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Only Sadharan Bima Corporation Can restore confidence in Nonlife Insurance

02 February 2023

Mir Nazim Uddin Ahmed :
The private sector non-life insurance companies of the country have become dependent on the state-owned Sadharan Bima Corporation. Sadharan Bima Corporation represents Bangladesh in the world insurance market as a reinsurer of Bangladesh with premium support earned by private non-life insurance companies. They liaise with foreign reinsurers as representatives of state and all private insurance companies on domestic treaty renewals or other ancillary work. The domestic insurance business portfolio is strengthened due to the business contribution of private insurance companies, hence the reinsurance activities of Sadharan Bima should encourage the domestic private insurance companies to perform well. But instead of that day by day a wide gap has been created between non-life insurance companies and Sadharan Bima corporations. It is not a revelation of the reason or who is guilty, but considering the actual situation, the insurance development and regulatory authority should take a quick decision, otherwise they will continue to have a heavy load of complaints from various companies.
If in fact it were the case that Sadharan Bima Corporation would get the respect it is getting in the world insurance market by taking a portfolio of 46 companies in the country and re-insuring it with a single portfolio? There is no immortality in the self. United we are a great force, through which we can revolutionize the insurance industry and overcome the image crisis of the insurance industry by gaining 'trust and trust'.
The Sadharan Bima Corporation should provide better services so that the premiums of private non-life insurance companies remain in the country and the hard earned foreign exchange does not go out of the country for reinsurance premiums. But in reality, the Sadharan Bima corporations are not nursing the private insurance companies but playing the role of competitors, today the private insurance companies are completely losing the 'confidence and trust' of their policy holders and there is an 'image crisis' in insurance. In such a situation, the Insurance Development and Regulatory Authority's letter dated August 8 has attracted the attention of all concerned with insurance. We understand that IDRA has realized the reasons for mutual distance between Sadharan Bima Corporations and private non-life insurance companies and is active in removing the same.
If private 45 non-life insurance companies re-insure themselves or abroad by forming pools, what will happen to the existence of Sadharan Bima Corporations! It is easily understandable to everyone. In this context, the issue of setting up of new reinsurance companies is often discussed in BIA meetings at present. The only reason for this is that private non-life insurance companies are not getting adequate service from Sadharan Bima. So now is the time to take measures to eliminate this situation.
It should not be forgotten that reinsurance in foreign markets is not easy with only a single business of Sadharan Bima Corporation without business portfolio of 45 private insurance companies. Therefore, the place of 'trust and trust' must be firmly established in the insurance business by quickly settling the differences with the private companies. Sadharan Bima Corporation is the only tool to solve the 'confidence and trust' and 'image crisis' of the insurance industry. To overcome the current crisis in the insurance sector, the place of 'trust and confidence' needs to be strengthened by settling insurance claims at the earliest. In this case, the Board of Directors of Sadharan Bima Corporation has to come forward to overcome all obstacles to eliminate the 'image crisis'. SadharanBima should always take the initiative to pay small claims quickly. Due to these claims, the insurance company has gained bad reputation in the market. Therefore Sadharan Bimamust take the initiative of overall cooperation to keep the private companies alive.
SadharanBimashould be universal. All private insurance companies should give equal attention to claims. In SadharanBima, including the final survey report, all the claims filed by the insurance companies up to the year 2021 should be settled and the financial status of the private companies should be improved.
According to my knowledge, all the documents including the final survey report of 24 insurance claims raised from 2016 to 2021 of a company started in 2000 have been provided to Sadharan Bima but they have not been settled yet. This bodes ill for the insurance industry. This matter should be considered by all parties. Without paying the claims of the Sadharan Bima private insurance companies, the companies are going bankrupt by applying LPC or Loss participation clause against these outstanding claims year after year. If the claims were settled on time, the companies would have been spared the extra financial losses they had to pay to Sadharan Bima every year due to claims and the financial base of the companies would have been strengthened.
To make general insurance self-sustainable, private insurance companies must take measures to pay off all dues of Sadharan Bima promptly. Sadharan Bima should take immediate steps to stop treaty renewal of those insurance companies that default in payment of Sadharan Bima dues. If necessary, the insurance companies can also be warned by letter. Non-payment of quarterly premiums as per the terms of the treaty will require Sadharan Bima to take the drastic decision of not accepting subsequent quarterly statements or borderex.
One of the reasons for the uneven competition in the present insurance market is the collection of business from the market by way of additional commissions without paying the dues of Sadharan Bima. It must be resisted collectively. In this regard, the Insurance Development and Regulatory Authority has taken a special initiative through a circular issued on September 7. Also thank you once again for the instructions regarding the mandatory filling of payment related information in case of money receipt issue from UMP system. I believe that it will play a helpful role in establishing good governance in the insurance industry.
(Mir Nazim Uddin Ahmed, Managing Director and CEO, Islami Commercial Insurance Company Limited)

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