Problems and prospects of insurance in Bangladesh : a study on employees’ perceptions
Manik, Abul Hasnat (2025)
Manik, Abul Hasnat
2025
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2025052716791
https://urn.fi/URN:NBN:fi:amk-2025052716791
Tiivistelmä
The insurance industry plays a vital role to ensure financial stability and economic resilience. These are performed by offering risk management and financial protection. Despite the promising potential of insurance sector of Bangladesh, it remains underdeveloped comparing to its regional counterparts. The underperformance of this sector is attributed to different issues. They are, for example, regulatory inefficiencies, delayed claim settlements, lack of transparency, and insufficient consumer trust.
This thesis explored the profitability, growth, and obstacles of insurance industry of Bangladesh. The thesis focused on macroeconomic factors, company-specific variables, and regulatory reforms. This also examined the role of regulatory efficiency, microinsurance and bancassurance. The thesis compared insurance companies in Bangladesh against macroeconomic variables. Inflation, interest rates, and GDP growth, as well as the impact of regulatory reforms on improving governance and consumer trust are the main variables. The thesis looked into strategies to increase market penetration, financial inclusion, and profitability. For policymakers, insurance companies, and regulatory authorities, the findings of this research are crucial to address sector growth and potential.
A quantitative research methodology was used for the study, involving the collection of primary data through an online survey and the analysis of secondary data from literature. A total of 65 employees from various insurance companies in Bangladesh participated in the survey. The study sought to understand how macroeconomic factors, regulatory reforms, company-specific factors, and emerging technologies affect the sector’s performance. The survey used closed-ended questions to ensure consistency and to quantify the results. Percentage analysis was conducted to predict trends within the insurance industry.
The results showed that macroeconomic factors, including inflation, interest rates, and GDP growth, have a significant effect on the profitability of insurance companies in Bangladesh. A majority of respondents (52%) indicated that these economic conditions influence the demand for insurance products, investment returns, and premium pricing. Furthermore, company-specific factors such as underwriting risks, investment strategies, and capital management are critical for financial stability and profitability, with 67% of the respondents emphasizing the importance of risk management and capital allocation. The thesis also revealed that regulatory reforms, particularly those introduced by the Insurance Development and Regulatory Authority (IDRA), have enhanced consumer trust and trans-
parency in the sector. However, challenges such as bureaucratic inefficiencies, delayed claim settlements, and lack of transparency still hinder corporate development. The study found that bancassurance and microinsurance have the potential to increase market penetration and financial inclusion, with 70% of the respondents stating that microinsurance could reduce financial exclusion, particularly for rural and low-income populations.
To modernize Bangladesh’s insurance sector, the study emphasized the need for improvements in regulatory reforms, transparency in claim settlements. Addressing operational inefficiencies, developing microinsurance products, and embracing bancassurance can enhance market share, consumer trust, and economic impact. Regulatory and technological advancements are vital for the sustainable growth of Bangladesh's insurance industry.
This thesis explored the profitability, growth, and obstacles of insurance industry of Bangladesh. The thesis focused on macroeconomic factors, company-specific variables, and regulatory reforms. This also examined the role of regulatory efficiency, microinsurance and bancassurance. The thesis compared insurance companies in Bangladesh against macroeconomic variables. Inflation, interest rates, and GDP growth, as well as the impact of regulatory reforms on improving governance and consumer trust are the main variables. The thesis looked into strategies to increase market penetration, financial inclusion, and profitability. For policymakers, insurance companies, and regulatory authorities, the findings of this research are crucial to address sector growth and potential.
A quantitative research methodology was used for the study, involving the collection of primary data through an online survey and the analysis of secondary data from literature. A total of 65 employees from various insurance companies in Bangladesh participated in the survey. The study sought to understand how macroeconomic factors, regulatory reforms, company-specific factors, and emerging technologies affect the sector’s performance. The survey used closed-ended questions to ensure consistency and to quantify the results. Percentage analysis was conducted to predict trends within the insurance industry.
The results showed that macroeconomic factors, including inflation, interest rates, and GDP growth, have a significant effect on the profitability of insurance companies in Bangladesh. A majority of respondents (52%) indicated that these economic conditions influence the demand for insurance products, investment returns, and premium pricing. Furthermore, company-specific factors such as underwriting risks, investment strategies, and capital management are critical for financial stability and profitability, with 67% of the respondents emphasizing the importance of risk management and capital allocation. The thesis also revealed that regulatory reforms, particularly those introduced by the Insurance Development and Regulatory Authority (IDRA), have enhanced consumer trust and trans-
parency in the sector. However, challenges such as bureaucratic inefficiencies, delayed claim settlements, and lack of transparency still hinder corporate development. The study found that bancassurance and microinsurance have the potential to increase market penetration and financial inclusion, with 70% of the respondents stating that microinsurance could reduce financial exclusion, particularly for rural and low-income populations.
To modernize Bangladesh’s insurance sector, the study emphasized the need for improvements in regulatory reforms, transparency in claim settlements. Addressing operational inefficiencies, developing microinsurance products, and embracing bancassurance can enhance market share, consumer trust, and economic impact. Regulatory and technological advancements are vital for the sustainable growth of Bangladesh's insurance industry.
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