Life insurance in the doldrums
The life insurance sector recorded 3.77 percent growth in 2016 even though nearly half of the companies saw their incomes decline.
The 31 life insurers earned gross premium amounting to Tk 7,679 crore last year, according to data from the Insurance Development and Regulatory Authority.
Of the 31 life insurers, 14 witnessed negative growth in its premium earnings. Life Insurance Corporation of India, which entered the Bangladesh market last year, was excluded from the list.
But many of the insurers failed to net new business and renewal of existing policies.
Some insurers said their premium income went down, mainly due to payments against matured policies.
For instance, Popular Life Insurance paid Tk 850 crore against matured policies last year, according to its Chief Executive BM Yousuf Ali.
“Otherwise our premium would have been Tk 100 crore higher than the previous year,” he said, adding that many of the old insurers' premium income went negative in 2016 for the same reason.
Popular Life, however, performed well in hooking new business. Data shows the insurer's income from new business doubled to Tk 370 crore last year. But the company could not manage too many renewals of existing policies in 2016.
The other life insurance companies that recorded negative growth in premium income are: Meghna, Sandhani, Sun, Home Land, Progressive, Golden, Sonali, Baira, Zenith, Diamond, NRB Global and state-owned Jiban Bima Corporation.
Insurers that have done well include: MetLife Alico, Fareast Islami Life, National Life, Delta Life and Prime Islami Life.
MetLife Alico remains the market leader with Tk 2,150 crore premium income last year. The growth rate was 11.51 percent. The global insurance giant was also able to increase its new and renewal business last year.
Local insurer Delta Life's income crept up nearly 5 percent from a year earlier to Tk 586 crore in 2016. Like MetLife, Delta's new and renewal business also increased last year.
Proper planning and management and pro-people policies have helped them boost their income, said Kazi Mortuza Ali, chief consultant of Prime Islami Life Insurance, which recorded nearly 20 percent growth in premium earnings last year.
“We have been growing steadily since 2014,” he said, adding that insurers had experienced a slowdown in business during 2011-14 due to a confidence crisis that arose from multilevel marketing and banking scams.
Industry players also blamed a lack of awareness among people and a saturated market for the lacklustre insurance business growth.
A senior IDRA official said they have been working for the past two years to raise awareness about the benefits of insurance.
India has only 24 life insurance companies despite being the biggest market in the world with about 36 crore policies and nearly $21 billion premium last year.
In contrast, a total of 32 life insurers are competing with each other for a premium market worth less than $1 billion.
“The history of poor claim settlement is another barrier for the slow growth of the sector in the country,” the official said.