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We are-
Intake: 12th
Section: 03
Department: BBA
Name ID Signature
Tamjida Akhter Choyti 138
Ryhanul Islam khan 139
Anjuara Akhter Sonia 125
Fakrul Islam 151
“Problem and prospect of insurance
business in Bangladesh and ways of
overcoming the problem.”
History Of Insurance
History of insurance refers to the development of a modern laws and market in
insurance against risks. In some sense we can say that insurance appears simultaneously
with the appearance of human society. We know of two types of economies in human
societies: money economies (with markets, money, financial instruments and so on) and
non-money or natural economies (without money, markets, financial instruments and so
on). The second type is a more ancient form than the first. In such an economy and
community, we can see insurance in the form of people helping each other. For example,
if a house burns down, the members of the community help build a new one. Should the
same thing happen to one's neighbour, the other neighbours must help. Otherwise,
neighbours will not receive help in the future.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other
kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools
backed by pledges of landed estates. These new insurance contracts allowed insurance to
be separated from investment, a separation of roles that first proved useful in marine
insurance. Insurance became far more sophisticated in post-Renaissance Europe, and
specialized varieties developed.
Insurance as we know it today can be traced to the Great Fire of London, which in
1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened
an office to insure buildings. In 1680, he established England's first fire insurance
company, "The Fire Office," to insure brick and frame homes.
What is Insurance
Insurance is a contract between two parties whereby one party agrees to undertake
the risk of another in exchange for consideration known as premium and promises to pay
a fixed sum of money to the other party on happening of an uncertain event (death) or
after the expiry of a certain period in case of life insurance or to indemnify the other party
on happening of an uncertain event in case of general insurance.
The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose
risk is covered is known as the 'insured' or 'assured'..
Insurance in Bangladesh
Insurance is not a new business in Bangladesh. Almost a century back, during
British rule in India, some insurance companies started transacting business, both life and
general, in Bengal. Insurance business gained momentum in East Pakistan during 1947-
1971, when 49 insurance companies transacted both life and general insurance schemes.
These companies were of various origins British, Australian, Indian, West Pakistani and
local. Ten insurance companies had their head offices in East Pakistan, 27 in West
Pakistan, and the rest elsewhere in the world. These were mostly limited liability
companies. Some of these companies were specialised in dealing in a particular class of
business, while others were composite companies that dealt in more than one class of
business.
(2) After necessary scrutiny the Chief Controller shall forward the application with his
recommendation to the Ministry of Commerce.
(3) After further scrutiny, the Ministry of Commerce shall submit its views to the Cabinet
Committee constituted for this purpose.
(4) The decision of the Committee, if affirmative, should be sent back to the Ministry of
Commerce which in turn should send it back to the Chief Controller of Insurance for
communicating the same to the sponsors.
(5) The sponsors would then be required to apply in a prescribed form to the Registrar of
Joint Stock Companies to get registration as a public liability company under the
Companies Act. Memorandum and Articles of Association duly approved by the
Controller of Insurance would have to be submitted with the application.
(6) Once the registration process was completed the sponsors would have to obtain
permission of the securities and exchange commission to issue share capital.
(8) After all the above requirements were fulfilled the license to commence business
under the Insurance Act 1938 is to be obtained from the Chief Controller of Insurance.
Application can only be made subject to government announcements in this regard.
Problem and prospect of insurance business in
Bangladesh
3. Lower Rate Of Savings: In our country the average income of our people is very
low. Maximum people are live under poverty line. In 2004-2005 our internal
saving was only 20.16% of total GDP. Life insurance and other insurance are
mostly dependable on the saving of the people. So it creates the Problems.
5. Not Knowing What Customers Expect: Based on interviews, the authors found
that executives’ perceptions of superior quality service are largely congruent with
customers’ expectations. Customers’ expectations versus management perceptions
are the result of the lack of a marketing research orientation, inadequate upward
communication and too many layers of Management.
In our country the problems that exist in insurance business can not be overcome over a
right .It needs long term planning. Besides making the people aware the insurance
businessman should come forward with govt. to make this business famous. Coming
from the existing problems following steps should be taken to make this business
famous.
1. Spread of insurance education: To make the insurance business people should be
made aware about the helpless & necessity of insurance. For this purpose effective
steps must be taken to speared of insurance education.
2. 2. Publicity & increase of awareness: Mass publicity activities are very essential to
overcome from unwillingness wrong idea, doubt & unbelief of the people this
country. The people media can provide an effective help regarding country
interest.
3. Increase of training facilities: To continue the insurance business effective
standard training facilities must be arranged for the manager & workers who are
employed in this business.
4. Formulation of effective Principles: Long term formulation of effective principles
is compulsory to continue the insurance business successfully.
5. Uphold the interest of policy holder: Success of this type of business is depended
on the trust of insured persons. To gain the trust insurance companies should come
forward to compensate the real injured as soon as possible.
6. Importance to the economic development: Insurance business is depend on the
development of the different sector of economic .So insurance business can never
be developed by retaining the weak situation of the sectors including industry
commerce transportation.
7. Modernization of insurance Business: In this country for developing insurance
business modernization of insurance business and necessity new ideas must be
added in this sector.
Referances
1. Bangladesh Bureau of Statistics. 2004.
“Report of Financial Service Providers in
Bangladesh”.