Jiban Bima sees steady growth despite challenges
Jiban Bima Corporation, a state-run life insurance provider in Bangladesh, witnessed steady growth for the past few years as its subscriber base has expanded even though customers lack faith in the industry.
The company's life insurance fund advanced 7.37 per cent year-on-year to Tk 2,474 crore in 2022, registering annual growth of above 6 per cent for the past three years.
"The main reason for the higher life premium is that people are confident they will get their funds back without facing any fraud as we are a state-run company," said Ferdous Alam Khan, manager for consolidation accounts of Jiban Bima Corporation.
The insurer's total premium increased 15.43 per cent year-on-year to Tk 763 crore in 2022. In the previous four years, the growth in premium was more than 11 per cent.
The insurer's total premium increased 15.43 per cent year-on-year to Tk 763 crore in 2022. In the previous four years, the growth in premium was more than 11 per cent.
However, the premium growth in 2020 fell significantly to 4.04 per cent due to poor business amid the coronavirus crisis, according to company documents.
In 2020, overall life insurance premiums dropped by more than 1 per cent year-on-year to Tk 9,501 crore. It then rose by around 8 per cent to Tk 10,260 crore in 2021, as per data from the Insurance Development and Regulatory Authority (IDRA).
Muhammad Shahidul Islam, a policyholder of Jiban Bima Corporation, said the benefit of the policy he has taken is slightly higher compared to those offered by private life Insurance companies.
He then said he has taken three separate policies from as many companies but the largest in terms of value is the one opened with Jiban Bima Corporation.
"Every two years, we get a dividend from the corporation without any hassle. This is a good thing," Islam added.
Tanim Hussain Shawon, another policyholder, said the premium he pays to Jiban Bima Corporation is comparatively less than that charged by private firms while the service is satisfactory.
In 2010, only 40 per cent of all life insurance policyholders would continue paying premiums past the second year but it is more than 80 per cent now.
Regarding the general public's distrust in insurance schemes, Alam said this is because several large private companies are not properly settling claims while others have almost gone bankrupt.
"Our claim settlement rate is very good though and because of this, peoples' confidence in Jiban Bima Corporation has increased. Therefore, the amount of life fund has also increased," he added.
Bangladesh's life insurance penetration is well behind the emerging market average of 3.3 per cent. In 2020, India's life insurance penetration was 3.2 per cent while it was 2.4 per cent in China.
Currently, there are 35 life insurance and 46 non-life insurance companies active in the country. Of them, 49 are listed with the stock market.
The insurance industry contributes only 0.4 per cent to Bangladesh's growing gross domestic product.