Dhaka, Tuesday, 24 May 2022

Booming economy to help insurance bloom into $1.5b sector by 2020

Booming economy to help insurance bloom into $1.5b sector by 2020

Staff Correspondent : Bangladesh's life insurance market is likely to expand US$1.5 billion in the next three to four years, driven mostly by a growing economy, a senior MetLife executive has said.

"Currently, Bangladesh's life insurance market is around $1.0 billion a year and we expect it will expand at least 50 per cent in around 2020," Chris Townsend, the US-based insurer's Asia president, said.

Bangladesh's economy has grown over 6.0 per cent in past decade and the life insurance has also advanced steadily, he said, drawing a close relationship between the GDP growth and the insurance sector. "Insurance growth outpaced the GDP rate," Mr Townsend, who had visited Dhaka in the past week, told in a recent interview in Dhaka, and called the industry "amazing."

He has been president of MetLife's Asia region since 2012. He is also a member of the company's executive group.

He oversees all of MetLife's businesses and operations across 12 markets in Asia including Bangladesh and he said that the country's market is one of the fastest growing in the continent.

He, however, noted Bangladesh's insurance penetration remained lowest in South Asia as the rate in other countries was around 3.5 per cent.

"Bangladesh's penetration rate is around 0.5 per cent, which indicates the level of development of insurance sector in a country," he said.

Penetration is measured as the ratio of premium underwritten in a particular year to the GDP.

For a robust growth of insurance business, he placed importance on the partnership between the banks and the insurers.

He believed that such partnership with the banks will accelerate insurance growth and enhance its penetration tremendously.

Terming it a key challenge for Bangladesh, he said most of the countries and the insurers of the region had distribution channels named bancassurance.

"We believe the biggest opportunity for the growth in the sector is bancassurance…," he said.