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Prospects of Insurance | Insurance Business Analysis

Keywords: insurance business bangladesh, problem insurance business

This is the law of nature that folks have to live on and play with hazards and to some extent insurance policy can free people from those frustrations. Whether or not this is true, folks of Bangladesh still don't prefer to insure themselves. You can feel that the people of Bangladesh are risk lover; on the other hand other may contradict by declaring that their low purchasing ability doesn't permit them to avail insurance policy. Here we will attempt to find out the problems of insurance business in Bangladesh and can try to suggest some steps for conquering these problems.

What is insurance?

Insurance in its basic form is defined as " A deal between two functions whereby one party called insurer undertakes in exchange for a set sum called monthly premiums, to pay the other party called insured a fixed amount of money on the taking place of a certain event. "

In simple conditions it is just a contract between the person who will buy Insurance and an Insurance provider who sold the Insurance policy. By getting into contract the Insurance company agrees to pay the Plan holder or his family members a predetermined sum of money in case of any unlucky event for a predetermined preset amount payable which is at normal term called INSURANCE COSTS.

Insurance is basically a protection against a financial reduction which can happen on the going on of an urgent event. Insurance firms collect monthly premiums to provide for this coverage. By paying a very small sum of money a person can safeguard himself and his family economically from an unfortunate event.

For Example in case a person buys a Life Insurance Policy by paying reduced to the Insurance provider, the family of covered with insurance person get a fixed compensation in case there is any unlucky event like death.

There are different sorts of Insurance Products available such as LIFE INSURANCE COVERAGE, Vehicle Insurance, Home Insurance, Travel Insurance, Health or Mediclaim Insurance etc.

Types of Insurance

Any risk that may be quantified probably has a type of insurance to protect it. Among different types of insurance are:

Automobile insurance, also called auto insurance, auto insurance and in the UK as engine insurance, is probably the most frequent form of insurance and could cover both legal responsibility claims against the driver and loss of or damage to the automobile itself. Over most of the United States purchasing a car insurance policy must legally operate an automobile on public streets. Recommendations for which policy restrictions should be used are specified in several books. In some jurisdictions, bodily injury compensation for automobile accident subjects has been altered to No Fault systems, which reduce or eliminate the capacity to sue for settlement but provide programmed eligibility for benefits.

Boiler insurance (also known as Boiler and Machinery insurance or Equipment Breakdown Insurance)

Casualty insurance insures against damages, not necessarily linked with any specific property.

Credit insurance pays off some or most of a loan when certain things eventually the debtor such as unemployment, impairment, or death.

Financial loss insurance shields individuals and companies against various financial dangers. For example, a company might purchase cover to protect it from loss of sales if the hearth in a factory averted it from carrying out its business for a while. Insurance might also cover failure of the creditor to pay money it owes to the covered by insurance. Fidelity bonds and surety bonds are one of them category.

Health insurance includes medical expenses incurred because of sickness or incidents.

Liability insurance covers legal claims against the insured. For instance, a homeowner's insurance coverage provides the insured with protection in the event of a claim helped bring by somebody who slips and comes on the property, and brings a lawsuit on her behalf injuries. Similarly, a health care provider may purchase responsibility insurance to cover any legal promises against him if his neglect (carelessness) in dealing with a patient triggered the patient personal injury and/or monetary damage. The protection proposed by a liability insurance policy is two-fold: a legal security in the event of a lawsuit commenced from the policyholder, plus indemnification (payment with respect to the covered by insurance) regarding a settlement or court verdict.

Life insurance provides a cash advantage to a decedent's family or other selected beneficiary, and could specifically provide for burial and other final expenses.

Annuities provide a stream of payments and tend to be labeled as insurance because they're issued by insurance firms and controlled as insurance. Annuities and pensions that pay a benefit for life are sometimes thought to be insurance from the possibility a retiree will outlive his / her financial resources. For the reason that sense, they will be the complement of life insurance.

Total permanent impairment insurance provides benefits when a person is permanently disabled and can't work in their profession, often taken as an adjunct alive insurance.

Locked Funds Insurance is just a little known hybrid insurance coverage jointly given by governments and bankers. It is used to protect general public cash from tamper by unauthorised functions. In special cases, a government may authorize its used in protecting semi-private cash which are liable to tamper. Terms of the type of insurance are usually very rigorous. As a result it is only used in acute cases where maximum security of money is necessary.

Marine Insurance protects losing or harm of goods at sea. Marine insurance typically compensates the owner of merchandise for losses sustained from hearth, shipwreck, etc. , but excludes losses that can be recovered from the carrier.

Nuclear occurrence insurance - injuries caused by an incident concerning radioactive materials is normally organized at the nationwide level. (For the United States, see Price-Anderson Nuclear Business Indemnity Action. )

Political risk insurance can be studied out by businesses with functions in countries in which there's a risk that revolution or other politics conditions will lead to a reduction.

Professional Indemnity Insurance is normally a mandatory requirement for professional professionals such as Architects, Solicitors, Doctors and Accountants to provide insurance cover against potential neglectfulness claims. Non accredited professionals may also purchase malpractice insurance, it is commonly called Mistakes and Omissions Insurance and includes a service provider for promises made against them that come up from the performance of given professional services. For example, a website designer can buy E&O insurance to repay them for several claims created by third get-togethers that come up out of negligent performance of site development services.

Property insurance provides cover against hazards to property, such as flames, robbery or weather destruction. This includes particular varieties of insurance such as flames insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

Terrorism insurance

Title insurance offers a guarantee that subject to real property is vested in the buyer and/or mortgagee, free and clear of liens or encumbrances. It is usually issued together with a search of the general public records done at the time of a real house transaction.

Travel insurance can be an insurance cover used by those who travel in another country, which addresses certain loss such as medical expenditures, lost of personal possessions, travel wait, personal liabilities. . etc.

Workers' settlement insurance replaces all or part of the worker's salary lost and accompanying medical charge incurred credited to a job-related personal injury.

A single coverage may cover dangers in one or more of these categories. For instance, car insurance would typically cover both property risk (covering the risk of robbery or harm to the car) and responsibility risk (covering legal claims from say, leading to an accident). A homeowner's insurance policy in america typically includes property insurance covering damage to the house and the owner's possessions, responsibility insurance covering certain legal says against the dog owner, and even a small amount of health insurance for medical bills of guests who are damaged on the owner's property.

Potential sources of risk that can provide rise to statements are known as "perils". Examples of perils might be fireplace, robbery, earthquake, hurricane and a great many other potential risks. An insurance policy will lay out in details which perils are included in the insurance plan and that are not.

History of Insurance business in Bangladesh:

Insurance is not really a home based business in Bangladesh. Almost a century back, during United kingdom rule in India, some insurance firms started out transacting business, both life and standard, in Bengal. Insurance business gained momentum in East Pakistan during 1947-1971, when 49 insurance firms transacted both life and general insurance schemes. These companies were of varied origins English, Australian, Indian, West Pakistani and local. Ten insurance companies had their head office buildings in East Pakistan, 27 in Western Pakistan, and the rest elsewhere on the planet. These were mainly limited liability companies. Some of these companies were specialised in interacting in a particular course of business, while others were composite companies that dealt in several school of business.

The administration of Bangladesh nationalised insurance industry in 1972 by the Bangladesh Insurance (Nationalisation) Order 1972. By virtue of the order, save and except postal life insurance coverage and foreign life insurance coverage companies, all 49 insurance companies and organisations transacting insurance business in the country were put in the public sector under five corporations. These businesses were: the Jatiya Bima Organization, Tista Bima Company, Karnafuli Bima Corporation, Rupsa Jiban Bima Organization, and Surma Jiban Bima Corporation. The Jatiya Bima Organization was an apex firm and then supervise and control the actions of the other insurance firms, which were in charge of underwriting. Tista and Karnafuli Bima Organizations were for general insurance and Rupsa and Surma for life insurance. The specialist life companies or the life part of a composite company became a member of the Rupsa and Surma organizations while specialist general insurance firms or the overall portion of a composite company became a member of the Tista and Karnafuli companies.

The basic idea behind the forming of four underwriting firms, two in each main branch of life and general, was to encourage competition even under a nationalised system. But the burden of administrative expenditures incurred in keeping two businesses in each entrance of life and general and an apex establishment at the top outweighed the features of limited competition. Consequently, on 14 May 1973, a restructuring was made under the Insurance Firms Act 1973. Following a Act, in place of five corporations the government developed two: the sadharan bima company for standard business, and jiban bima corporation forever business.

The postal life insurance coverage business and the life span insurance business by foreign companies were still permitted to continue as before. The truth is, however, only the american life insurance company. continued to use in the life sector for both home based business and servicing, while three other foreign life insurance sustained to operate limited to servicing their old policies released during Pakistan days and nights. Postal life looked after its business as before.

After 1973, standard insurance business became the only real responsibility of the Sadharan Bima Corporation. Life insurance business was completed by the Jiban Bima Company, the American Life insurance coverage Company, and the Postal Life Insurance Section until 1994, whenever a change was made in the structural arrangement to keep pace with the new financial style of liberalisation.

The Insurance Firms Act 1973 was amended in 1984 to permit insurance companies in the private sector to operate hand and hand with Sadharan Bima Company and Jiban Bima Firm. The Insurance Companies Amendment Act 1984 allowed floating of insurance companies, both life and basic, in the private sector subject to certain restrictions regarding business procedures and reinsurance. Beneath the new take action, all general insurance businesses emanating from the public sector were reserved for their state had Sadharan Bima Company, that could also underwrite insurance business emanating from the private sector. The Take action of 1984 managed to get a requirement for the private sector insurance companies to acquire 100% reinsurance cover from the Sadharan Bima Organization. This virtually switched Sadharan Bima Corporation into a reinsurance company, in addition to its common activities as direct insurance provider. Sadharan Bima Company itself possessed the to reinsure its surplus somewhere else beyond your country but only after exhausting the retention capacity of the local market. Such constraints aimed at avoiding outflow of foreign exchange in the form of reinsurance premium and creating a reinsurance market within Bangladesh.

The restriction regarding business location affected the hobbies of the private insurance companies in many ways. The constraints were considered not congenial to the development of private sector business in insurance. Two strong arguments were put forward to articulate thoughts: (a) Because the general population sector accounted for approximately 80% of the full total premium volume of the country, there is little premium kept for the insurance firms in the private sector to survive. In this framework, Sadharan Bima Firm shouldn't have been permitted to contend with the private sector insurance companies for the meagre top quality (20%) emanating from the private sector; (b) Being truly a rival in the insurance market, Sadharan Bima Organization was hardly suitable as a company to safeguard the passions of the private sector insurance companies and should not have retained the exclusive to reinsure policies of these companies. The arrangement was in reality, against the process of laissez faire.

Private sector insurance firms demanded withdrawal of the above mentioned restrictions so that they could (a) underwrite both open public and private sector insurance business in competition with the Sadharan Bima Corporation, and (b) impact reinsurance to the choice of reinsurers. The government modified the system through promulgation of the Insurance Companies (Amendment) Act 1990. The changes allowed private sector insurance firms to underwrite 50% of the insurance business emanating from the general public sector and also to place up to 50% of these reinsurance with any reinsurer of these choice, at home or overseas, keeping the rest of the for placement with the Sadharan Bima Firm.

According to the new guidelines the administrative centre and deposit requirements for development of an insurance company are the following:

Capital requirements: for life insurance company - Tk 75 million, which 40% will be subscribed by the sponsors; for mutual life insurance company - Tk 10 million; for basic insurance company - Tk 150 million, which 40% will be subscribed by the sponsors; and then for cooperative insurance culture - Tk 10 million for life and Tk 20 million for general.

Deposit requirements (in cash or in approved securities): For life insurance - Tk 4 million; for flame insurance - Tk 3 million; for sea insurance - Tk 3 million; for miscellaneous insurance - Tk 3 million; for mutual insurance provider - Tk 1. 4 million; and for cooperative insurance culture, in case there is life insurance coverage - Tk 1. 4 million, and in case there is basic insurance - Tk 1 million for every single class.

The government rules for formation of any insurance company are:

(1) The intending sponsors must first submit an application in approved form to the principle Controller of Insurance for prior permission.

(2) After necessary scrutiny the principle Controller shall forward the application form with his recommendation to the Ministry of Commerce.

(3) After further scrutiny, the Ministry of Business shall submit its views to the Cabinet Committee constituted for this function.

(4) Your choice of the Committee, if affirmative, should be repaid to the Ministry of Commerce which in turn should send it back to the Chief Controller of Insurance for interacting the same to the sponsors.

(5) The sponsors would then be required to apply in a recommended form to the Registrar of Joint Stock Companies to get subscription as a public responsibility company under the Companies Take action. Memorandum and Articles of Association duly approved by the Controller of Insurance would have to be published with the application form.

(6) After the enrollment process was completed the sponsors would have to obtain permission of the securities and exchange payment to concern share capital.

(7) Reinsurance plans would need to be made at this time.

(8) After all of the above requirements were fulfilled the licence to commence business under the Insurance Action 1938 is usually to be obtained from the principle Controller of Insurance. Software can only become subject to authorities announcements in this regard.

The control over insurance companies, including their functions relating to ventures, taxation, and reporting, are governed mainly by the Insurance Work 1938 and the Fund Acts.

The privatisation coverage used in the 1980s paved the way for several insurance providers to emerge in the private sector. This resulted in a substantial expansion of prime incomes, competition, improvement in services, and introduction of newer types of business in wider areas hitherto untapped. Prior to privatisation, the annual gross premium volume of the united states was roughly Tk 900 million on the whole insurance business and around Tk 800 million in life insurance coverage business. In 2000, high quality incomes rose to Tk 4, 000 million on the whole insurance business and Tk 5, 000 million in life insurance coverage business.

Up to 2000, the federal government has given authorization to 19 basic insurance firms and 10 life insurance coverage companies in the private sector. Insurers of the united states now conduct virtually all types of standard and life insurance, except crop insurance and export credit warranty insurance, which are available only with the Sadharan Bima Organization.

Numerous institutions, organizations and professional groupings work to promote the introduction of insurance business in Bangladesh. Visible among them will be the Bangladesh Insurance Relationship and bangladesh insurance academy. Bangladesh Insurance Connection was produced on 25 May 1988 under the Companies Act 1913. It really is documented with the Registrar of Joint Stock Companies and has 30 participants. It aims at promoting, supporting and protecting the passions and welfare of the member companies.

Surveyors and insurance agencies occupy a prominent position in the insurance market of Bangladesh. The surveyors are mainly responsible for surveying and examining general insurance loss and sometimes, for valuation of insurance properties, as the real estate agents work to procure both life and general insurance business against commission payment. The machine of professional agents hasn't yet developed in Bangladesh. However, it is just a common practice of the insurers to activate salaried development officers for promotion with their insurance business.

Problems of insurance business in bangladesh

The insurance business in Bangladesh is facing lots of problem atlanta divorce attorneys now and then. To describe the issues, we use service quality space model. Utilizing the model it will are more easer to understand the problms of insurance in Bangladesh.

Service Quality Distance Model

Managers in the service sector are under increasing pressure to show that their services are customer-focused and this constant performance improvement is being sent. Given the financial and source constraints under which service organizations must take care of it is vital that customer targets are properly understood and measured which, from the customers ' point of view, any gaps in service quality are identified. This information then helps a administrator in determining cost-effective ways of shutting service quality gaps and of prioritizing which gaps to concentrate on - a critical decision given scarce resources ( SERVQUAL and Style of Service Quality Spaces: A Framework for Determining and Prioritizing Critical Factors in Delivering Quality Services by Dr. Arash Shahin, Division of Management, University or college of Isfahan, Iran). Why is managing customer service different, as a marketing problem, from taking care of the standard components of the marketing mix (product, price, offers, and place) is the fact customer service is typically sent by front-line employees. Workers procedures, thus, have immediate marketing implications. Many suppliers take this under consideration by treating employees as "interior customers. " Corresponding to this philosophy, management must "sell" their internal customers on the company and its regulations to be able to generate front-line employees to provide the desired degrees of customer support. Standard personnel insurance policies that can assist in customer support and sell the "inside customers" include (a) employee verification and selection, (b) training, (c) setting suitable reporting human relationships, (d) goals and praise systems, (e) interior marketing communications, and (f) generally developing a "service" culture. The Distance Analysis Model moves a step beyond simply reexamining each one of the standard personnel regulations in light of the required customer support. The model provides specific requirements concerning workers and management regulations that complete the linkage between customer prospects and perceived service delivery. Furthermore, the model provides a checklist of where breaks in the chain can occur; employing this checklist provides a good audit of service quality (See: A Service Quality Audit:

Application of the Difference Evaluation Model by Paul R. Messinger, University of Alberta). There are seven major gaps in the service quality principle, that happen to be shown in Number-1. The model is an extension of Parasuraman et al. (1985). According to the following reason (ASI Quality Systems, 1992; Curry, 1999; Luk and Layton, 2002), the three important spaces, which are more associated with the external customers are Distance1, Gap5 and Distance6; since they have a primary romantic relationship with customers. Gaps 1 through 6 widen or close, so does Distance 7. The authors' conceptual style of service quality comes after:

"The main element to delivering high quality service is to constantly monitor customer perceptions of service quality, identify factors behind service quality shortfalls, and take appropriate action to improve the quality of service (close the service spaces). "

Distance 1. Not Knowing What Customers Expect:

Based on interviews, the writers found that professionals' perceptions of superior quality service are basically congruent with customers' anticipations. Customers' targets versus management perceptions will be the result of the lack of a marketing research orientation, insufficient upward

communication and too many layers of management.

Gap 2. THE INCORRECT Service-Quality Expectations:

Gap 2 comes up when there's a discrepancy between what professionals perceive that customers expect and the real expectations that they (the managers) set for service delivery. This distance might occur when management knows customers' goals but may well not be happy or in a position to put systems in place that meet or go over those expectations.

Distance 3. The Service-Performance Space:

Organizational plans and benchmarks for service levels may maintain place, but is front side line staff pursuing them? A very common space in the service industry, Gap 3 is the difference between organizational service specs and actual levels of service delivery. Service specs versus service delivery is the consequence of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, unacceptable supervisory control systems, insufficient identified control and insufficient teamwork.

Space 4. When Guarantees USUALLY DO NOT Match Delivery:

Customers perceive that organizations are providing low-quality service whenever a gap shows up between promised degrees of service and the service that is in fact delivered. This difference is created when advertising, personal selling or pr over-promise or misrepresent service levels. Service delivery versus external communication might occur as a result of insufficient horizontal communications and propensity to over-promise.

Difference5: The discrepancy between customer expectations and their perceptions of the service supplied:

as due to the affects exerted from the client part and the shortfalls (gaps) for the company. In cases like this, customer anticipations are influenced by the amount of personal needs, person to person recommendation and past service activities.

Gap6: The discrepancy between customer objectives and employees' perceptions:

As due to the dissimilarities in the knowledge of customer goals by front-line providers.

Distance7: The discrepancy between employee's perceptions and management perceptions:

As a result of the variations in the understanding of customer targets between managers and providers.

Figure1: Style of service quality spaces (Parasuraman et al. , 1985; Curry, 1999; Luk and Layton, 2002)

Other Problems

Service quality difference model will not provide all the problems of insurance business. There various other problems too. These problems are given below:

Lack of trustworthiness: Lack of trustworthiness is one of the the major problems of insurance business in Bangladesh. Extended process in getting payment after any event is the main reason of trustworthiness. Time killing behavior in payment after incidence is reducing the trust of the clients towards the insurance companies.

Low income of people: Low income and purchasing power doesn't permit the people of Bangladesh to move for insurance coverage. Practically we can easily relate all these factors. For example, in one hand the lower income of the people is creating barrier in buying insurance coverage, on the other side lack of trustworthiness makes this insurance preventing behavior more serious.

Unattractive offerings: Insurance companies are not providing appealing to offerings to their customers. All of the offerings are similar. You can find very less variation among the offerings of differnt insurance firms.

Lack of information about the insurance companies: The insurance firms are not providing their information (regarding company and insurance policy) properly or consistently which is another problem of the insurance firms.

Inefficiency in problem solving: Inefficiency in problem fixing is another issue of the insurace companies. If any customer comes to then to solve some problems, they do not solve those problems proficiently.

High service/control cost : Insurance companies charges high service/control cost from other customers.

Less convincing sales people: Some insurance firms appoint sales people at a very lower cost. These sales representatives aren't much convincing. They can not convince effectively to get insurance pollicy. This is another problem of insurance firms.

Lengthy process to get payment after happenings: Insurance companies have a lenthy process to get repayment after incidents. Sometimes they take one or two years to pay their customers. That is one of the major problems of insurance firms.

Steps to triumph over the problems of insurance business:

The demographic styles claim that as private insurance firms (both local and multinational) have proliferated in Dhaka city, better informed and much more affluent people have gravitated to these insurance firms for insurance services. These people/clients are likely to have better information about the grade of services provided by both public and private insurance companies and their inclination to choose private insurance firms implies, implicitly, that the quality of service is better at these private companies even though their (private insurance companies) service cost is slightly higher. In addition, many branch operation of private insurance firms help the visitors to make evaluation included in this and making an insurance decision in favor of those which are reliable. But between your private local and international insurance provider choice, clients are typically considering overseas private insurance companies because of its trustworthiness, experience in operation and large area coverage. Less amount of branches of the general public insurance firms may be another perfect reason of not being preferred by the neighborhood clients. By definition, it might be more real if the clients were willing towards the public insurance firms from trustworthiness point of view, but as statistics suggests and only choosing foreign private insurance companies, probably we have to be satisfied by saying that it's in many admiration guided by client's mindset to getting better and quick services. The motivation structure must play a role in ensuring the product quality services shipped by the public insurance companies. One solution is to tie up part of the settlement of insurance personnel in public areas companies to services rendered and feedback received from clients. This, of course, is a complex issue and has implications for pay level administration, since public lender staffs, as authorities servants, are paid corresponding to certain pay set ups. While beyond the range of this newspaper, authors feel that compensation flexibility is necessary to reward those who are dedicated to providing quality insurance services. If compensation adjustments can't be incorporated, benefits-including promotion, copy in more respected branches, review leave, performance extra and the like-could be tied to performance evaluation device. There has to be a formal procedure of analyzing the employees by the clients through some questionnaire type performance appraisal form. An indicator, objection or suggestion publication in the branch can be unveiled where in fact the clients may also complain or appreciate in regards to a specific employee. General public recognition and the transparency of the high formal may have an optimistic effect on that concern. A rating scale may be proven to rate the grade of services predicated on insurance company's facilities, past performance data, and client's assessments. The ranking factors and mechanisms would have to be developed on the basis of inputs from clients and the profession. It could also make a difference to determine, designate, and highly enforce the legal outcomes for tampering with consumer details and their assessments. This technique will lead to qualifying and rank every single insurance provider (Private and general public). We think the insurance coverage collection and profit margin should not be the only standard to position a specific insurance company. As the amount of insurance companies is growing, it is important to build up a national capability to periodically evaluate and publicly disseminate (As University Grants Commission do for the private colleges) the evaluations or rankings of all insurance companies so that every service provider's reputation is widely known. Armed with this information, clients can make more informed choices.

In addition, as an important dedication of insurance provider choice, companies must invest in building their reputation/consistency which will help to reduce the outflow of the clients to other businesses.

To enhance a good reputation of the insurance company, they can follow the strategies stated below:

Do a whole lot of personal offering of services to the clients and encourage existing customers in order to good about your services to the customers.

Carefully choose employees who interact with the customers to reduce Difference-3.

Train employees to work together well with the clients to minimize Gap-3.

Positive and societal marketing activities to develop and job specific company image to minimize Distance 1 and 5.

Design facilities to attain specific marketing or image objectives of the organization to minimize Difference-5 & 6.

Establish formal system for handling quality of insurance services to reduce Difference2 and 3.

Provide specific work to encourage customers to share others about your services.

From the political and social tendencies of people it can be said that demand for these services will be higher in forseeable future. Even being more with an insurance company is also dominated by many special services. Insurance companies, especially open public one must think about more value added services. In building new and better value added services the insurance agencies can follow the strategies described below:

Regularly acquire information about customer needs (Minimizing Distance-1)

Perform marketing activities based on understanding of customers (Minimizing Space1, 2 and 3)

Ensure that the firm's activities enhance client satisfaction (Minimizing Difference-4)

Do marketing survey to create customer oriented and customer focused services (Minimizing Gap-1 and 7)

When a person is dissatisfied, redo services to minimize Distance 1, 4 and 6.

Base prices on what it costs to your businesses and services (cost accounting system)

Base prices on what opponents charges (requires industry examination)

Base prices on what the marketplace and the customer is happy to pay

sales people aren't convincing rather bothersome to many people. We think following steps may help in improving the situation:

Carefully choose smart and presentable staff who will be getting together with the clients to minimize Difference-5 and 6.

Train employees to make sure they are knowledgeable about the services of the organization to socialize well with the customers to minimize Difference2, 3 and 5.

Communicative training must be provided to the sales representatives.

A quick spotlight is listed below regarding the ideas and advice we accumulated from the respondents at the time of review regarding their views operating improvement of both private and general public insurance companies:

Public insurance companies must raise the rate of repayment to encourage more accounts

Public insurance firms must pay attention to understand the issues of the clients. A short response time is expected from the public firms

It was observed that respondents have discovered malpractices in the finance institutions regarding insurance policy handling and other professional services. It had been suggested to do something to eliminate hustle in getting repayment after any occurrence.

Use a combination of cost and competition centered charging system as gradually competition structured costing will be popular in the industry credited to increment in the amount of competitors.

It will be better for the insurance firms to provide more customized services to the customers which in turn will allow them to follow demand based pricing (Minimizing Distance-1 & 7).

Use heavy educational advertisement to show how the service can be better employed. But as

the insurance company's advantage of service is long should practice more of reminder advertising campaign (to reduce Difference1 & 2).

Encourage the existing customers to market your services to the clients and use

newspaper as the perfect media for advert to show the price benefit of insurance coverage (Minimizing Space-5).

For the institutional insurance service provider, empower your customer by close

contact through sending mail and educated sales staff (Minimizing Space- 3 & 4).

Choose service providing employees very carefully; coach them highly to make them knowledgeable about the service specifications (Minimizing Difference-3 & 6).

Use technology to keep in touch with your customers even after sales.

Insurance companies must be concentrating on their physical infrastructure and huge syndication facilities (Minimizing Difference 3).

Use technology to increase the service quality also to reduce the fluctuation in service quality. Provide service above standard as promised to the clients to reduce the service gaps (Minimizing Distance 5 & 6).

Do marketing research through field level marketing professionals to prepare customer driven services and make marketing decisions participatory (Minimizing Distance 1, 2 & 7).

Revision of service and service delivery mechanism are required according to marketing research result and activities of the competition.

Prospects of insurance business in Bangladesh

Insurance industry, as said previously, at the ultimate level of its change. Government has considered several steps for revitalizing the sector to make it more lively and operationally audio. However, amendments and initiatives can't make an overnight change in the sector. As we realize the Team of Insurance is likely to be replaced by an unbiased Regulatory Authority yet the same will never be fruitful until the authority is equipped with technocrats at the policy level and enough human resources at the operation level to seize control over the sector. The new regulatory body should discover some mechanism to eradicate underhand commission to lessen the high procurement cost on the whole insurance business. Professionalism at every level of management is very important for overall development in the sector. For useful and prompt decision making, management should get sufficient delegation of power. The panel should only entail in strategic and policy aspects of the company without looking at the day to day procedure. All the insurance agencies should have a sensible HR plan that will appeal to the qualified people to choose the occupation as a 'profession' not really a mere 'job'. HR development program should be a part and parcel of regular business procedure for the augmentation of skills and development of professionalism. A good number of companies are still struggling because of their survival, thus huge cost of IT infrastructure is an additional burden for the coffee lover. However, consciousness should be built for effective use than it infrastructure in MIS that ultimately will bring positive results in future.

Last however, not the least; it isn't the responsibility of the regulatory body exclusively to make groundbreaking change, rather the respective plank, the management team and most importantly the covered by insurance should come forward to bring the sector to the global standard. The sooner it happens; the better is made for the stakeholders specifically and the country in general.

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