Three Pillars needed for reforming Insurance Sector, Says IDRA Chairperson

Staff Correspondent: The Insurance Development and Regulatory Authority of Bangladesh (IDRA) has come up with a three-pillar model of reforms for making Bangladesh’s insurance sector more robust by building up customer confidence and improving regulatory supervision as well as institutional capacity.

In a discussion titled “Future Prospects and Challenges of the Insurance Sector in Bangladesh” held at Hotel Ekattor in Bijoynagar, Dhaka, on Saturday (27 June), IDRA Chairperson Mir Nadia Nivin said that three pillars are required for the reforming process in the sector – restoring policyholder confidence, enhancing regulatory and investment systems and building capacity of the sector.

The event was organized by the Insurance Reporters Forum (IRF).

She noted that the number of pending insurance claims in the country has been estimated to stand at around Tk 7,000 crore. While a certain part of the liabilities relates to inherent problems within the insurance sector, some other part is related to malpractices of particular insurance firms.

She further added that efforts are being made to sort out these claim settlement problems to bring back stability in the market environment.

Mir Nadia Nivin also focused on the need to address complexities associated with asset liquidation in various insurance companies, as she saw it as a big impediment to financial discipline in the industry.

She pointed out the importance of developing a risk-based supervision system in order to increase transparency, accountability and regulatory effectiveness in the industry.

She said that with a stronger regulatory mechanism, one can find the risks on time and thereby provide proper protection to the policyholders.
Considering the exposure of Bangladesh to natural hazards, the chairperson of IDRA stated that the insurance sector has become an essential tool for ensuring resilience and economic stability of the country.

She called for the development of microinsurance products and service delivery mechanism in order to increase financial inclusiveness, especially among poor and hazard prone segments of society.

Prof. Dr Rashed Al Mahmud Titumir, Adviser to the Ministry of Finance & Planning Affairs, was the Chief Guest at the seminar.

Among the distinguished guests were representatives from important organizations of the industry including BIA and BIF, as well as others.

The speakers, as a group, emphasized the importance of good governance, technology transformation, and greater trust to ensure the sustainable future of the insurance industry of Bangladesh.