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Insurances Management
Insurances in Bangladesh is a financial system where an institution (insurance company) takes a certain amount of money (premium) from customers and provides them with financial assistance in the event of danger or loss. It is a risk management tool that helps individuals or organizations when they face financial losses.
The main functions of insurance are:
- Risk distribution: In the event of a loss to a single person or organization, the insurance company helps to the extent of the loss, which is divided between the customer and others.
- Premium payment: The customer pays a premium for a certain period of time and receives a certain amount of money in the event of a danger or loss.
Main types of insurance:
- Life insurance: Covers life-related risks (death or disability).
- Property insurance: Protects against damage to vehicles, homes, businesses, etc.
- Health insurance: Provides assistance for medical or health-related expenses.
It helps reduce risk and provides financial protection at the individual or business level.
Development of Insurances Business in Bangladesh
Insurance business is not new in Bangladesh. The country has a long history of insurance business. Insurance business has been going on since the British era. In this subcontinent, The aforementioned insurance law came into effect in the then Pakistan after the partition of the country in 1947.
However, some amendments were made in 1954 and 1958. Although the insurance business was nationalized in India in 1957, it was privately owned in the then Pakistan.
After Bangladesh became independent in 1971, changes were brought in the insurance sector. All the insurance companies in the country were nationalized by Presidential Order No. 95 of 1972. At that time, 75 insurance companies were operating in the country.
All insurances companies were included in 5 corporations, namely:
- Bangladesh National Insurance Corporation.
- Karnaphuli Insurance Corporation.
- Teesta Insurance Corporation.
- Surma Life Insurance Corporation.
- Rupsha Life Insurance Corporation.
The National Insurances Corporation did not act as a separate body. It was a central corporation, whose main responsibility was to supervise and regulate other insurance corporations, Teesta and Karnaphuli were responsible for general insurance activities, and Surma and Rupsha Insurance Corporations mainly conducted life insurance business.
Later, on 14 May 1973, the ‘Insurance Corporation Ordinance’ was promulgated and the five insurance corporations were converted into 2
corporations. Namely:
What, the state-owned Life Insurances Corporation and General Insurance Corporation failed to maintain their administrative, management and organizational efficiency. As the saying goes, ‘Government money is a shield in the river’. As a result, later privately owned insurance
companies such as-
In the field of life insurance, the privately owned insurances companies are:
- National Life Insurance Company Ltd.
- Delta Life Insurance Company Ltd.
- Sandhani Life Insurance Company Ltd.
As of now, a few Islamic safeguard companies are moreover working in Bangladesh. For illustration, Distant East Islamic Protections Company. This protections trade is working concurring to Islamic Sharia law. Outside protections companies such as American Life Protections Company are moreover working in Bangladesh.
Therefore, it can be said that the protections trade in Bangladesh is working side by side with government, private, remote and indeed Islamic protections companies. In this manner, the protections trade in this nation is able to create a solid position which is playing an critical part in making the wheels of the economy more dynamic.
The denationalization of the protections trade has brought exceptional victory. Bangladesh Protections Foundation was presented to extend and make the protections framework in Bangladesh energetic. Presently let us talk about the exercises of this organization in detail.
Bangladesh Insurances Academy
In 1972, all insurances companies in Bangladesh were nationalized. The main objective behind nationalization was to provide social services and protect the interests of the people. At that time, most of the insurance companies in East Pakistan were owned by Westerners, who paid little attention to making the insurance system efficient and strong in the country.
As a result, insurance companies in Bangladesh faced several problems in running them. Among them, the shortage of skilled and qualified people was very noticeable. Therefore, to meet the growing demand and ensure better service, the Bangladesh government introduced the Bangladesh Insurance Academy in 1973, which was formed to achieve the following objectives.
- To award degrees, diplomas, and certificates in insurance for the development, organization, and professional education in the insurance sector.
- To conduct research to expand the insurance business in the country.
- To provide in-service training for people involved in the insurance profession.
- To encourage and facilitate publications on insurance subjects.
- To establish relations and maintain close contact with domestic and foreign organizations related to insurance.
- To provide coaching facilities for obtaining various degrees, diplomas, and certificates on the insurances profession.
- To provide various awards and medals to encourage those who will make extraordinary contributions to the insurance business and education.
One more related topic: Top 10 Insurance Companies in Bangladesh
The role of natural disaster insurances in Bangladesh
Bangladesh is one of the countries in the world that is prone to natural disasters. Floods, cyclones, tidal waves and tornadoes are Bangladesh’s constant companions. Several regions of the country have already been identified as areas full of extreme natural hazards. The coastal region is one of them. Often, these areas suffer extensive damage to life and property. The amount of damage is increasing day by day.
For case, as a rule once a year, a ocean storm hits the coastal locale. This time it has happened three times. Individuals in regions inclined to normal catastrophes are exceptionally concerned around their future monetary security. If individuals in these ranges kick the bucket, their family individuals have to take their put. If they ended up crippled or lose their business, they have to live an cruel life with their families.
Insurances can play a colossal part in giving future budgetary security from this questionable and hazardous circumstance. Presently let’s discover out how. In expansion to giving money related security for life and property, the protections division can be one of the primary sources of the national budget.
The cash amassed by the safeguard segment can moreover play a positive part in expanding the country’s national improvement program. Which can free the country from reliance on remote aid.
The level of normal catastrophes in the nation is expanding day by day. Due to climate alter, visit tornados, surges and dry seasons are presently occurring.
Bangladesh has ended up one of the motivation of talk in the universal field. In the interim, naturalists and researchers have communicated their fear of major normal catastrophes in 2008 and have sounded a caution. Natural researchers have distinguished Bangladesh as one of the nations on the peril name of natural disasters.
According to climate specialists, due to climate alter, in expansion to rehashed violent winds like Sidr in Bangladesh, the dissolving of the Himalayan mountains will too cause major surges. Concurring to specialists, whereas tornados and surges utilized to happen each few a long time, presently different normal catastrophes counting surges, violent winds and dry spells will happen each year. This will cause tremendous misfortunes of life, property and assets. Due to the tall populace thickness of Bangladesh, the number of influenced individuals will be much higher.
But it has not been possible to develop an effective system to deal with these natural disasters like in countries like Japan, the United States, Taiwan, etc. So much for the future. There are also various inconsistencies in the information about the events that have occurred.
After a natural disaster, it is not possible to determine the exact statistics of the victims in a timely manner. Every year, millions of people are victims of such cruel acts. Every time a disaster like a cyclone, tidal wave, flood or drought occurs, various remedies are talked about. But when the disaster passes, all the plans are washed away.
Insurances companies can play a positive role in this regard. Now, let us discuss in detail various facts about the damage caused by natural disasters in Bangladesh.
Final words:
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