BG-NewsDesk: For the insurance industry to flourish, it is crucial to increase its contribution to the country’s overall economy by enhancing public awareness about the benefits of insurance. Despite efforts to promote this sector, the industry still faces challenges in earning trust, goodwill, and institutional support.
Since the year 2000, 1 March has been observed as Insurance Day in Bangladesh. However, Sheikh Kabir Hossain, President of the Bangladesh Insurance Association (BIA)—an organisation representing insurance company owners—believes that the goals of this observance have not been effectively achieved.
In an interview, he remarked:
“As in previous years, various events are being organised across the country on Insurance Day to popularise the sector. The objective is to familiarise people with different types of insurance and their benefits. However, public interest and awareness remain low. There is still a great deal of work to be done to change this perception.”
Challenges in the Insurance Sector
The insurance industry currently contributes 5% to the national economy, a figure that could be significantly higher with proper development. However, several factors have hindered its growth.
One major issue is a lack of trust in the sector due to past instances of insurance companies going bankrupt, leaving policyholders uncertain about the reliability of their investments. Furthermore, bureaucratic inefficiencies and a lack of government support have compounded these challenges.
Hossain acknowledged the bureaucratic hurdles preventing sectoral reforms, stating:
“In many countries, vehicles are not allowed on the roads without insurance. On the last Insurance Day, I urged the Honourable Prime Minister to reinstate mandatory vehicle insurance by amending a section of the Road Transport Act, 2018. The Prime Minister agreed in principle, but the necessary amendments have not yet been implemented.”
Revenue Loss from Lack of Mandatory Insurance
Due to the absence of compulsory vehicle insurance, the government loses an estimated Tk 878 crore annually. This includes:
- Tk 849 crore in taxes and value-added tax (VAT)
- Tk 28 crore in stamp duty
The Road Transport Act, 2018, influenced by transport owners, allows vehicles to operate without insurance coverage, a policy that has adversely affected both the insurance industry and government revenue collection.
“Since this law came into effect, we have repeatedly highlighted that not only is the insurance sector suffering, but the government is also losing significant revenue,” Hossain added.
National Insurance Day and Its Historical Significance
This year marks the fifth celebration of National Insurance Day, with Prime Minister Sheikh Hasina expected to inaugurate the event at the Bangabandhu International Conference Centre in Dhaka.
The observance of 1 March as National Insurance Day honours Bangabandhu Sheikh Mujibur Rahman, who joined Alpha Insurance Company of Pakistan on 1 March 1960. Recognising this significant milestone, the Bangladesh government officially declared 1 March as National Insurance Day in 2020, following a recommendation from the Insurance Development and Regulatory Authority (IDRA).
Initially classified as a ‘B’ category national day, it was later upgraded to ‘A’ category in 2022, further highlighting the government’s commitment to honouring Bangabandhu’s legacy and promoting the insurance industry.
Across districts and upazilas, the day is celebrated with processions, insurance fairs, discussion meetings, and cultural programmes to boost public awareness and participation in the insurance sector.
The Future of Insurance in Bangladesh:
While efforts continue to popularise and expand insurance coverage, the sector still requires stronger government support, mandatory policies, and better public confidence to achieve its full potential. Strengthening regulatory oversight and ensuring insurance companies’ credibility will be key to rebuilding trust and increasing the industry’s contribution to the national economy.