Moniruzzaman Khan, SEVP, Head of Digital Business & Brand Marketing, Green Delta Insurance Company Limited (GDIC), explicates upon the current state of the insurance sector in Bangladesh, the prospects of digitalization, and how InsurTech will change the way we think about the industry.
The insurance sector has long been stigmatized among the general population in Bangladesh. Why do you think the negative perception of the industry has prevailed?
Through its journey of 45 years, the insurance industry in Bangladesh boasts 79 companies with 8000 branches all over the country. If we look at the ecosystem, with millions of customers at the heart of it, there are thousands of agents and workers rendering their services, both directly and indirectly. Nevertheless, in terms of product and policies, the market penetration is nothing much to write home about: less than 1% (0.97%) in a market teeming with 170 million people. One may wonder about the ‘why’ behind such a sorry state. I think there are two reasons for that. The first issue is the lack of trust: a majority of our population don’t believe in the insurance products and services; rather they believe that their invested money will never come back.
From a product perspective, Bangladeshis mainly refer to life insurance when asked about insurance. Most people are unaware of the numerous other types of insurance that exist. Rubbing more salt to the wound, there are few players in the market who resorting to some duplicitous practices fueled the mistrust even further. They have exploited people, particularly in the rural areas, where many individuals have scrapped together their hard-earned money hoping to get a handsome return down the line but ended up only getting scammed entirely by so-called “agents” of insurance companies.
On the other hand, affluent people of the society feel no need to get insured because they already have money and perceive insurance as a one-way investment which will not benefit them. These two reasons have substantially stagnated the growth of insurance in our country.
On top of these two, the lack of awareness makes the whole scenario much worse. People are not aware of all the risks and exposures that an insurance company covers. For many, insurance is nothing but a social taboo. The market failed to establish the notion that one can get insurance from anything, starting from health to your home to even luxury products one uses, for example, an expensive watch.
Green Delta Insurance Company Limited (GDIC) is investing a lot of resources towards digitalizing its services. How will digitalization ensure better services? How has the benefit to customers been so far?
Green Delta is the number one non-life insurance company in the private sector in terms of the consumer base, revenue, and brand perception and it has been so for decades. Three years ago, we became the first company to introduce digital insurance to Bangladesh, which mitigated any kinds of physical interactions and hassle of filling out forms. Being an innovation-led company, we continuously work on improving customer experience and making the overall process more accessible and more convenient. Digital insurance allows customers to avail of insurance by merely filling out a form and agreeing to our proposed quotation. Customers have the option to pay digitally, and after the payment has been made, they immediately receive a customized policy digitally and a physical version within 72 hours. We have been spending a considerable amount of time and resources to improve the digital insurance experience and are the first company in Bangladesh to work on the concept of paperless insurance. Make no mistake, it took a hefty investment to shift from a traditional paper office to a completely paperless office. Hopefully, we will be entirely paperless by next year. A significant portion of our customers are retail customers, and digital insurance brings a lot of extra benefits to these customers who no longer have to come to our offices to renew their insurance and can do it from the comfort of their homes. So, in terms of customer evolution, there has been a significant shift in recent times. As a car owner, I no longer have to worry about the hassle of going to an office to renew my insurance.
We were also the first company to launch comprehensive insurance for women in South East Asia known as Nibedita. Our MD & CEO, Farzanah Chowdhury, got recognized as the first local SDG pioneer of Bangladesh by UN Global Compact in 2016 for this initiative. Nibedita focuses on female safety and security, and women can avail of this service anytime, anywhere without having to come to us. Keeping customer convenience in mind, we are also developing a comprehensive mobile app for both iOS and Android. The app is in the beta stage currently, and we expect a full launch in the distant future. The reason I refer to it as comprehensive is that through this app customers can gain access to any end to end insurance solution, filing a claim to receiving payment–everything will be at their fingertips, just click away. It is a giant leap for a country whose insurance industry has still not fully developed. We want to develop a system where customer will not feel neglected or bored. We have made considerable investments in our ecosystem, and the results are slowly being evident. Consumers will always opt for the better experience, and that is precisely what Green Delta aims to ensure.
How much does brand perception affect customer motivation in the insurance industry? How crucial has the role of digital marketing/ communication become in the post-pandemic world?
Consumers nowadays love to accept something which has a better visual appeal. This is why brand perception plays a significant role in motivating them. For example, Green Delta being the number one name in insurance will always get first preference when anyone is seeking to get insurance. Undoubtedly, in the present context, digital marketing is very important. More than 90% of individuals in Bangladesh have mobile phones, and over 80 million people are connected to the internet so a brand can easily reach them through digital marketing which is much harder to achieve through conventional ways and will also cost a lot. Our focus, therefore, is sifted to digital marketing right at the moment.
GDIC is promoting a virgin concept like InsurTech in Bangladesh. What are the latest technologies GDIC is using to facilitate such digital transformation? How is GDIC trying to collaborate with partners?
We are aware of terms such as Fintech, meditech, agri-tech, etc., all of which have ushered in a new era in the respective fields. Just like these, InsurTech is an entirely new concept in the realm of insurance in Bangladesh. InsurTech is part of the broader financial system. It is not digital insurance but something that analyzes the individual needs of customers. If you buy a shoe, it will only fit you and not your brother or friend. Just like that, each customer has their own needs. Custom products are now the global trend where people seek products that are tailored specifically for them. They will be much happier in the long run with products that meet their expectations, and insure-tech has been designed to do that. It is a digital platform that utilizes machine learning and artificial intelligence to integrate big data and interpret behavior patterns of customers to figure out their lifestyle and expectations and formulate products accordingly. We will be able to cater to individual needs in a much efficient way than ever before.
Insure-tech companies are of two types: tech companies that provide or sell insure-tech products, the other is traditional insurance companies with a dedicated vertical to provide insure-tech products to the market. Partnership plays a huge role here as a tech company on its own will not be able to develop these products and will need help from an insurance company and will need to form partnerships. There’s also the subject of people going out of the core functions of a product and exploring other features. For instance, other than just calling and texting, which are supposed to be its core functions of a phone, people seek additional features such as camera megapixels and operating systems. These are called value-added services, and the customers of today look for them in every product. They want extra services that cater to their lifestyle. This is why the partnership is required for insure-tech so that they can gain insights and ensure value-added services. Reach is also a massive factor as small companies cannot reach to the mass, but big companies can market the product better and ensure there is a win-win situation for both of them. In addition, one partner endorsing another’s product and putting faith in another’s brand create trust among customers. All these will surely have a positive effect on the reachability and the distribution of products too.
What are the obstacles (legal/regulatory) that remain towards ensuring an end to end digital services in the insurance industry? What kind of government assistance is the industry seeking to overcome the hurdles?
There are two concerns in the field of digital insurance which require to be solved to greatly benefit all parties involved. The first one is the e-signature. Signature is a legal requirement, and the government is working on the deployment of e-signature, which will make the life of both consumer and the service providers easier. The second concern is the use of a physical stamp which is mandatory. Time has come to move to e-stamps. Bangladesh’s post office is currently working, and it has been initiated. Once these issues have been resolved, the entire industry will be able to embark on the digital journey in a more comprehensive manner. The present government is intensely focused on becoming digital, and we have experienced a lot of digital growth.
The present government has an extra focus on startup ecosystems and on empowering the youth. Being the youngest to arrive at the party, how can InsurTech be a part of this new ecosystem?
The younger generation is very interested in developing innovative solutions for the problems that exist in our society. They are eager to become entrepreneurs and want to launch their startup irrespective of the size. If we look at the emerging startups, they are all involved in providing technology-driven solutions. Having said that, in our country, most of the startups are unaware of the potential of InsurTech. I am personally very interested in interacting with youth and letting them know about the possibilities of InsurTech. The journey won’t be fulfilled in one day, and I believe the youth will soon start thinking about this game-changer and startup ecosystem that will be playing a huge role. Since innovation has always been embossed in the DNA of Green Delta, the company will never leave a stone unturned to provide the required support to startups who are willing to join the bandwagon.