The Daily Star
General insurance companies' gross premium income grew by 16 percent in 2008 despite a reduction in business activities in the last quarter on the global recession coupled with a drastic fall in commodity prices.
There are 43 private players and one government-owned player in the general insurance sector that earned around Tk 1,245 crore last year, an increase of 15.96 percent from Tk 1,073 crore in 2007, according to available data.
“Increased economic activities are pushing the industry's premium up,” said Nasir A Chowdhury, managing director of Green Delta Insurance that earned the highest premium worth Tk 140 crore after state-owned Sadharan Bima's around Tk 142 crore.
According to the sector people, fire insurance generated the highest premium followed by marine last year.
The third highest premium earner is Reliance Insurance with Tk 104 crore followed by Pragati that earned around Tk 91 crore.
Gross premium in a general insurance company means net premium, plus operating and miscellaneous expenses and agent's commissions.
Rafiqul Islam, chairman of Bangladesh Insurance Association, said two key features governed the growth in the sector in 2008 -- a huge increase in commodity prices and import of some 15,000 reconditioned motor vehicles.
He sees great prospects for the industry amid increasing awareness among the people.
The insurance sector is growing with a rise in industrial activities, he added.
“The sky is the limit for the companies,” said Islam, also the managing director of Pragati Insurance.
Nasir Chowdhury said the country has a huge untapped market and the future is bright for general insurance companies because of the emergence of upper-middle-class income groups empowered with better spending power.
“The demands for housing and automobiles have increased and the insurance needs have also gone up,” said Chowdhury who has over 50 years of experience in insurance industry.
But 2008 was not good for all the companies. Nine out of 44 companies had negative growth with the highest 20.53 percent by Union Insurance. Another nine companies posted single-digit growth and the remaining 26 grew by double digits.
Currently Bangladesh's insurance sector is being governed by the age-old 1938 Act. Recently the government approved new laws in a cabinet meeting to replace the old one.
Industry people said the new laws, if passed, would help the sector grow further.
There are 17 life insurance companies operating in Bangladesh.