Course Title: Insurance and Risk Management

Course code: FIN0407

Submitted to:
Shaikh Golam Rakib
Lecturer
Northern University of Business and Technology Khulna

Submitted by:
Name: Aisha Akter Easha
ID: 01170110143
Section: 10B
Answer to the question (a)

The insurance industry is not only central to the creation of a stable business
environment but also critical for the reduction of the financial burden on the
government during natural and economic crises .Bangladesh is the most underinsured
country in the non-life insurance category, despite standing to lose as much as 0.8% of
its GDP to natural disasters a year 1. In 2018, the insurance premium earnings, which
refers to the recurring fee paid by the policyholder for the insurance contract, rose by
11% to a value of $1.47 billion 2. There are 77 insurance companies in total – 32 life
and 45 non-life insurance providers.The role of insurance in managing risks in an
economy cannot be overstated. A resilient insurance sector can, in turn, have far-reaching
economic, commercial and social benefits for Bangladesh. facilitating risk transfer .

Answer to the question (b)

Bangladesh economy embraces huge risk in every sector because the country often
faces cyclone,draught and natural calamities even including political assaults and
economic issues like inflation, high interest rate, tax policy, deregulation etc. that
excavate the risks for the economy.First and foremost, insurance companies and
regulators should come forward to build awareness of insurance services as an
effective tool for managing financial needs. Suggesting mandatory insurance for
government property and health insurance for all, Insurance industry of Bangladesh
has very high potentials. For the development of balanced economic growth,
insurance can play an important role in a country. Individual can get protection of
their lives and properties by insurance. Hence, to make insurance services to the
potential customers visible and to provide smooth and quality services the use of
information technology is essential for the insurance companies

Here some suggestions from your own that how the existing situation of
insurance could be improved in Bangladesh?
Building awareness
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

There is a clear scope of improving on customer interaction in the insurance industry. The
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