The Financial Express

Accident insurance and financial security -- Bangladesh perspective

Evaly and Fianancial Express Evaly and Fianancial Express
Accident insurance and financial security -- Bangladesh perspective

What is the difference between aircraft accident on the one hand and bus, train or motorcycle accident on the other? All accidents are accidents. Every single accident is unfortunate and undesirable. Still our reactions vary. In case of aircraft crash, people from across the society, concerned authorities, governments and even world leaders express their sympathy. From rescue operation to insurance claim settlement, all concerned show their utmost sincerity. This is what everybody expects. But a completely different scenario prevails in case of other accidents, particularly road accidents.

 Road accident has become a normal phenomenon in Bangladesh. Every single day, people die from road accidents in different corners of the country. Many highways are death traps for travelers. Different types of vehicles ply these roads. The easybike revolution has increased the rate of highway accidents manifold. Government's steps to remove these vehicles from highways didn't work. The transport is cheap, convenient and at the same time faster than manual transports like rickshaws and bull carts. The advantages have made the vehicle popular to the common people and low income groups.

Every year casualties occur due to accidents in inland water ways, too. Few days back, the incident of boat capsize in a river near Barisal caused death to a number of people. Such accidents have become so frequent and that these hardly draw serious public attention. Some civil society organisations occasionally arrange human chain, protest rallies, press conference or appear on TV talk shows to express their concern and create pressure on the government to take action. But hardly the scenario has changed. A large number of people become invalid and disabled due to the accidents. Sometimes these people are the only earning members of their families.

A number of general and life insurance companies operate in Bangladesh including two state owned corporations-- Jibon Bima  and Sadharan Bima. But there is a negative attitude towards insurance in Bangladesh, especially in case of life insurance. People don't like to buy life assurance policy unless and until they are forced to do so. Life insurance companies appoint agents for selling their policies of different categories. Agents in most cases don't get any fixed salary; they move from door to door and try to allure clients to buy insurance policies -- at times through false information. It is this marketing approach of insurance companies that is responsible for the negative perception among common people. Most insurance companies offer traditional insurance products. They fight each other for getting greater market share without offering innovative and attractive products. As a result, survival of some companies is at stake. This is true if they fail to diversify their products and expand their market. They grossly ignore the fact that for insurance market sky is the limit. They can include a large number of people under the safety net of financial security. This can be found clearly evident in most advanced countries where insurance plays a key role in providing security to the citizen in scores of areas. 

In Bangladesh, insurance cover for accidents can help numerous people to lead a better life and not languish in utter misery. As regards insurance cover for accidents, there are two things -- one is affordability and another is awareness about financial security. A section of people are there who can afford insurance, but due to a pervasive negative perception about insurance, they don't like to take insurance cover. Another segment - the poor people -- cannot afford insurance cover, and more over they are unaware of the provisions of insurance.

 A comprehensive approach is needed involving the government, insurance companies and other stakeholders to develop the insurance industry as well as to expand the range of its financial security for the people, particularly for those faced with hardship due to accidents of various kinds. 

Government's decision to make insurance cover mandatory for various sectors will bring large number of people under insurance provisions. Insurance companies are needed to design insurance policies accordingly to provide required financial security that adjusts with the customers' affordability. Accident insurance cover needs to cover all passengers and driver-helper or any other transport worker who works under constant risk of death or injury. The transport companies pay taxes and VAT to the government. Similarly, they may be asked to insure all concerned while traveling. Insurance premium will be paid by the transport companies.

Besides death and injury from road accidents, accidents in construction sites are equally threatening to cause misery to the family members or dependents of the victims. Steps are urgently needed to bring construction workers under the fold of insurance. The onus here, more than in case of transport accidents, rests with the construction firm that engages the workers. So, it is the foremost duty of the construction firms to ensure that the workers are well protected under insurance cover.


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