At Green Delta Insurance, our brand is strong, our distribution network is robust, our business is well-capitalized,our team is determined and our direction is clear. With these critical components of success in place,we are well-positioned to lead the transformation of the country’s insurance industry and be an active participant of its growth story.
At present, we are witnessing significant global turmoil largely related to the financial markets. The renowned American economist, Nouriel Roubini, mentioned that the world economy is a single-engine plane driven by the US. What are your thoughts on this
We feel that at the moment yes, the US is looking strong and relatively stable with good consumer confidence. Some of the other developed countries also appear to be on the same platform. On the other hand, the slowdown in China and Brazil, part of the famous BRIC economies, and some other emerging countries, is definitely having an impact on the global economic landscape. The climb- down of oil prices and hence the transfer of wealth from oil producers to oil importers is having a depressing impact on some major economies which are more oil- dependent, like Russia. What I would say in the case of Bangladesh is that it is a star performer, just like India, with the GDP growth rate higher than any other major economy in the world. I feel that the Government at the centre is also increasingly looking to liberalize the economy which is a good step and will open some great potential opportunities, going forward.
The risk factors panning out at the global level today
International conflict in terms of terrorism and geopolitical challenges are becoming much more acute in some of the developed countries today. Such examples typically corroborate what happened in Amsterdam and Paris recently. Besides, cyber crime, recent health scares and regulatory/ legislative changes are also some of the top risks that face the world today.
Specific trends that will drive growth of the insurance industry in Bangladesh
Despite having one of the highest population densities in the world, Bangladesh’s share of the global insurance industry is a mere 0.02% and per capita spending on insurance is a paltry USD 2.6. Conventionally, the growth of the insurance industry is linked with economic growth
and aligned with the GPD growth; the domestic general insurance industry has been averaging an annual growth rate of about 6%. Low awareness is one of the prime reasons why the industry has not been able to cover even a meaningful percentage of the population. For instance, labourers who go abroad for work are not insured and even some of the big establishments dotting the country are uninsured. With rising healthcare costs pushing large swathes of the population to below the poverty line, health insurance is a significant tool to beat the poverty trap. With a large number of small and medium enterprises mushrooming across the country, the need for insurance for assets and operations for business continuity cannot be over-emphasized. For protecting our agrarian side of the economy against the vagaries of nature, agricultural insurance can often come to mean the difference between life and death.
Beyond these fundamental drivers, the improving macro- economic situation of the country also augurs well for the industry. According to a 2015 Asian Development Outlook update, the GDP growth forecast for FY2016 is revised higher at about 7% with the expectation that exports will grow with continued economic recovery in the US and the Euro area. Besides, strong expansion in remittances will boost consumption demand, private and public investment will pickup as the business climate improves under a stabilizing political situation and spending will increase under the annual development program.
At Green Delta, our position with respect to the industry and how will we lead the sector in the coming years
We have maintained a solid lead over competition by emerging as Bangladesh’s largest non-life insurance company for the last 3 decades. This has been an outcome of our ability to stay a step ahead of competition which has, in turn, enabled us to consistently outperform the average industry growth.
Today, standing at the cusp of our 30th anniversary in 2016, we feel that the time has come for us to yet again reinvent ourselves and remain attuned to the prevailing developments. As is evident the world over, climate change has emerged as the biggest risk ever, threatening the very sustainability of our planet. Though world leaders are engaged in an active dialogue to mitigate these risks, the recent talks in Paris are an example, we seriously believe that change needs to begin with our own self first.
Bangladesh is a huge country with a swelling population. The nation is degrading – and disregarding – natural resources at an alarming rate. In order to limit, control and even reverse the damage, front line businesses like ours must take the lead in sustainability as this is the only way to go forward. Through this belief, we intend to build a profitable, long-term business by becoming a leading promoter of green initiatives to our customers. Our focus on a green future reinforces our resolve to operate our business in a responsible and ethical way and, in extension, reaffirm our commitment to never sell a product or a service that is flawed and does not meet the goals of our customers.
Looking at the youth segment of the market, which remains untapped in a country with a growing population between the ages of 25-35 years, there exists immense opportunities to promote retail insurance. Besides, our country’s strategic location as a gateway to the rapidly-growing South East Asian economies has seen a growing number of trade-driven enterprises. Looking into this part of the opportunity pie, the Bangladesh government established 10 Special Economic Zones recently to promote and encourage foreign and domestic investment. Besides, a tech park was also set-up, giving a direct fillip to the country’s burgeoning ICT sector. Bangladesh has also witnessed a rapid growth in tourism and to this extent the scenic Cox’s Bazar is poised to receive the largest investments for the development of infrastructure to accommodate the growing number of tourists every year. All these initiatives offer bright prospects for growth for front line insurance companies like ours.
“The future will either be green or not at all.”
What is the essence of the green direction at Green Delta
Foremost, green businesses are socially and environmentally responsible. Green companies adopt principles and practices that protect people and the planet. They challenge themselves to weave together the goals of social and economic justice, environmental sustainability as well as community health and development, into all of their activities — from assessing risk to employee relations to customer service.
At Green Delta Insurance, we have been relentlessly promoting green insurance. As a prudent, forward- looking practice, we take up only those projects that are environmentally-compliant and sustainable. We are also pursuing paper-less operations even as we firmly believe that saving on and optimizing the usage of resources is a key towards achieving a sustainable environment, both internally and externally. This is also why we promote the usage of emails, meetings through video-conferencing and the intranet for internal communications.
Green businesses also care for their workers. They ensure they don’t use child labour or engage in practices that are in deviation with the law. Everyone who works directly for them operates in healthy conditions. These enterprises create jobs that empower workers and honour their humanity. They also serve as models for the role businesses can play in the transformation of our society to one that is socially-just and environmentally- sustainable.
Hence at Green Delta, the future is green. This is a way of life for us.
Some of the major corporate highlights of 2015
In February 2015, we signed an agreement with the International Finance Corporation (IFC), a member of the World Bank Group, to develop insurance products for individual farmers, agri-businesses and financial institutions lending to farmers for protection from weather-related risks such as drought, excess rainfall and cyclones, among others. As per the terms of the agreement, later in the year we have signed a MoU with PRAN – one of the largest conglomerates in Bangladesh to provide Weather-Index Based Crop Insurance for its farmers. For a country where agriculture contributes 20%to the GDP and employs close to half the labour force, we believe that crop insurance will help to protect the rural economy, regulate farmers’ income and hence bring forth a certain level of reliability to this uncertain sector. Through index-based insurance, we will help provide a safety net to agri-business and offer a range of financial services to farmers aimed at securing their livelihoods.
To promote women entrepreneurship, the Company signed an agreement in June 2015 with IDLC Finance Ltd, a leading NBFI in the country, to provide Nibedita, a comprehensive insurance scheme for women. IDLC recently launched a similar product Purnota, within which Nibedita will also be embedded.
The Company, under Green Delta Securities Ltd, also provides holistic insurance services for migrant workers, through the Probashi scheme. It is a non-resident Bangladeshi investment account where such workers
benefit not only by securing their finances, but also with discounts on accommodation and special rates for health check-ups in Malaysia. The product will soon be launched in Singapore and Saudi Arabia, which along with Malaysia constitute the largest migrant destinations.
In the aftermath of the Rana Plaza tragedy of 2013, the Company also launched Shudin, a holistic health insurance programme covering workers in the RMG sector.
In December 2015, the Company joined hands with the Government of Bangladesh in the first ever project under the Universal Health Scheme, titled Shasthyo Suroksha Karmasuchi (SSK). Under the scheme, healthcare facilities will be provided to the over 100,000 under privileged citizens who will now have easy access to hospitals in certain areas. This will mobilize resources towards proper healthcare and facilitate easy access to medical facilities. Moreover, the scheme will ensure reduced out-of-the-pocket expenses for the underprivileged.
In order to facilitate convenient premium payments, Green Delta signed an agreement with Standard Chartered Bank, Brac Bank, The City Bank, Dutch-Bangla Bank Ltd for online payment services, also providing 0% instapay facilities. As such, company policyholders will be able to pay their premium by using any Master/Visa debit or credit cards. This will promote systemic efficiency and transparency.
Green Delta also signed an agreement with bKash, a mobile money transfer platform. Through this initiative, the Company intends to promote digital insurance and digital banking. In the digital space, the Company is also working with A2i (Access to Information) of the Prime Minister’s Office. A2i has 5,000 digital libraries across the country and the government has now realized the importance of having these libraries insured.
Overall, the Company has strived to promote and upgrade the retail products keeping in mind the various segments of the growing middle-class population and their improving living standards. Green Delta is going beyond insurance to provide a one-stop service for everyone with the motto ‘Anything, anytime, anywhere’, with a vision to progressively become a global insurance service provider.
About the Nibedita product
In a country where 52% of the population consists of women, Nibedita is the first comprehensive insurance product for women in South East Asia. It is not merely a product but an empowerment tool. It is a personal accident insurance scheme that provides economic security to women irrespective of their income, occupation or vocation. The scheme has been exclusively designed for today’s women, giving them the right to
think independently in terms of financial protection or revive their business in case of any accident or exigency. Moreover, it not only addresses women safety and health issues, but also provides social security through trauma allowances for victims of rape, road bullying etc. Green Delta is also developing the Nibedita mobile app for one- touch access to information and services.
At the close of 2015, we had few thousand women who secured themselves and their future with Nibedita.
Coming to the financial front, the near 12% growth in gross average weighted premiums in 2015 would a good achievement
Absolutely because this growth comes after almost three years of sluggishness. This was achieved by the addition of new business and retention of existing customers too. I am also happy to note that our strategy of widening retail insurance penetration paid off well with a near 25%growth achieved in retail premiums in 2015, which is the highest ever over the past few years. Our overall intention is to emerge as a one-stop insurance house for our customers and we are increasingly strengthening this proposition by offering bundled services that not only enhance their convenience but also reinforce our relevance as their insurance partner, which in turn goes a long way in solidifying customer loyalty.
A new frontier in business
GD Assist,a wholly-owned subsidiary is a good case in point. Launched in October 2014, GD Assist was conceived to provide value-added and advisory services around the core insurance product which included holistic healthcare services, logistics support and global emergency medical evacuation services, among others.
Today, GD Assist has joined hands with top Malaysian hospitals and acts as a one-stop solution for meeting most of the healthcare needs required while traveling abroad for this purpose. The company has partnered with Malaysia Healthcare Travel Council to promote healthcare products in Malaysia and has become the agent of Prince Court Medical Center, Ramsay Sime Darby, Sunway Medical Center, KPJ Healthcare, Institut Jantung Negara (IJN) and HSC Medical Center of Malaysia. GD Assist also works with MHTC–Malaysia Healthcare Travel Council, an initiative of the Ministry of Healthcare of Malaysia, to promote Malaysian healthcare in Bangladesh. GD Assist makes all the arrangements including consultancy, visa processing, ticketing,admission into the hospital, accommodation and transportation. Moreover, GD Assist plays the role of a knowledge aggregator for hospitals and doctors in Bangladesh and Malaysia.
It must be mentioned that Malaysia is widely regarded as one of the most preferred medical tourism destinations with modern private healthcare facilities and highly-efficient medical professionals. In 2014, Malaysia was ranked as the world’s best destination for medical tourism by Nomad Capitalist. It is estimated that almost 20,000 Bangladeshi citizens traveled to Malaysia in 2015 for healthcare purposes. This represents a near 33% growth year-on-year. Recently, the Hon’ble Health and Family Welfare Minister of the Government of Bangladesh visited Malaysia with the management of GD Assist to see first-hand the healthcare facilities provided by the Company. He appreciated GD Assist’s endeavour to provide world-class medical care for Bangladeshi patients at an affordable cost in Malaysia.
For the second consecutive year, Green Delta Insurance achieved the prominent ‘AAA’ rating from the Credit Rating Agency of Bangladesh (CRAB). We are the only insurance company in the country to have received the prestige of having this rating. AAA is the highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has an exceptional degree of creditworthiness and can easily meet its financial commitments.
Key awards received by the Company during the year
We are proud of the fact that our initiatives in pioneering the field of insurance in Bangladesh have been gaining industry-wide recognition. Our Adviser and Founding Managing Director and a towering luminary in the insurance sector, Mr. Nasir A. Choudhury received the ‘Lifetime Achievement Award’, bestowedbythe Center for NRB, a non-profit research organization. He received this prestigious honour for his outstanding lifelong services in revolutionizing the insurance industry of Bangladesh. Mr. Choudhury has more than 55 years of experience in the insurance sector. Mr. Choudhury also received the ‘Lifetime Achievement Award’ on the occasion of the 18th Asia Insurance Industry Awards (AIIA) hosted by Asia Insurance Review in Singapore. This is the first time any Bangladeshi insurance professional has received this award.
We received an award from International Finance Magazine (IFM) for the ‘Best Non Life Insurance Company, Bangladesh’. Green Delta has become the first non-life insurance company from Bangladesh to receive this prestigious honour. We also received the World Finance Award for being the ‘Best Non-life Insurance Company in Bangladesh’.
I am also delighted to state that Green Delta won the third prize for the ‘Best Presented Annual Report 2014’ in the insurance category, awarded by the South Asian Federation of Accountants (SAFA). This award signifies our robust corporate governance practices and provides a strong impetus to uphold the highest standards of governance in the sector in Bangladesh, going forward.
In fact, Green Delta is the only corporate in Bangladesh to have conducted training on corporate governance for the members of its Board and other senior management.
Similarly, we also received the International ARC Award for ‘Best Presented Annual Report’, the ICAB Award for ‘Best Presented Annual Report in the Insurance Category’ and the ICSB Award for ‘Corporate Governance Excellence in Insurance’.
PABL- The platform to create professions
We launched a training institute christened Professional Advancement Bangladesh Limited (PABL) in alliance with the Chartered Insurance Association (CII) of the UK, in April 2014. The prime objective of this institute is to extend demand-based training to the employees of Green Delta as well as external stakeholders, providing them with a strong platform for professional development in the insurance sector. PABL, which witnessed the successful pass-out of 21 students during 2015, enjoys affiliations with the Chartered Insurance Institute London (CII), the Insurance Institute of India (III) and the National Insurance Academy in Pune, India (NIA). All the candidates received sound placement offers in Green Delta and elsewhere.
Moreover, Green Delta provides student insurance in some of the leading Bangladeshi universities. The Company is also working with the University of Dhaka to develop a holistic insurance curriculum for MBA under guidelines issued by the IDRA.
Green Delta Securities
Green Delta Securities Limited (GDSL), our 100% subsidiary, is one of the most renowned brokerage houses of Bangladesh. The company offers full-fledged global- standard brokerage services for retail and institutional clients and is the only brokerage in Bangladesh to have received the prestigious CFI Award in 2014. GDSL has over 5,000 HNI clients and more than 10 institutional clients. The comprehensive services basket include brokerage, CDBL, tele-trading and custodian services, among others. It also possesses an online share order (OSO) software platform for executing trade for both local as well as international customers.
Green Delta Capital
Green Delta Capital Limited (GDCL), our wholly-owned subsidiary, has progressively emerged as one of the front line investment banking units in the country. The company’s primary aim is to connect local businesses with the global financial network. As such, it has developed a network of global associations with some of the leading global investment banks. Some of the company’s products and services include structured finance, corporate advisory, portfolio management and equity origination, among others.
Key trends to new business opportunity
We are looking at the concept of Takaful (or Islami insurance) that was introduced in Bangladesh to meet the demands of Muslims – who form 85% of the population – to conduct their economic activities in line with Shariah (Muslim way of finance). This has proven to be a viable alternative in providing insurance coverage for risks incurred in financial transactions and has come to represent an avenue for financial planning aligned with Shariah. Takaful is well-positioned to become an increasingly important component of the Islamic financial system in Bangladesh and we hope to venture into this space soon.
Moreover, Bangladesh government’s ‘Vision 2021’ aims to develop the country into a resourceful and modern economy through the efficient use of information and communication technology. This goal, described as ‘Digital Bangladesh’, is aligned with fostering growth of the country’s ICT sector that is growing at an estimated 20% per year. One of the strategic goals of Vision 2021 is to expand broadband to 40% in 2021. With this explosion of digital access, cyber security will be a risk to watch out for and we are also closely monitoring the developments in this field.
Overall, Green Delta has also taken up several initiatives to spread insurance in a country that has a population of over 160 million and where insurance penetration is less than 1% and 52% of the population consists of women. The Company believes in working hand-in-hand with all the stakeholders to spread awareness among the masses on the importance and benefits of insurance. Moreover, Green Delta is the only Company in Bangladesh to sign the Women’s Empowerment Principles (WEP) of the UN Global Compact. It has been recognized by the body for its stellar role in contributing to women empowerment. The seven principles of WEP include:
- Establish high-level corporate leadership for gender equality.
- Treat all women and men fairly at work – respect and support human rights and non-discrimination.
- Ensure the health, safety and well-being of all women and men
- Promote education, training and professional development for
- Implement enterprise development, supply chain and marketing practices that empower
- Promote equality through community initiatives and advocacy.
- Measure and publicly report on progress to achieve gender
- There is a big shift the world over in terms of technological innovation. The pace of change is astonishing and it is having a real financial impact. For instance, the franking revolution has slashed US oil and gas prices in less than a decade to historic lows. Driver less vehicles are on the roads of California, driving miles without human control. Paradoxically, Uber has emerged as the world’s largest taxi company with no taxis. To manage this bewildering change, countries and communities need to change the way they do business. We need to be more innovative and, for innovation to take place, we need to be more inclusive.
- When it comes to innovation and risk-taking, insurance, of course, has a critical role to play. And perhaps most importantly of all, insurance gives entrepreneurs the economic protection they need to take a calculated risk. And this protection supports greater risk-taking across the whole economy.
- At Green Delta Insurance, we have also taken initiatives to promote on line and digital insurance by joining hands with banks and mobile payment platforms. We are developing the Nibedita app for mobile phones for easy access. Moreover, with the growth in the information and communication technology sector in Bangladesh, including the recent setting up of a hi-tech park, there exists an enormous opportunity to tap this
- At Green Delta, we increasingly envision a future that is green, sustainable and inclusive and this is the direction we have chosen to take for ourselves even as we focus on our vision of ‘insurance for all’ and foresee a country where citizens recognise the value of insurance to their financial and social wellbeing.
Farzana Chowdhury ACII (UK)
Managing Director and Chief Executive Officer