Three ways the insurance industry can thrive
The unprecedented growth of Bangladesh's economy is, in many ways, supported by its hard working and highly talented young population. The economy's growth rate in 2020 has been projected to be 8 percent. According to the recent report, "World Economic League Table 2020", Bangladesh is on its way to becoming the 25th largest economy in the world by 2034 from its current 40th position.
In the Financial Year 2018-19, two thirds of Bangladesh's GDP came from five sectors—industry, wholesale and retail, transport, agriculture and construction. The rest comprises of contributions from various sectors including banking and insurance.
When it comes to insurance, the penetration of life insurance in Bangladesh is only 0.5 percent which means that the vast majority of our fellow countrymen are not accessing all the options available to them. At the same time, it shows insurance services have significant room to grow and thrive in the coming days.
Insurance protects people's financial potential and wellbeing, and makes sure that they have one less thing to worry about when unpleasant and unexpected circumstances occur. That is why a growing economy needs a thriving insurance sector.
In the year 2020, the following three elements will be a key force in driving the progress of the insurance sector.
Insurance is not a top of mind financial management tool in Bangladesh as there is a lack of awareness and understanding about insurance and its benefits among people. Bangladesh has also made significant socio-economic progress and now, life expectancy of Bangladeshi people stands at approximately 72 years.
That means as they live longer, they also need to consider protecting their financial potentials. We also see that many customers face difficulty in differentiating the features of banking and insurance products though these products serve very different purposes. Considering all of these factors, broader, customer friendly communications would certainly help potential customers more to reap the benefits of insurance.
Harnessing changing technology
Technology will continue to shape the way people interact with us and our products. We need to adopt the mindset that technology is not always disruptive rather it can also bring immense opportunities. Life insurance is a very different solution that solves a problem no one wants to have, but we need to use technology to serve customers in this space better, to build trust and educate customers about how their needs can be met. There is a general perception that the settlement process of insurance claims can be cumbersome and lengthy which adds to the reluctance to engage with insurance products. Technology can play a vital role here—to make things better, easier and faster for customers.
Focusing on customer interactions
As insurers, our interactions with our customers have been infrequent and transactional in nature. We interact with them when they first take out their policy, and even then, this transaction often conducted through an agent. We interact with them again when their family needs to claim the policy at which point, we deliver on our promises.
There is a clear scope of improving on customer interaction in the insurance industry. Our research shows that customer experience ranks just as highly as price and the products/services themselves. So, there is an opportunity to focus on interacting with customers in a way that builds loyalty and trust. Which is why, insurers need to think of thoughtful ways of keeping in touch with customers to enhance their lives.
Syed Hammadul Karim is General Manager, MetLife Bangladesh.