Guardian Life Insurance Limited is the harbinger of improving financial inclusion and social safety net in Bangladesh through the various process & product innovations; transforming millions of lives with the magical power of life insurance.
According to the World Bank, half of Bangladeshis aged 15 or more remain without a bank or mobile money account of any kind. A significant number of women are financially excluded compared to men, which points to lower participation in entrepreneurship amongst women in our country. There are mainly two underlying reasons behind the poor state of financial inclusion; affordability and availability. One of the biggest obstacles of providing bank-based services to the most impoverished population is the cost associated with traditional banking methods. Responders of the World Bank’s survey expressed their disappointment over the cost of maintaining an account, for them having a bank account is a luxury which they cannot afford. Similarly, availability is another issue. They also asserted, financial institutions being too far away is another reason for them not having a bank account. Banks avoid operating branches in rural areas with poor population citing viability issues. The amount of resources spent on conducting transactions for the poor with a small balance and small transactions exceed the benefits.
Consequently, the number of life insurance holders in Bangladesh is disappointingly low. According to Swiss Re data, a leading global re-insurer, Bangladesh’s overall insurance penetration rate stood at a meagre 0.57% in 2018, the lowest in the emerging Asian communities. In the year 2017, the penetration rate was 0.55%. The rate is even lower among the impoverished population, which is more concerning. Insurance is a critically important tool for not only reducing poverty but also for helping those who have emerged from it to manage their risk and avoid falling back into the poverty trap. It also plays a significant role in improving financial inclusion.
Over the years, various entities have been trying to improve financial inclusion in Bangladesh. It includes both the government and NGOs who have taken numerous initiatives to bring the economically excluded under the umbrella of formal economic activities. However, a Life Insurance Company is not the primary picture that flashes onto one’s mind when talking about financial inclusion. So, where does actually Guardian Life fit in when it comes to Financial Inclusion?
Guardian Life Insurance Limited is the fastest-growing life insurance company in the country; it is jointly sponsored by Apex, BRAC and Square Group. They operate according to international standards and has been recognized for high-quality service while maintaining global compliance. GLIL aspires to work diligently towards financial inclusion and touch the lives of the underprivileged population with the magical power of life insurance as it provides both financial savings and family protection on the lives of this economic group. In line with the idea, GLIL is innovating numerous products that are playing a significant role in improving financial inclusion of Bangladesh, and they have set the standards of competence and reliability for others to follow.
GUARDIAN-BRAC BIMA (GBB): INSURANCE FOR THE UNINSURED!
Microinsurance is designed to help more people buy insurance coverage who were previously unable to afford it. It provides poor and low-income households with the means to protect themselves against the effects of financial risk due to death & total disability of their bread earner. Despite substantial growth in the insurance sector over the past decade, penetration still stands at a very meagre percentage; necessitating a massive need for overhauling. In such a situation, the progressive Insurance Companies have a pivotal role to play in developing this industry along with regulators and other stakeholders. Being the fastest growing life insurance company of Bangladesh, largest group insurer of the country, and a facilitator of “financial inclusion”, GLIL has undertaken a micro-insurance initiative that is ushering a new era in the sector. The effort has been acknowledged by various local and international bodies which included the magazine “Asian Banking and Finance”. They bestowed GLIL with the prestigious “Insurance Asia Award in 2017” for this initiative.
Significant Contributions of Guardian BRAC Bima (GBB) in the Microinsurance Industry
· 1+ crore lives under coverage
· 97% claim payout ratio
· 169 crores BDT paid in claims
Expanding Through Innovation and Joint Effort
Through Guardian-BRAC Bima (GBB), over 10 million beneficiaries of BRAC Microfinance came under the scope of GLIL’s credit shield micro-insurance program (including spouse). BRAC is the largest NGO in the world, with 88.6% of its clients (microfinance) being women. The entire proposition was developed in partnership with BRAC to ensure that it meets the needs of the community. It was enhanced so that the spouse of the borrower could also be covered, as in most cases; the spouse of the borrower inherits financial responsibility of the family and repayment of the debt incurred.
The GBB project has the combining factors to benefit all the stakeholders involved. It insulates BRAC from having to write off loans in the event of the death of the borrower. At the same time, GBB shields the borrower’s family from falling into a debt trap after the sudden loss of a family member. The insurance coverage ensures instant funeral benefit and outstanding loan repayment on behalf of the family of the deceased. The premium pricing is calculated by an accredited professional Actuary, ensuring proper risk assessment and enabling a low cost and a financially viable scheme. Finally, GLIL reaps the benefits of serving a massive client base. However, numbers alone cannot justify the magnitude of GLILs’ achievements. They are protecting millions of low-income families and their livelihoods across Bangladesh in the event of the death of a household member or the earner. Microinsurance is an important safety net against various risks for the poorest and most vulnerable people of Bangladesh. Guardian-BRAC Bima (GBB) is playing a significant role in keeping millions of Bangladeshis above the poverty line and help them to flourish despite the loss of a crucial family member.
In accordance with Guardian Life’s vision of ‘Insurance for All’, Bancassurance is the ideal opportunity to spread awareness regarding the importance of insurance in terms of risk mitigation. Guardian Life Insurance is one of the active proponents of pursuing Bancassurance at policy level while closely engaging with regulators.
BANCASSURANCE: A STEP TOWARDS RESHAPING THE DYNAMICS OF LIFE INSURANCE IN BANGLADESH
The concept of Bancassurance was originated in France in the 1980s, and quickly spread through Europe and now it is practiced all over the world. Bancassurance is essentially a distribution channel for insurance companies, they make use of the vast network of the banks to sell insurance products. Distribution channel is one of the key elements that helps facilitate insurance companies in growing and penetrating the market, functioning as arteries of marketing systems delivering services to customers. When insurance companies collaborate with banks they enter a guardianship of two regulatory bodies governing the process. This maximizes reach and security of the service propositions.
The role of Bancassurance in increasing Financial Literacy and Inclusion
According to the reports by Bangladesh Bank, there are 59 scheduled banks with an extensive network of 10,650 branches all over the country. Collectively, the bank branches have a widespread reach from the major metropolitan cities to deep into the sub-urban regions. In accordance with Guardian Life’s vision of ‘Insurance for All’, Bancassurance is the ideal opportunity to spread awareness regarding the importance of insurance in terms of risk mitigation. Guardian Life Insurance is one of the active proponents of pursuing Bancassurance at policy level while closely engaging with regulators. This platform will allow customer access to more information which may be more difficult through other marketing or distribution channels. Trust is a major factor when it comes to measuring the desired output of a product and banks have that business environment where customers do not hesitate when it comes to depositing their savings or making an investment. After sales customer care is a vital part of any business-client relationship, studies show that Bancassurance customers expressed a higher level of satisfaction from purchasing insurance through bank channels. The ease of making payments through their bank accounts, being able to regularly check their insurance details and access to assistance from bank employees in cases of queries or making claims have strengthened customer’s trust in the insurance industry globally.
Bancassurance is booming in neighboring countries such as India, Pakistan, Thailand, Malaysia and all over the globe. Convenience plays a key part in customer awareness. When customers can have a single avenue for all their financial solutions and the banks inform the customers about the best suitable product for them, it will establish a long financial relationship between the banks the customer. The banks become a ‘one stop shop’ for all the customer’s financial needs. Besides, customer loyalty and retention, Bancassurance is a great business venture for banks. They are able to generate additional revenue in a cost effective manner from their existing resources. Insurance carriers often help train bank staff with incentive plans and specialized training. Banks can cross sell products without increasing much of their operating costs and achieve improved profitability and non-funded income. This venture offers a diversified customer portfolio and increased customer lifetime value which is a very important metric for the banks. The good news is that factoring in all the beneficial effects of Bancassurance, Guardian Life Insurance, the most innovative company in the industry strongly believes that implementation of this kind of venture will not only add further value to their own company but also will pave the path of financial inclusion throughout Bangladesh.
The mutual relationship between the insurer and customer is very vital to achieve customer awareness for insurance companies. The insurance carriers offer financial protection and security to the customer’s family providing adequate financial solutions. The banks have a magnanimous distribution network which allows for higher market penetration, this is the foremost benefit insurers gain out of this alliance. Which in turn leads to a higher premium turnover. This also allows the banks and insurers to have great customer engagements and an enormous knowledge of the market demand, therefore increases the scope for innovation to offer relevant products. With reduced operational costs, higher efficiency in processing sales and claims, the insurers are able to establish customer trust as well as spread awareness about insurance.
Bancassurance has globally proven to be a great medium to spread awareness about insurance. This awareness benefits customers, banks and insurance carriers alike. The customers receive quality post-sale services, the banks and insurance companies are better able to understand the needs of the customers and generate income, all the while achieving a long-lasting business relationship.
The good news is that factoring in all the beneficial effects of Bancassurance, Guardian Life Insurance, the most innovative company in the industry strongly believes that implementation of this kind of venture will not only add further value to their own company but also will pave the path of financial inclusion throughout Bangladesh.
THE DIGITAL JOURNEY: GLIL IS FOSTERING FINANCIAL INCLUSION FURTHER BY BEING THE PIONEER OF DIGITAL LIFE INSURANCE
Over the next decade, digitalization will play a pivotal role in reducing poverty and improving financial inclusion. Digitization connects people, processes, and things intelligently which allow business entities to access more data. Greater data allows for more intelligent decisions, and so more comprehensive benefits can be derived from the digital revolution. More importantly, it makes financial services more accessible and transparent. Digitalization is the key to accelerating the impact of financial inclusion.
The idea of Digital Bangladesh has transformed the socio-economic scenario of our country. Currently, we have the second-largest pool of online workers in the world and income from ICT exports are gradually on the rise. It has also transmuted the lives of the impoverished population by allowing them to take part in economic activities. The digital platform has been playing a significant role in improving financial inclusion in Bangladesh. Multiple businesses entities across the country are continually innovating to bring more people under the umbrella of financial inclusion. Guardian Life Insurance Limited (GLIL) is considered to be the most innovative, progressive and fastest-growing Life Insurance Company of Bangladesh and has been leading the change in providing access to the masses to take part in formal financial activities ushering a financially inclusive revolution. Through EasyLife and MyGuardian, GLIL is set to transform millions of lives with the blessing of life insurance.
MyGuardian is a digital service platform which is designed to enhance the customer experience of current and future clients of GLIL. It includes both MyGuardian self-care app and MyGuardian Web Portal, each of them is specifically designed to provide an extensive client experience. MyGuardian App is a one-stop destination that allows clients to make more informed decisions about their preferred policy. It has detailed product information on the retail product portfolio of GLIL. It enables them (customers) to choose their preferred product by evaluating their options through the premium calculator. Remarkably, MyGuardian allows clients the option to pay premiums instantly via debit/credit cards and mobile banking. Currently, the app is being used by 5000+ users.
Moreover, it is possible to make instant claims for swift processing; a procedure that otherwise can take weeks through traditional methods. The same benefits can also be availed from MyGuardian Web Portal. The MyGuardian Digital Platform has the potential to be a game-changer in financial inclusion by making life insurance services more accessible to millions of Bangladeshis. GLIL is pioneering financial inclusion by digitalizing life insurance for millions.
EasyLife is primarily a Digital Sales Channel activated via app and web. It is intended to make insurance more accessible to consumers. A significant number of people in our country are now connected through the internet; Easy Life allows them to purchase insurance policies through both app & web.
One can conduct all the activities entirely online for buying an insurance policy and also pay the premium for being under coverage instantly. The very distinctive propositions of EasyLife are accessibility and availability. Its services are available on-demand regardless of the time. Without any intermediaries, one can buy life insurance instantly without the hustle of medical test and filling-up a form. Additionally, information gets dilated through the traditional method of securing clients through agents. It paves the way for illegal and unethical practices. The conventional approach resulted in the spread of misinformation and confusion, which still haunts the sector. Through EasyLife, the entire process has become transparent. Clients now have all the detailed information about every scheme available; it allows them to assess and determine the plan most suitable for them. EasyLife aims to educate the market about the aggregate benefits of insurance and ultimately encouraging them to buy insurance.
To provide a genuinely world-class digital life insurance experience along with monthly savings, GLIL carried out extensive desk research and benchmarking study with products of other countries with the homogeneous populace which resulted in the following products:
1) EasyLife – Simple Term (No premium refund option)
2) EasyLife Plus – Premium Refund Option
3) MSP – Monthly Savings Plan
4) MSP Ladies – Monthly Savings Plan with CI (Critical Illness)
With more than 2.5 Lac downloads since inception, EasyLife currently has more than 1 Lac monthly users. Moreover, EasyLife offers a digital loyalty program for its users that includes tremendous digital offers & discounts at lifestyle brands and prominent hospitals. Currently, over 20,000 digital loyalty program users of EasyLife are enjoying exciting discounts at more than 30 hospitals across the country.
GLIL has done an incredible job in creating a user-friendly and intuitive app which is compatible with the average financial literacy of Bangladesh.