Is Bangladesh going through an insurance revolution?

Green Delta Insurance expects big gains as Bangladesh middle class growth surges

November 25, 2015

As emerging market economies experience strong middle class growth, the insurance realm is blossoming alongside these demographic changes. Farzana Chowdhury and Nasir Choudhury from Green Delta Insurance discuss the Bangladesh insurance market and the potential for greater penetration in insurance in Bangladesh.

World Finance: As emerging market economies experience strong middle class growth, the insurance realm is blossoming alongside these demographic changes. 

Here to share insight about how the industry is evolving: Farzana Chowdhury and Nasir Choudhury.

First let’s talk about how the middle class growth has evolved?

Farzana Chowdhury: I think the middle class growth has been enormous, for the last 11 years we have been enjoying this over six percent of GDP growth. I mean, a few years ago, I mean the per-capital income was less than $500 but now it’s over $1,200 and because of the economy growth we are having a lot of opportunities for young people to join in various industries like insurance, banking, non-financial institutions.

Bangladesh is the second largest exporter country in the world, so with this expansion of the economy’s growth, we have seen in the insurance industry a lot of insurance needs are coming up at the moment; in addition, you know, to the traditional insurance covers that we have been giving them.

World Finance: So what I they calling for in terms of their insurance needs?

Nasir Choudhury: Without the insurance, no added economic growth, now we have achieved lower middle class, middle-income group now, we are giving proper protection, insurance protection to the government and industries. And they are getting maximum support from the banks and insurance industry.

And the young generation, a lot of people we are seeing in Bangladesh, they are coming for work, for different industries. And we are getting more interest from industry compare to other countries. We have got cheap labour, of course. In Bangladesh we have a lot of… we are giving them a lot of training facilities, to the workers. And insurance cover they are getting … we are expecting the developed countries to take more labour from Bangladesh.

World Finance: So can you tell me Nasir is it mostly corporate or personal insurance that they are looking for?

Nasir Choudhury: It is both, but mostly in Bangladesh’s insurance industry at the moment, we are giving more attention to the corporate. Because we are getting business from them. Unless you give proper cover, proper insurance protection, the industry will not succeed, you know?

World Finance: Now Farzana tell me how do you start to overcome barriers related to lack of awareness about your industry?

Farzana Chowdhury: We are the largest insurance company in Bangladesh for the last 30 years.  Even having the market share of 15 percent you will be surprised to know that our market penetration of insurance is lower than one percent.  Awareness is actually embedded everywhere, in every activity. We have a motto; to have insurance coverage for everyone.

We do a lot of activities, we do branding, improving our brand image. And we do a lot of marketing activities. Green Delta has always been a pioneer in coming up with innovative products and services.

We have also gone into the health sector; we have developed a health package for the people of our country. Also, we have joined hands with the government, where we will be giving insurance packages to 30,000 people in one area. That is their pilot project; and then we can, you know, increase all over the country. This is how we are trying to create awareness and branding at the same time.

World Finance: Nasir tell me, what do you think is going to be the growth projections for your country, in the decade ahead?

Nasir Choudhury: This is fast growing now, our people are not very much insurance minded, you know. And we have to teach them how to get their protection from the insurance industries, you know. And we have got an insurance association with all the insurance companies and we are trying together to increase the capacity of interest cover even to the people who are penetrated into the share market. We have gone to the capital market and we are going to the insurance training side. And all the insurance companies are coming together and go for even better services, better covers to the public, to the insurance public.

World Finance: Finally, can you tell me Farzana where do you place your company in the growth plans Nasir has just spoke off?

Farzana Chowdhury: We have the largest market share in the country and the insurance market. We are having 15 percent growth roughly every year. So with the penetration, like I mentioned, the government project that we are in. There are other innovative products that we have: we are into a crop insurance project with the IFC – IFC with us as an equity partner.

We launched a health insurance product for the corporate sector, and we have a comprehensive insurance package for women: which gives trauma allowances for the acid victims, rape victims and those who are exposed to road rage, in addition to the personal accident. So that will give us a first mover advantage. So we will be having 20 to 25 percent growth. This is what we are thinking of: improving the corporate governance. You have the international standard enterprise risk management and give better services to our people and, you know, maximising their benefits at a minimum cost.

World Finance: Farzana and Nasir thank you so much for joining me today. 

Farzana Chowdhury: Thank you very much.

Nasir Choudhury: Thank you, thank you.