Delta Life Insurance Company Limited Bangladesh. Mosleh Uddin Ahmed FCA Deputy Managing Director Delta Life Insurance Company.

Transcription

1 Delta Life Insurance Company Limited Bangladesh Mosleh Uddin Ahmed FCA Deputy Managing Director Delta Life Insurance Company Bangladesh 1

2 Microfinance Program of Commercial Life Insurance Companies in Bangladesh 18 commercial life insurance companies 7 offers microfinance services - microinsurance (life) and microcredit loans to own policyholders Limited products Market penetration of insurance in the country is less than 1.0% 2

3 Delta Life Insurance Company Limited A private life insurance company incorporated in 1984 Two microinsurance products - Grameen Bima (1988) and Gono Bima (1993) and microcredit programs for policyholders Policies issued on group concept Door to door premium and loan collection Over 15,000 part-time time employees - 80% are women 3

4 Microinsurance Program of 2 largest Life Insurance Companies* Delta Life National Life 1 Premium Collection in US$ Million No. of Policies in force 571, ,121 3 Life Fund in US $ Million Number of Branches/Offices 1, * December

5 Microinsurance Program of Delta Life vs All 7 Insurance Companies 7 Insurance* Delta Life Companies 1 Premium Collection in US$ Million No. of Policies in force 715, ,119 3 Life Fund in US $ Million Number of Branches/Offices 2,300 1,615 * Approximate figures 5

6 Why was Delta Life successful? Vision, dedication and leadership of CEO Commitment of staff at all level Core competence within the company Uncomplicated and easy to understand products specially designed for the poor Simple procedures Large sales force and branch network 6

7 Delta Life s Constraints High ratio of lapsed policies High ratio of microcredit defaults High administrative costs Low return to policyholders High field level staff turnover Defalcation by field level staff Long processing time 7

8 Measures Taken by Management to Overcome Constraints High ratio of lapsed policies: Unethical sale of insurance policy reduced by staff training and strict disciplinary measures Staff assessment based on premium collection and persistency ratio High ratio of microcredit defaults: Waiting period between policy and loan Lending criteria based on premium collection and loan recovery rate 8

9 Measures Taken by Management to Overcome Constraints (continued) High cost and low return: GNB & GRB management merged Reduction in number of offices & staff to reduce overheads and increase profit margin Seeking strategic alliance with other MFIs High field level staff turnover: Staff retention through revised pay structure More full-time field staff and less part-time time 9

10 Measures Taken by Management to Overcome Constraints (continued) Defalcation by field staff: Deposit of premium by policyholders direct in office or market collection points encouraged Vigilance and monitoring through internal audit and MIS Stringent recruitment process Decentralization of records Computerization and MIS 10

11 Measures Taken by Management to Overcome Constraints (continued) Long processing time: Decentralization Computerisation Training 11

12 DELTA LIFE S COMMITMENT TO THE POOR Profit from microfinance program will be distributed back to the policyholders 12

13 Jorina Bibi - a Gono Bima Policyholder In 1998 when Jorina Bibi was widowed she was 29 years of age with 3 young children She had no savings and her only asset was a life insurance policy on her husband s life After her husband s death her in-laws threw her and the children out of the house With help of friends and a local NGO she moved into a home for destitute women 13

14 Jorina Bibi - a Gono Bima Policyholder With part of the money received from her husband s life insurance, Jorina set up a poultry business and built a place to live in She made sure that her children were able to continue their schooling Her daughter plans to go to an university and become a teacher Her sons wants to finish his college and join Jorina in her business 14

15 Jorina Jorina s monthly earning from the poultry business was Taka 3,000 ($ 60) initially. She ploughed back some of this money in the business for expansion. Today she earns Taka 5,000 ($ 100) per month. With this she supports herself and the three children and saves for the future. 15

16 Jorina Jorina now understands the benefits of life insurance. She is saving for Rupa s university education and Kanu s college education through two Gono Bima policies. She soon plans to take out another policy for her youngest son Sabir. 16

17 Rupa Rupa is now 16. She attends a high school in her village. During her free time and holidays she helps her mother in the poultry business. She is ambitious and plans to go an university and become a teacher in her village. The Gono Bima policy will finance her university education. 17

18 Kanu Kanu is now 14. He also goes to a local school and helps his mother during his free time. He wants to finish his college and join his mother s poultry business. The Gono Bima policy will finance his college education. 18

19 This could have been Jorina s fate This is Kulsum. Her husband died last year. She has no home, no job and no savings. She is a beggar on the streets of Dhaka and sleeps on the pavement with her son. She earns around Taka 50 daily. She and her son eat whatever food that they can beg or buy. Do they have a future? 19

20 This could have been Rupa s fate This is Sakina. She is 13. Her father died 6 months ago. Her mother brought her to Dhaka and abandoned her. She collects plastic bags from the garbage bins for a recycle merchant. She earns around Taka 15 daily and sleeps under a bus shelter nearby. Does she have a future? 20

21 This could have been Kanu s fate This is Mannan. He is 12. Both his parents died 9 months ago. Mannan ran away from his village where he lived with his uncle and ended up in Dhaka. He works at a building site and earns Taka 20 daily. He sleeps at the site. He will drift to another place after this building is complete. Does he have a future? 21

22 Kulsum, Sakina and Mannan Kulsum, Sakina and Mannan have a very bleak future. Kulsum and Sakina are at a risk of being lured by one of the many women and child trafficking rings with a promise of a job and end in prostitution. Mannan will probably drift around for a few years and out of desperation end up in street crimes. All three of them could have been saved by a microinsurance policy. 22