
According to the IDRA, income of life insurance companies dropped by 1.50 percent last year compared to that of a year ago.
Industry concerned said it will be very difficult for newcomers to grab business from the life insurance market, which is very low in size and dominated by half a dozen of companies.
Golam Mohammad Kibria, proposed chairman of NRB Life Insurance said “My target is to bring nearly two crore Bangladeshi expatriates into the insurance coverage. Education and health sectors will also be brought under the insurance coverage.”
Kibria also has a target to bring over 20 lakh autistics into the insurance coverage.
He believes that there is ample scope in insurance business as Bangladesh has to increase the health insurance coverage to 74 percent population if it wants to become a developed country instead of the present 3 percent.
Kibria said though it is named NRB Life Insurance the sponsors of the company will be mixed, both expatriates and locals.