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Table of Contents

1. Introduction.....2

1.1 The evolution of insurance companies in Bangladesh.....2

1.2 Present position of insurance business in Bangladesh........3

2. Area of Research..................4

4. Methodology of Research....4

5. Data Analysis............7

6. Industry Overview..........................................................................................................10

7. Company Overview....11

8. Comparison of scenario of Bangladeshi insurance company with a developed country.........11

10.To What Extent the Rights of the Customers In Insurance Companies have been compromised 15

11.Challenges.................................................................17

12. Recommendations................................................18

13. References..............................................................................19

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Introduction

Ethics is very important in building relationship with clients and dealing with them. Ethics in business

helps to establish an entities reliability and reputation with its clients. Ethical practices in all industries

including insurance industry which serves as a security to both personal and corporate organizations,

hence insurance is important to the society at large (Ndubuisi, 2008).

According to Lawrence cited by Tyagi (2007) insurance is a contract between two parties by which one

party in consideration of a price paid to him, adequate to the risk, becomes a security to the other by

ensuring that he does not suffer loss, damage or prejudice in the happening of uncertain events.Riegel and

Miller cited by Tyagi (2007) described insurance to be a social device whereby uncertain risk of

individuals may be combined in a group and therefore made more certain, by small periodic contributions

made by the individuals in this group, out of which those who suffer losses from the group may be

reimbursed.

The major objective of insurance business is to hedge out the possible risk of the future which may or

may not occur by selling security and protection. Although loss of life or injury incurred cannot be

measured in monetary terms, in other words we can say that no amount of money is enough to

compensate for the life of a loved one but it could be very frustrating when there is nothing to fall back on

when such unexpected event occurs. This is one of the reasons why insurance has been designed to

quantify such losses financially so as to ease the victim from the burden of loss. Therefore insurance

protects and reimburses a person or collective body from contingent losses through financial means in

return for regular payments of small amount called premium contributed to the insurance pool which is

managed by insurance companies.

Basically in Bangladesh, insurance business is divided into; life and non-life insurance (Agundu, 2001

and Bankole, 1997 cited by Tripathy and Pal, 2005). Insurance Decree No.2 of 1997 in Bangladesh

classified life insurance into two, group and individual life assurance. Non-life which can also be referred

to as general is classified into; fire, marine and aviation, burglary, theft, accident, motor vehicle, workmen

compensation, goods in transit, oil and gas, contractors and engineering risk. The Insurance Act of 2003

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recognizes four class of insurance business;life insurance business , general insurance business, composite

insurance business and re - insurance business.

1.1 The evolution of insurance companies in Bangladesh

Insurance Business of Bangladesh has a long history of evolution. Insurance business was first introduced

in Bangladesh by British Colonia government in 1910 but got more organized in the year 1960. This

business germinated in the year 1921 and was formally regulated in 1961. The sector underwent an

indigenization process in the 1970s and in the 1980s it was open to foreign competition. By virtue of

nationalization order, 5 Corporations were set up to manage the insurance industry of which four were

subsidiary corporation, two each for life and non life and an apex body, viz. Jatiya Bima corporation as a

controlling corporation. At a later stage, the above five corporations were replaced by two state owned

corporations namely, Sadharan Bima Corporation (SBC) for general business and Jiban Bima Corporation

(JBC) for nor life business under a restructuring plan made in 1973 in order to curtail excessive

administrative expenses of the aforementioned corporations. Sadharan Bima Corporation (SBC) emerged

on 14th May, 1973 under the Insurance Corporation Act (Act No. VI) of 1973 as the only state owned

industry organization to deal with all classes of non-life insurance & re-insurance business emanated in

Bangladesh. Again, in the process of denationalization, the Insurance Corporations Act was amended in

1984 to allow insurance companies to operate in the private sector subject to certain restrictions regarding

business operation and reinsurance. Subsequent to that, the Act was further amended for the relaxation of

the existing regulation to promote the private sector insurance companies. The Insurance Market in

Bangladesh now consists of two state- owned corporations along with forty three private sector generaland seventeen life insurance companies. Thus the insurance sector in Bangladesh has grown up

substantially and deepened remarkably with number of companies in both life and general segments. With

the expansion of size of the insurance market, the volume of assets of the industry has also increased

substantially.

1.2 Present position of insurance business in Bangladesh

The privatization policy adopted in the 1980s paved the way for a number of insurers to emerge in the

private sector. This resulted in a substantial growth of competition, improvement in services, and

introduction of newer types of business. In the year 2000, the government has given permission to 19

general insurance companies and 10 life insurance companies in the private sector. Insurers of the country

now conduct almost all types of general and life insurance, except crop insurance and export credit

guarantee insurance, which are available only with the Shadharan Bima Corporation. Numerous

institutions, associations and professional groups work to promote the development of insurance business

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in Bangladesh. Prominent among them is the Bangladesh Insurance Association (formed on 25 May

1988) having 30members. It aims at promoting, supporting and protecting the interests and welfare of the

member companies. Another example is Bangladesh insurance academy. Surveyors and insurance agents

occupy a prominent position in the insurance market of Bangladesh. The system of professional brokers

has not yet developed in Bangladesh. A total of 60 insurance companies are operating in Bangladesh tilldate. Of these companies, 57 are private, two state-owned and one is foreign. Insurance Directorate, under

the Ministry of Commerce, is the regulatory-body of the country's insurance sector. At present there are

44 general insurance companies running in Bangladesh. Many other private companies are about to

commence business.

Areas of Research

The purpose of our research paper was to explore attitudes and perceptions of the customers of

insurance companies towards the companies' business practices in Bangladesh. The expected outputs

included:

1. Identification of the main unethical issues of insurance companies in Bangladesh.

2. Identification of the strengths and Comparison of scenario of Bangladeshi insurance company

with a developed country

3. Identifying the extent to which the rights of the customers In insurance companies are

compromised.

4. The challenges and recommendations that are assessed in insurance companies.

Methodology of the Research

Primary Research

The primary research was being conducted through a survey using structured questionnaire. The

survey was carried out among 10 hand picked customers of insurance company in the area of

Kawran Bazar,Dhaka.As part of the primary research, we interviewed an employee of responsible

claim settlement.

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Questionnaires were administered, waited upon to be filled by respondents, collected as soon as

completed, on the same day.

r Secondary Research

Technically in the insurance business world the word assurance is used for life insurance. This is the class

of business that deals with human life. Under this class of business a life insurance contract is sealed

(Tyagi, 2007). According to him life insurance is a contract in which one party agrees to pay a given sum

on the happening of particular event contingent upon the duration of human life in consideration of the

payment of a sum by another. According to the insurance act of 2003, mainly three classes of business

are underwritten under life insurance business. These are; individual life insurance, group life insurance

and pension business and health insurance business.

According to Tyagi (2007) general insurance business means fire, marine or miscellaneous insurance

business which is carried out singly or in combination of these. He further explained that

miscellaneous insurance includes casualty like personal accident, motor insurance, theft and others.

In the case of general insurance business eight classes of business are specified by insurance act of

2003; fire insurance business, general accident insurance business, motor vehicle insurance business,

marine and aviation insurance business, oil and gas insurance business, engineering insurance

business, bond credit guarantee and suretyship insurance business and miscellaneous insurance

business.

Composite insurance business is the combination of life insurance business and non-life insurance

business.

Bjorn (1999) said risk is the foundation of insurance company, but even for a professional risk carrier,

risk business can become too risky and there may be need for an insurance company to transfer part

of his risk to other companies. When an insurer insures a part of his business with another company

this is referred to as re-insurance. When the insurer transfers his risk he is called a cedant and it is

said that he cedes a part of his business to the reinsurer. Claims payment from a reinsurer to a cedant

are called recoveries. In this case the recovery is used to offset whatever the insurer has paid to the

insured in respect of the claim.

Despite the importance of insurance and its validity the survival of this business in Bangladesh has

been a serious challenge.

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Market statistics revealed the poor performance of insurance business in Bangladesh, it was

discovered that Bangladesh insurers covers less than five percent of the nations insurable population

(Usman, 2008). It is possible for Bangladesh insurers to cover very small percentage of the nations

insurable population and still perform greatly if they are very strong. Bangladesh covers less than five

percent of the nations insurable population and contribute less than one percent to GDP. This isevidence that Bangladesh insurance companies are week.

Carlos and Echikas research in 2007 revealed that total Bangladesh insurance share of the world

market is 0.01% compare to South Africa with 0.86% (U.S Commercial Service, 2006). And

Bangladesh has the largest insurance market in the whole of Africa with a population of one hundred

and fifty million according to World Fact Book by CIA July 2009 est. (Central Intelligence Agency).

Obaremi reported in 2007 that weakness in Bangladesh Insurance sector meant that large percentage

of their business is underwritten in foreign countries. Many of the strong industries in the country are

more comfortable to have their risk carried by foreign insurers. Multinational companies and oil and

gas operators in Bangladesh insure their major risk overseas due to lack of confidence in Bangladesh

insurers as they default in claims settlement and other financial obligations to the public (Uranta,

2004 cited by Aduloju, Awoponle and Oke, 2008).

Some of the challenges faced by insurance business in Bangladesh according to Aghoghovbia (2005)

are; lack of skilled man power, difficulties in collection of premium, lack of innovation by insurers

and low level of information technology leverage in the industry. He went further by saying that the

emergence of universal banking which has expanded the scope of banking to include a good measure

of insurance services is a serious threat to the insurance business.

Presently there is high level of market indiscipline going on in the way insurance business is been

conducted in Bangladesh. In the quest of the operators in this market to get their own share from the

market, they engage in all sorts of unethical practices such as; rate cutting, hiding basic facts that

policy holders should know from them. They are more interested in the premium they will get from

the insured and not in carrying his risk which is supposed to be the primary objective (Ndubuisi,

2008). One of the legal principles that bind insurance business is that every insured should contribute

equitably to the insurance pool in proportion to the risk they are bringing into the pool. According to

him the implication of cutting rates and charging rates that are far below the commercial rates is that

the equitable standard is misplaced since clients are charged different rates for the same risk. Another

implication of this is that it leaves little reserve in the hand of underwriters after removing running

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cost of the policies and management expenses. And this in turn makes it very difficult for

underwriters to meet their major obligation which is claims settlement. Unfortunately this has led to

loss of greater percentage of the industrys revenue and as result poor performance of this business

due to under pricing of its products and services. A key means to build trust is through ethics, doing

things in the right way that it should be done. A whole lot of insurance companies in Bangladeshpreach ethics but they do not act it. The mindset of business is business carried by practitioners in

this sector has done lot of harm to their business. It has rendered them to be irresponsible and

personally insensitive. Players in this market are supposed to put themselves in the shoes of their

customers.

Data Analysis

Do you think Bangladeshi insurance companies could improve their service and fulfill their

commitments in the future.? if yes do you have any suggestion.

Yes

No

The figure shows how many times individuals Bangladeshi insurance companies could improve their

service and fulfill their commitments in the future.Vertical axis shows the percentage of the student and

Horizontal axis shows the different choices. Here, we can see that,70% of the respondents answered

insurance companies have a bright future where as 30% of the customers answered No

What is your view towards Bangladeshi insurance companies?

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Strongly like

Somewhat like

Neutral

Somewhat dislike

Strongly dislike

The figure shows which brands of fruit juices do you usually drink. 35% respondents chose they

somewhat like 14% chose somewhat dislike, 14% neutral 38% chose strongly dislike and none of the

customers chose strongly like. This depicts that customers have negative view towards bangladeshi

insurance companies.

11. Do you think proper training about ethical business practices could make the future of

Bangladeshi insurance company? If no why?

Yes

No

Reason

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The figure shows the view of customers if proper training about ethical business practices could

make the future of Bangladeshi insurance company , 65% chose yes, 25% chose No. No one gave any

reason. This shows that majority of the person think that there is room for improvement in insurance

companies.

3. Do you fully understand your policy coverage? If no, What do you think is the problem?

Yes

No

Reason

The bar chart shows the results when the customers were asked if they fully understand their insurance

policy. An overwhelming answered 95% No and only 5% answered Yes. One of the respondents depicted

that the claim officer hid certain facts during purchasing insurance.

The Interview Section

The interview was taken in Fareast Islami life insurance. The respondent pointed out that customers find

it difficult to submit the required documents needed to process their claims, having the mindset that once

the company is able to establish that they have made payment on the policy then their claim should be

settled automatically. This makes their claims to be delayed even when it is genuine. He mentioned that

the understanding of the customer on how insurance works is poor. He cited a case of one their clients that

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0

25

50

75

100

Yes No

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insured his car with them, his car had an accident but he was not the one that drove the car and provision

was not made for this under his policy. He said they tried all they could to let him understand but he was

not ready to listen to any explanation. He concluded by saying insureds claims are delayed because of

negligent on their own part and lack of understanding of insurance.

He also mentioned to us that challenges encountered in claims department are delay in complete

documentation by beneficiaries, fraudulent acts on the part of the customer and poor documentation

culture in Bangladesh. He said vital documents are handled carelessly generally in Bangladesh and when

the need arise to refer to these documents it becomes a problem. He said easy access of customers to

sensitive documents in Bangladesh makes insurers to always want to investigate every claim critically and

mostly this result in delay in settlement.

He concluded by saying that causes of some of these problems can be traced to underwriters unethical

practices due to competition for business. Every underwriter wants to have an award for writing the

highest premium and they give out rates that are not adequate to a risk. This is where the problem starts

and once the foundation is faulty from the beginning it becomes difficult to amend.

Fareast Life Insurance Limited ( Company Overview)

Fareast Life Insurance Limited a third generation Islami life insurance company of Bangladesh, was

incorporated in July, 2000 under the name of Farest Life Insurance Company Limited as a public limited

company under the Companies Act,1994.Fareast Islami Life started its journey in the year-2001. In the

year-2002, they converted into Islamic Company under the name of Prime Islami Life Insurance .The

company comply with Shariah law in their activities. Although they follow Shariah law in their activities

they are not

against the principle of profit maximization.

They claim that they are providing their staff with education and training and field forces. They are

involved in enhancing awareness amongst employees and the general people about Islamic insurance

through close cooperation with Insurance Association, Training Institutes and the mass media.

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The Product Mix

Fareast has introduced Multi Single, Multi-Pay Plan, Social Security Insurance, My Favourite Bima etc.

during 2008-2009. Besides new products, the company has existing eighteen products under different

category. PILIL has Hajj Bima, Assurance cum Pension and Medical Benefit Plan (without bonus), ThreePayments Endowment Assurance Plan, Multiple Benefits Life Assurance Plan (without profit), Child

Protection Assurance Plan (with profit), Couple Assurance Plan (with profit), Gift Assurance Plan (with

profit), Biennial Payment Assurance Plan (with profit) and under group insurance the company has group

term life insurance plan and group endowment assurance plan.

Claim Settlement Process

Fareast follows standardized procedure of settling claims covering a wide range of documentations. After

submitting papers, documents and reports, the claim files are submitted to the Claims Scrutiny

Committee. Claims Scrutiny Committee, after scrutinizing the papers, recommends the claims for

settlement or rejection. The Managing Director (MD) is empowered to approve claim amount upto Tk.

0.12 million whereas Claim Committee of Board can approve upto Tk.7 million and if claim amount

exceed the above limits then the file is placed before the Board for approval.

Industry Overview

Life insurance market is spread out all over the country covering the urban, sub-urban and rural areas ofBangladesh. The competitive environment in the insurance industry in Bangladesh is quite complex.

There is one nationalized insurance corporation having extensive branch networks, holding huge premium

deposit and enjoying certain prerogatives. There is one leading international insurance company branches

with focused business objectives, experiences and highly skilled human resources. Further, there are two

first generation private life insurance companies having comparative large branch networks, reasonable

access to technology and market.

Besides, the second-generation private insurance companies (started operations in 1996) make the

insurance business more competitive. The relative position, focus and competition are so diverse that it is

difficult for any new insurance company to make a favorable market entry and day-by-day the

competition is increasing.

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Comparison of scenario of Bangladeshi insurance company with a developed

country

The main thing that we have found in the comparison that is the developed countries of the world has

same problem as like Bangladesh has. We have compared the scenario of Bangladesh with the scenario of

our neighboring country India. We have found that problems of insurance industries are as like as

Bangladesh. The comparison is divided like:

Regulatory costs

Although society wants companies to create many and well-paying jobs, those same organizations also

want to limit compensation costs and raise productivity levels. On the other hand, customers want to

purchase goods and services at low prices: this creates a conflict with businesses that have a fundamental

objective of operating to maximize profits. A further conflict arises between societal demands to reduce

pollution costs, carbon emissions and businesses that want to minimize the cost that environmental

regulations may add to their operations.

Stakeholder and political pressures

Ethical issues in decision making have often created a dilemma for managers. He argues that managers

may be influenced by self-interest when they make decisions, and self-interest also governs whether the

decision will be effectively implemented. Cramton and Dees (2002) argue that in a competitive and

morally imperfect world, business people are confronted with serious ethical challenges. Sydeuzzaman

(2002) notes that in some cases banks have sanctioned loans more in consideration of political expediency

than viable financial fundamentals. This type of organizational culture adversely impacts

the ethical perception of the corporation as well as having implications for acceptability of certain

individual ethical behaviors. Badaracco (2003) notes that most companies are enmeshed in networks of

on-going relationships. Strategic alliances link organizations with their customers, suppliers and even

with their competitors. Many companies also have complicated dealings with media, government

regulators, local communities and various interest groups. These network relationships are also

networks of managerial responsibility. Taken together a companys business partners and stakeholders

have a wide range of legitimate claims but no company is likely to be able to satisfy all of them. At times,

a managers stakeholder responsibilities may conflict with their personal and organizational obligations.

Uddin (2009) concluded that in Bangladesh, some personnel at top management level, politicians, civil

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bureaucrats and other influential persons do not want banks to take action against such unethical practices

for fear of unforeseen or adverse consequences.

Poor Premium Collection

This is another challenge identified to be affecting this business in Bangladesh. The standard of no

premium no cover does not stand in Bangladesh (Aghoghovbia, 2005). He said the people that are

responsible for this are the intermediaries in this market (insurance brokers and insurance agents). These

intermediaries are the distributing channels that stand between the insureds and insurers. It has been

reported that insurance brokers and agents are fund of collecting premium from insureds and not remitting

to insurance companies. Aghoghobvia (2005) said over the years Bangladesh insurers kept writing

millions of premium but are able to collect only a small fraction of what they write this is because greater

percentage of businesses comes in through insurance agents and brokers. These people use premium for

other things and quickly run to remit when claim occur and if claim does not occur they refuse to remit

the premium.

Lack of Integrity and Trust

Omar (2005) asserted that there is lack of confidence and trust in the insurance companies in Bangladesh

by their consumers and the countrys population at large. Successful insurance companies evolve around

trust which is absent in Bangladesh. The major if not the only reason of insureds taking up an insurance

policy is to have their claims settled should in case of mishap. The image of insurance company can

simply be determined by their ability and attitudes to claims settlement. Albert cited by The Punch (2010)

noted that one of the reasons for low penetration of insurance business in the country is due to insurers

delay in settling claims. Insurance business is based on trust but fraud and fraught with fraud are

perpetrated by the various actors in this sector in Bangladesh (Ndubuisi, 2008).

Lack of Innovation

Good innovation keeps a business moving, it brings about transformation and it makes a business to be

very strong. Innovation can make a company to be highly competitive in the market. Insurance

practitioners in Bangladesh lack innovation, they keep leveraging on their old products, Aghoghobvia

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(2005), Tajudeen, Ayantunji and Dallah (2009) this is not a good feature of any business that is success

minded. This sector hardly comes up with new products that are appealing and able to meet the need of

the populace. When people buy an insurance product for five consecutive years without any claim on it

their appetite for the products tends to drop.

Corruption and bribery

Quddus (2001) comments that corruption introduces uncertainty as it

gives extraordinary power to a few and reduces confidence in the fairness of the outcome. This leads to

lower participation by ethical entrepreneurs and may result in markets that are highly inefficient, and

eventually to the demise of industries. This is a matter which should be of considerable concern to

regulators in developing countries such as Bangladesh. According to Hurther and Shah (2002) in

countries, where corruption and poor governance are matters of serious concern, the priorities in anti-

corruption efforts should be to establish the rule of law, to strengthen institutions of regulation and

accountability, and to encourage government interventions to focus on improving ethical practices.

Bribery is also closely related to unethical practices and has considerable potential to provide unfair

advantages and disadvantages. Some nations have introduced regulation aimed at making the practice

illegal. The issue of bribery is addressed in the Tibor-Scitovsky double test. In this theoretical approach

there is a provision: where compensation is not actually paid, it is sometimes possible for the losers to

bribe the gainers to abandon the proposed changed. In the double test criteria, tests are based on an

implicit value judgment and assume that actual compensation is not being paid. If compensation is paid,

then welfare can be attained in accordance with Pareto criteria.

These are the scenarios that we have found between Bangladesh and Indian insurance industries. The

main clue that is the behaviors towards the insurance companies of mass people. They have less trust in

the insurance. They prefer saving the money in the bank rather giving the premium for insurance.

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To What Extent the Rights of the Customers In Insurance Companies have

been compromised:

Insurance companies, along with the brokers and agents who sell home, auto and business insurance, are

committed to safeguarding your rights when you shop for insurance and when you submit a claim

following a loss. Your rights include the right to be informed fully, to be treated fairly, to timely complaint

resolution, and to privacy. These rights are grounded in the contract between you and your insurer and the

insurance laws of your province. With rights, however, come responsibilities including, for example, the

expectation that you will provide complete and accurate information to your insurer. Your policy outlines

other important responsibilities. Insurers and their distribution networks, and governments also have

important roles to play in ensuring that your rights are protected ( Importance of the Equitable Life

Archive, 2009).

The right of the customers in an insurance company are basically depend on what type of insurance the

client has taken from that insurance company. Generally, all contracts of insurance are contract of

indemnity except life and personal injury where no monetary compensation can truly indemnify death or

injury.

In the case of Life insurance, there are mainly two important rights of customers that insurance companies

should be given to their customers.

1.Protection policies designed to provide a benefit in the event of specified event, typically a

lump sum payment. A common form of this design is term insurance.

2.Investment policies where the main objective is to facilitate the growth of capital by regular or

single premiums. Common forms (in the US) are whole life, universal life, and variable life

policies.#

1

Besides this, there are some common rights of the customers of the insurance companies that all the

insurance companies should be focused in order to gain the trust of the customers which are given below:

Right to Be Informed

Customers should expect to access clear information about their policy, their coverage, and the claims

settlement process. They have the right to an easy-to-understand explanation of how insurance works and

how it will meet their needs. They also have a right to know how insurers calculate price based on

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relevant facts. They have the right to ask who is providing compensation to their broker or agent for the

sale of their insurance. Their broker or agent will provide information detailing for them how he or she is

paid, by whom, and in what ways. Insurance companies will disclose their compensation arrangements

with their distribution networks. Brokers and agents are committed to providing information relating to

ownership, financing, and other relevant facts.#

2

Responsibility to Ask Questions and Share Information

To safeguard customers right to purchase appropriate coverage at a competitive price, they should ask

questions about their policy so that they understand what it covers and what their obligations are under it.

They should access information through brochures and websites, as well as through one-on-one meetings

with their broker, agent, or company representative. They have the option to shop the marketplace for the

combination of coverage and service levels that best suits your insurance needs. To maintain customers

protection against loss, they must promptly inform their insurance company or broker or agent of any

change in their circumstances ( Importance of the Equitable Life Archive, 2009).

Right to Complaint Resolution

Insurance companies, their brokers and agents are committed to high standards of customer service. If

customers have a complaint about the service that they have received, they have a right to access their

companys complaint resolution process. Their insurer, agent or broker can provide them with information

about how they can ensure that their complaint is heard and promptly handled.

Responsibility to Resolve Disputes

Customers should always enter into the dispute resolution process in good faith, provide required

information in a timely manner, and remain open to recommendations made by independent observers as

part of that process.

Right to Professional Service

Customers have the right to deal with insurance professionals who exhibit a high ethical standard, which

includes acting with honesty, integrity, fairness and skill. Brokers and agents must exhibit extensive

knowledge of the product, its coverages and its limitations in order to best serve them.

Right to Privacy

It is important for the customers to disclose any and all information required by an insurer to provide the

insurance coverage that best suits them,they have the right to know that their information will be used for

the purpose set out in the privacy statement made available to them by their broker, agent or insurance

representative. This information will not be disclosed to anyone except as permitted by law.

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Disclosure Statement

All Insurance Companies compensate their producers (agents) solely by way of commission, in a way that

is competitive and consistent with the insurance industry. Basic commission rates range from 7% to 14%

depending on the type of insurance policy.

Conflict Of Interest

The principles promote consumer confidence in the insurance industry by outlining best practices for

managing these situations when they arise. The principles are:

The clients interests come first: Distributors must put the interests of policyholders and

purchasers ahead of their own;

Make clear any conflicts or potential conflicts of interest: Consumers must receive disclosure of

any actual or potential conflict of interest that is associated with a transaction or recommendation;

and

Ensure products are the right fit: Products recommended must meet the needs of the consumer.

Challenges faced by Bangladeshi Insurance Companies in Bangladesh.

Bangladesh insurers are the ones responsible for settling the claims of their insureds in the event of lossand the insurance personnel working in the claims departments recognize the fact that there is a moral

dilemma in every decisions related to the claims of their clients.

Personnel in claims administration in insurance companies understand that if the claims of insured are

mismanaged, it can be harmful to them as employees and also to the company as a whole. Therefore they

handle insureds claims in a professional way and also stick to the rules of the business.

From the study we identify that insurance companies in Bangladesh have a laid down procedure they

follow in processing their insureds claims however these procedures are very long and cumbersome.

Before an insureds claim can be processed certain requirements needs be fulfilled by insureds themselves

which are basically notifying his insurer of his loss, must be able to proof the loss and submit all the

necessary documents.

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Recommendations

Choose service providing employees very carefully; train them highly to make them knowledgeable

regarding the service standards as proper training and development of the employees in business ethics

would help the company to improve their image.

Encourage the existing customers to promote your services to the new customers and use newspaper as

the prime media for advertisement to show the cost benefit of insurance policy

Use technology to maximize the service quality and to reduce the fluctuation in service quality. Provide

service above standard as promised to the customers to reduce the service gaps

Do marketing research through field level marketing managers to prepare customer driven services and

make marketing decisions participatory

Revision of service and service delivery mechanism are required according to marketing research result

and a

References

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http://nkminsurance.com/consumer-rights/ The Actuarian Profession. 2009-06-25. Retrieved 2014-02-20

Aghoghobvia, (2005). Critical Success Factors for Profitable Management of Insurance Institutions.

Paper presented at the Bangladesh Insurers Association Workshop in Lagos.

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Bashorun, J.K (2003). Mergers and Acquisition: A Survival Strategy for Insurance Industry. The

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Ladipo, A.S. (2005), Look Beyond New Capital Base, The Punch Newspapers, November 15,pp.25

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