Harun-ur-Rashid is always on the phone, talking, convincing people, and motivating them. At times one might catch a glimpse of a vaguely familiar middle-aged man sitting in front of Rashid's rather unadorned desk and being offered a ticket to financial security. And if you catch Rashid in action for half an hour, you will realise that an insurance agent by profession, Rashid is a storyteller by nature.
A motivational speaker in the spirit, the way Rashid begins his tale will remind you of a horror story.
"Have you ever given it a thought that if you die today, what will happen to your family? Your ailing parents? Or the fact that your children will have to beg others to make ends meet" – the classic insurance agent line was thrown at me.
It suddenly dawned upon me that insurance agents are the modern-day horror storytellers. I mean, forget 'Thakumar Jhuli' (Grandma's rucksack); insurance agents have far more chilling tales in their rucksacks, like road accidents, the future of your children, the expensive health check-ups and treatment, old age complications, etc.
Although a bit scared, I decided to play it cool. Putting on a brave face, I asked him how he got into this business.
For 15 years, Rashid worked as a banker, and in 2019, he finally left the position of Assistant Vice President of a bank. With a six-figure salary, office funded annual family tours, transportation and home loan facilities, he left everything and decided to follow another ghost: freedom and passion.
"For a six-figure salary, I toiled for 18 hours a day, and I was basically chained to my throne. So much so that I couldn't even enjoy the tours I was offered. I wanted to earn money, but I wanted freedom as well, where I could be creative, engage with people and which will be profitable for the clients as well," said Rashid.
In his words, the insurance industry was a 'perfect match!' Finally, in 2019, Rashid joined Sonali life insurance (SLI) company.
But why a life insurance company? To this, Rashid replied, "In my 15 years of banking career, one valuable thing that I have developed is a huge network. I don't have to be at my office every day in my current job. All I have to do is connect with people and inspire them [read 'scare them enough'] to buy an insurance policy or a deposit pension scheme (DPS)."
His income relies on commission
This is the reason most insurance agents are sweet-versed, patient and motivating. Because their income depends on the number of buyers, they can secure and get prescribed to their policies. Now their commissions are paid out of the premiums paid by policyholders. These may include base commissions as well as supplemental commissions or contingent commissions.
For every client Rashid manages to secure, he gets a commission. For example, the entire time I was at his desk, he was continuously trying to convince me to open a DPS that has a payout of Tk10 lakh in 10 years' time. Say, my monthly premium would be Tk 5,000, and if I had opened that account, Rashid would get a 10% commission every month, which is Tk 500 and that too for the next 10 years. That means by the time my DPS matures; he will have Tk 12,000 in his account.
As the insurance industry is digitised now, SLI has a mobile app also, and the policyholders can pay their premium using mobile banking; Rashid doesn't need to go to every client anymore.
Little Insurance penetration
Only 4% of people are insurance-covered in Bangladesh. According to Rashid and his fellow insurance agents, "This is because people do not trust the insurance companies yet."
They further explained his perspective, saying that there was a time when the insurance agent and brokers had to visit the policyholders every month to collect the premium. Policyholders didn't pay the premiums on time. And sometimes, the broker or agent used to collect the premium, but instead of depositing the money to the insurance company, they would keep it for themselves. This is the reason Bangladeshi people have lost trust in this process.
But now Insurance Development and Regulatory Authority (IDRA) has developed Insurance Act 2010, according to which the system has been digitised. According to Ala Ahmad, this is one of the reasons people are becoming interested in insurance again.
Ala Ahmed, chief excecutive officer of Metlife Bangladesh said, "Bangladesh's insurance penetration is very low. A lot of reasons contribute to this low penetration including low awareness and trust issues. But life insurers today are working collaboratively to tackle these issues. While there was a time when most policyholders relied on cash-based channels to pay their premiums, the situation is changing now. For example, today over 37% of MetLife premiums are collected via digital channels. This is because we have heavily invested in our digital servicing channels which now include all popular payment channels including online banking, MFS and direct payment through bank accounts (EFT Debit). Our agents also play an important role in encouraging customers to use this convenient digital channels."
"Singer Rhianna has her voice insured. Archers have their right thumb insured. Bangladesh is one of the few countries where insurance is considered a negative thing," Rashid lamented.
"Ninety six percent of our total population do not have insurance coverage. That's what I aim to change. I want to insure as many people as possible. And the more people I will convert, the more commission I will get," said Rashid. A win-win situation it seems.
In order to graduate to the status of a developing country, the Bangladesh government needs to ensure a better socio-financial condition. And that is why the government needs to bring people under insurance coverage. This is the reason the insurance industry is getting more attention, and agents like Rashid are dreaming of a profession that is flexible.
According to the Bangladesh Bank website, the insurance sector in Bangladesh emerged after independence with two nationalised and one foreign insurance company. In the mid-1980s, private sector insurance companies started to enter the industry, and it expanded.
Currently, 62 companies are operating under Insurance Act 2010. Out of which, 18 are life insurance companies, including a foreign and a state-owned one, and 44 are general insurance companies, including one state-owned company.
Insurance companies in Bangladesh provide services that include life insurance, general insurance, reinsurance, micro-insurance, and Takaful or Islami insurance.