Page 28 - November 2020

CONCEPT AND ANALYSIS
OF DEMAND AND SUPPLY SIDE
PROSPECTS OF INSURTECH
The first episode of the webinar
series shed light on “Concept &
Analysis of Demand and Supply Mosharraf Hossain, Chairman,
Side Prospects of InsurTech in
Bangladesh”. Regulatory Authority (IDRA) was
The Keynote of the session was
presented by Md Masud Rana, Joint
Director, Policy and International
The keynote presenter,
Masud Rana, started
the session by
explicating on
insurtech and its
implications on the
Bangladesh economy.
MD MASUD RANA
Joint Director
Policy and International Wing intelligence to make better
Bangladesh Financial Intelligence
Unit
26
Wing, Bangladesh Financial more panelists: Md. Mezbaul
Intelligence Unit, while Dr. M Haque, General Manager, Payment
System Department, Bangladesh
Insurance Development & Bank, and Farzanah Chowdhury
ACII (UK), Chartered Insurer, MD &
present as the Chief Guest of the CEO, Green Delta Insurance
panel. Company Ltd.
Along with them, there were two
Insuretech is the technology that decision-making and business
lies behind the creation, planning.
distribution and administration of
insurance business. It includes COLLABORATION FOR
things like smartphone apps, EFFICIENCY
consumer wearables claims Therefore, it's probably no
processing tools online policy
handling and automated surprise to learn that insurance
firms are backing insurer tech
processing. These technologies startups working together for a
help insurance providers collect more efficient insurance platform.
and analyze customer data so For example, a firm has created
they can target the right automatic digital insurance
customers at the right price and agents chat BOTS but use
encourage them to behave in a personalized user data to tailor
less risky way. It helps to cut the conversations with customers
cost of claims. other startups that have built
apps that offer insurance on for
BUSINESS ANALYTICS example an hourly basis ideal if a
Of course insurers always analyze customer wants to borrow a
information about policyholders friend's car for the afternoon.
but in this era of big data they're Also there's blockchain which
now looking to tap new sources may be useful in the battle
of information such as social against theft and insurance fraud,
media use advanced technology it's basically a peer-to-peer public
to process all this data use distributed ledger, a decentralized
machine learning and artificial record of information that is open
to multiple operators, it allows
predictions and apply this the creation of a tamper-proof
knowledge to improve database. Insurtech can
revolutionize the insurance sector
by incorporating the latest
technologies that will enhance
transparency, accountability and
competence.
Can you please comment
on the scalability and
implementation of
Insurtech in Bangladesh?
Scalability depends on the pace of
digitalization and the adoption of
the tools to personalize
services, and the demand entirely
depends on customers.
Concurrently, customer trust
depends on transparency and
competency of service provided by
the companies.
Therefore, the first condition on
the demand side is that you
deliver products according to
individual customer needs. It can
be achieved by detailed market
analysis and transparent claim
handling. On the supply side, the
sector needs to operate under
legally binding regulations
completely. Also, the introducers
of Insurtech must be nurtured
under favourable circumstances.
It can be done through an
incubation facility under IDRA. It
will help them to assimilate their
innovations by allowing them to
test their prototype.
awaiting publication. The
statistics mentioned in this
session will help formulate a
robust growth strategy for our
insurance sector.
Q & A: Recently, the
authorities took a move
that police cannot file cases
against third party
insurance companies. As a
regulator, how does IDRA
evaluate this decision?
It is a critical contemporary issue
DR. M MOSHARRAF which has been a significant
talking point in the industry. The
HOSSAIN core problem lies in the
Chairman misinterpretation and misuse of
Insurance Development & an article of the insurance law by
Regulatory Authority (IDRA) the transport owners. The
The entire idea of insurtech is Honourable Prime Minister
incredibly thought-provoking. We directed the authorities to end
now live in a world where any third party insurance as it fails to
financial activity without provide the expected service;
digitalization would be analogous rather, its existence is abused to
to crossing the road while fulfil compliance requirements.
keeping your eyes closed. However, we also have to address
Digitalization has become an the risks passengers are exposed
essential part of modern life, it to due to the lack of insurance.
has become one of the basic Therefore, the stakeholders of the
needs of human life. industry have to come to a
I do not completely agree with the solution for the more significant
notion that the insurtech sector is good for the people.
There are also a couple of issues
"unexplored". Rather, there have that need to be addressed. The
been bits and pieces of
technology-driven operations in driver and helper should also be
the insurance sector for the past covered compulsorily. We are in
discussion to cover road
few years. It is imperative to bring passengers just like other modes
the operations under formal
of transportation (air, railway,
structure and regulation to ensure water) with the respected
accountability. From my authorities. It is imperative to
experience, the insurtech service
ensure the safety of all the
providers are providing sets of passengers and staff, and
solutions. One for reporting to the
therefore, it should be included
regulators and tax department and under comprehensive insurance.
the other for authentic evaluation.
Such malpractices must be It is a pressing issue and
eradicated from the industry to hopefully will be resolved at the
ensure credibility. It can be earliest.
achieved by facilitating licensed
insurtech operations through a As Insurtech is in its initial
robust legal framework and stages in Bangladesh, what
accountability. kind of guidance can the
I strongly believe, our panel insurance companies
member, Masud Rana is very expect from IDRA
seasoned in looking after the regarding its
MLCFT issues at the end of the
Central Bank. He has also written implementation?
a book on the topic, another Digitalization is pivotal to the
success of the insurance industry.
IDRA has undertaken a 6 billion
USD project in the sector, of
which 65% of the resources are
allocated for digitalisation of the
industry. It is one of the largest
projects in progress under the
finance ministry. The amount of
resources allocated in
digitalization underscores its
importance. The project is
focused around four state-owned
organizations which will facilitate
the digitalization of the key
regulators. It will, in turn, ensure
greater efficiency and enable good
governance in the sector. The
process will ensure greater
penetration and transform
policyholders into advocates. The
industry requires time to reap the
benefits, but we are certainly
moving in that direction.
Md Mezbaul Haque
General Manager
Payment System Department
Bangladesh Bank
Bill Gates once stated, "Banking
is necessary for our lives but
banks are not", it was a reflection
of the shifting dynamics of the
global banking system. In the era
of the fourth industrial
revolution, growth will be driven
by technology. Millennials and
the generations following them
will not likely visit any financial accommodates every payment The government of Bangladesh has financial services. How can
method of the insurance industry.
commenced two amazing projects to
institutions in person. They are
we improve the financial
catalyze digital adoption among the
tech-savvy and seek every
However, it is imperative to make
solution on their cell phone. the stakeholders aware of the youth. A blockchain competition literacy among the masses
provided it might be pivotal
features that exist in the system
where I was one of the judges, called
Stakeholders in the financial
industry have to factor in the which we are eager to elaborate upon university students to find out to the adoption of more
changing demand due to on upon inquiry. tech solutions and implementation intricate services?
technological advancement. You of insurance technology was a big Despite the challenges, I bel
have to deliver the services to Insuretech is still in its part of it. It was followed by another prospects of our financi
them through their smart devices initial phases in competition involving university very bright. We have a growing
and that is only possible through startups. youth population where more than
incorporating technology in your Bangladesh, what kind of Concurrently, there have been a lot 65% of the country's popula
services. Failure to achieve capacity building is of collaborations between insurance under twenty-three years. T
technological integration will required to ensure robust and tech companies. Zhong An is decade has seen a massive
growth of the sector? How adaptation of mobile phones
prove fatal for the industry, it can would you evaluate its China's first property insurance amongst all ages. More than 86
render the sector obsolete. Fintech prospects in Bangladesh? FARZANAH company that sells all its products adult men 50% of adult wome
or Insurtech has posed a Fintech and Insurtech are online along with handling claims. mobile phones. The internet
challenge to the industry, it experiencing immense growth in CHOWDHURY ACII (UK) China's Internet service and penetration is increasing, which
cannot evolve to adopt the Bangladesh, and its implications Chartered Insurer insurance titans co-launched the stands at 58%. Technology has
transformation, the industry will are unlimited. We are witnessing MD and CEO country's first online insurance enabled people to adopt digita
inevitably fade away due to the a new concept being introduced Green Delta Insurance Company Ltd company indicating that the financial services irrespective o
lack of competitive advantage. every other day. booming Internet-based financial their educational background.
The regulators have to find a Data analysis and risk Insurtech is not limited to digital services market is further low-income households in our
balance between customer assessment are vital parts of the insurance or making a product expanding. They have 206 million country use MFS services to se
protection and regulation risk. insurance business. Technologies available in the digital space. Its customers and 1.6 billion policies in money to their families.
Similarly, market operators will such big data, IoT and AI, are implications go far beyond the place. There are numerous success International development
face the challenge of absorbing being incorporated in the general premise, insurtech allows us stories of insurtech across the world organizations are fundin
this technology. They can either business at a rapid pace. to consider the needs of the and Bangladesh governments companies to support Micro, Smal
partner with insurtech companies While working with fintech, individual customer. With the help of success in digitizing the country will and Medium Enterprises
or develop their technology, either Bangladesh Bank has noticed Big Data, IoT and AI, numerous play a big role in implementing operations. Ensuring financial
way, it is an inevitable that the market gets exposed to insurtech solutions will revolutionize insurtech in Bangladesh. Our literacy is a fundamental SDG g
progression of the sector. innovations every single day. The the industry. I completely agree with start-up scene has seen a rapid and MFS services are playing
boom and insurance companies can
Q & A: Insurance policies innovations have to be evaluated, our chief guest, Dr Mosharrof incorporate technology in their pivotal role in improving finan
Hossain, that insurtech is slowly
incorporated and regulated
are subjected to advance through a proper mechanism. being implemented in Bangladesh. operations through joint literacy in developing countries.
Ensuring financial literacy is no
payment from the Therefore, it is imperative to have Speaking of demand-based collaborations. However, the exclusively the government's
insurance companies have to
policyholder. Can our such infrastructure in place. insurance, there are a lot of undertake a multidimensional responsibility; it also depends o
insurance companies and
examples around the world which
Bangladesh Bank has recently
payment ecosystems work established Regulation of Fintech can have considerable impacts on approach incorporating every individual perseverance. I believ
together to make the Facilities Office under the our lives. In Australia, people have stakeholder in the digitizing process. within five years, the
access to on-demand mobile-only The proliferation of insurtech can be financial sector is going
process more efficient? payment system department. property insurance. enhanced by providing government experience significant growth
Regulators play a crucial role in
How can the Central Bank As a CEO, I have suggested incentives for the digital Bangladesh is one of the
properly guide its evaluating the compatibility of increasing the range of products transformation which will, in turn, fastest-growing economies i
any innovation in our financial
implementation? from yearly contracts to a much play a pivotal role in ensuring better world, and the implement
Our payment ecosystem has system. Innovation is essential, shorter period based model. It is very services including agriculture digital Bangladesh has made
but it has to be based on
everything possible.
experienced massive changes over customer needs. Bangladesh much possible to have an insurance insurance. Lack of awareness among
the last decade. We are now Bank has a committee of structure where farmers can make the general population has been the How crucial is it to establ
operating four electronic payment regulators across the financial claims based on weather and biggest impediment to the growth of trust between the customers
systems simultaneously for sector which facilitates satellite forecasts. the insurance industry in
wholesale and retail payments. cooperation and coordination Becoming a tech-savvy nation s key Bangladesh. Digitalization will play and companies for the
They cover all kinds of payment across different financial to ensuring a better quality of digital a pivotal role in enhancing success of insurtech? Please
methods, including real-time and institutions, and it will continue services. The first-ever digital insurance penetration in our tell us something about the
preferred. We also have a to provide all the necessary insurance platform was unveiled by country. logistical preparedness of the
real-time gross settlement system
which enables instant settlements assistance to all the stakeholders Green Delta Life Insurance Company Q & A: Financial literacy GDIC team for enabling
of large wholesale payments. according to their requirements. Limited, we take great pride in that. among our general InsurTech in Bangladesh.
Therefore, our payment However, becoming tech-savvy is population has impeded the Trust is crucial for the success
ecosystem is quite robust and subjected to a significant amount of insurtech or the insurance indust
investments. proliferation of digital in general. Interestingly, insurt