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The Financial Express

Insurers hit hard by pandemic

2019 records better growth, says budget doc  


| Updated: June 07, 2020 15:45:19


Representational image Representational image

The gross premium of 33 life insurance companies rose by nearly 7.0 per cent in 2019 before the arrival of the novel coronavirus in the country.

The rate for 46 non-life insurers also grew by nearly 9.0 per cent last year.

The government's budget documents have prepared the data for one of the key financial sectors.

But the business of the insurance sector may be hit hard this year in the aftermath of Covid-19, top industry executives feared.

They said achieving a positive growth in 2020 appears to be a big challenge as economic activities have suffered a blow since March last.

Shiekh Kabir Hossain, president of the Bangladesh Insurance Association, a group of private life and non-life insurers in Bangladesh, said that insurance business depends on the economic activities that were affected during the lockdown that lasted more than two months.

"The sector has been hit hard by the coronovirus and there will be poor growth in 2020," he told the FE.

Mr Hossain, also chairman at the Sonar Bangla Insurance Company, said there has been less-than-expected growth in exports and imports in recent months, which had impacted much of non-life business.

He said, "To my mind, the life firms will be much affected this year as agents cannot visit door to door due to the pandemic."

Khaled Mamun, CEO and managing director at the Reliance Insurance Company, a leading privately-owned non-life insurer, told the FE that the sector will be affected this year in a way that has never been seen.

Mr Mamun said his firm's business dipped by around 65 per cent in April alone. May's data also remained the same, he added.

He said marine insurance is the life blood of non-life insurance companies. "Marine business is almost zero. How will we grow this year? he questioned.

He said only some properties insurance has been continuing.

Jamal M A Naser, CEO at the National Life Insurance Company, told the FE business has been stagnant since March 26.

"We have not been not in the field for the last few months. So our earnings shrank significantly," he said.

But Mr Naser said if there is normalcy in economic activities from this month, then there is a possibility of having a positive balance sheet in 2020.

The gross premium of life firms in 2019 was Tk 96.1 billion or 6.85 per cent.

In contrast, non life firms grew by 8.6 per cent or Tk 36.8 billion, including the state-owned Sadharan Bima Corporation.

jasimharoon@yahoo.com

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