Fostering Insurance Awareness among the Masses in Bangladesh: Challenges and Opportunities

What is it about?

The economic growth of Bangladesh is now remarkably higher compared to any other time of the country. This has been observed primarily in last few decades in Bangladesh. According to World Bank Report, the Gross National Income (GNI) tremendously increased from $100 to $1,220 between 1972 to 2015. Now, Bangladesh is trying to achieve its goal to be a middle-income country by 2021 by reaching steady growth of 8% per year. Since Bangladesh is a country with full of natural calamities and risks in economic development, insurance industry has got very high potential in this country. It is the most potentials place for insurance business in the world due to its vulnerable economy and God gifted disasters. In the report, Lloyd's identified the under insurance or insurance gap, which depicts the value of assets at risk not covered fully by insurance policies in Bangladesh. Among the 43 countries covered in the report, Bangladesh has the largest insurance gap, which stands at $5.50 billion, or 2.10 percent of the country's gross domestic product (GDP). Insurance premium per capita in Bangladesh is just USD $8, a statistic that masks the fact that most people do not have insurance at all (Vaughan, & Vaughan, 2007). Research also shows that showed that 1% rise in penetration in insurance sector of Bangladesh can contribute to as much as $4.4 billion in savings in the country. In comparison to the trend of per capita income $1602 as of 2017, the insurance penetration rate in Bangladesh is 0.70% in global comparison during 2016 which is very low compared to other countries of the world. Out of which only 0.2% consists of life insurance in Bangladesh. This very low penetration rate in insurance sector is very alarming for a country having 170 million people. On the other hand, the highest insurance penetration in the world is at 18%, belonging to Taiwan. According to the World Bank statistics, only 4 out of 1,000 people in Bangladesh have life insurance policies which is one of the lowest in the world. Hence, there is a very high potentials of insurance business in Bangladesh.

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Photo by Imtiaz Image on Unsplash

Photo by Imtiaz Image on Unsplash

Why is it important?

Since Bangladesh is a country with full of natural calamities and risks in economic development, insurance industry has got very high potential in this country. It is the most potentials place for insurance business in the world due to its vulnerable economy and God gifted disasters.

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