Abdul Hafiz Choudhury
Independent Director and Chairman
Through its focus on inclusive insurance, Green Delta Insurance is delivering inclusive value, sharing success with investors, customers, employees and the society It is a great privilege to report to you at the start of my term as your Chairman. The year 2019 was a period of further achievement and considerable success, as we continued to accelerate growth in our key focus areas, while continuing to serve our customers with relevant, high-quality and value-based insurance products and services.
At Green Delta Insurance, our purpose is to help remove uncertainty from and provide our customers with what they require the most as they embark on the big events of their life – financial peace of mind.
We strive to create an inclusive insurance platform that serves diverse communities. We focus on maximising the impact of insurance by raising awareness about the importance of financial protection through insurance among our customers by embracing prudent underwriting practices, by meeting claims on a timely basis and by controlling liquidity in a regulatorycomplaint manner that enables enhancement of our solvency. By enabling our customers access to insurance, we also help build stronger communities and drive continuity in achieving circular sustainable growth.
Our strategy is aligned to certain key structural trends – the protection
needs of the fast-growing middleclass of Bangladesh, the financial security needs of businesspeople as they embark on new ventures or scale up existing businesses, and the self-assurance needed by neglected groups, including women, informal, impoverished workers and migrants, etc., to break out of their socioeconomic circumstances.
We have continued to develop our products and our capabilities in order to improve the way we meet our customers’ needs. We are creating new, better and more personalised products, and we have a flexible, collaborative approach to incorporating the most suitable digital technologies into our operations.
The gap between the insurance cover of people in Asia and what they need in order to maintain the living standards of their families. I’m proud that as the largest general insurance company of Bangladesh with a base of over 1mn customers, we help to bridge this gap with a broad range of insurance products and solutions
in a market that needs insurance protection the most.
A SUCCESSFUL STRATEGY
We deliver on our clear strategy and our long-term opportunities by paying close attention to the needs of our customers, by responding to those needs with products that fit their changing requirements, and by improving our capabilities continually in order to deliver the best products in the most effective and economical way. One of the key components of our strategy is to engage in collaborative, synergistic and consequential partnerships that help us meet the ultimate objective of maximising the impact of insurance among our customers, especially those that require insurance protection the most. For example, our partnership with the International Finance Corporation to provide weatherrelated risk insurance has enabled us to successfully strengthen the techno-financial capabilities of the farmer-lender ecosystem. This has helped to seamlessly administer agricultural insurance, facilitated by nu-obstructing credit mobilisation constraints faced by farm communities, thereby enabling sustainable agri transformation. Hundreds of farmers have benefited from this and we hope the demonstrated impact gets an increasingly larger agricultural acreage under insurance protection. Envisioning inclusive insurance, we believe such collaborative partnerships will become even more potent with the strong digital tech layer that we are ensconcing our retail insurance platform with.
SUPPORTING CUSTOMERS AND COMMUNITIES With climate change resulting from global warming, demographic changes and technological progress, we are witnessing rapid changes in the society,
the economy and the broader operating environment today. In 2019, 820 natural catastrophes caused overall losses of US$ 150bn. This was due to the high share of losses from floods, which is often not insured to the same extent as wind damage in most industrial countries. This is evidence that large sections of the global market remain uninsured, especially in emerging and developing countries. On average over the past 30 years, about 52,000 people per year have lost their lives in natural catastrophes. The purpose of Green Delta Insurance’s business is to support customers and societies in times of need – and part of accomplishing this purpose is to protect customers after the accidents and disasters and also to support them in tackling new challenges of tomorrow. To ensure that we are always able to accomplish our business purpose of meeting customer claims, we have been gradually expanding and diversifying our insurance platform such that no one particular product segment or industry exposure exceeds our set limits. These efforts were reflected in the Company’s financial results for 2019. Though Bangladesh was struck by natural disasters and other catastrophes, our overall financial results were supported by our robust diversification measures. So, our ability to continue to stably operate our business, even in years with high frequency of natural disasters and other catastrophes, has enhanced the confidence of our shareholders in our business and operating model.
STRENGTHS THAT SUPPORT OUR MODEL At Green Delta Insurance, we will continue to develop our strengths which drive our operating model to create sustainable value.
- Culture and DNA Our key strength and differentiator is our focus on the long-term that enables us to take decisions that are in the best interests of our stakeholders and that create sustainable value. Our Group culture is also what differentiates us, and we have always worked with people and the society to help them face challenges through liability insurance. In recent years, our business has nationalised rapidly, and we have welcomed a diverse range of employees from different backgrounds.
- Portfolio balance Our next strength is the balance that we have been able to achieve within our portfolio. After deriving success in general insurance, we have embarked on offering our customers specialised and targeted insurance products and services that are anchored on meeting specific needs. Our focus on innovation and partnerships have also led us to diversify and broad-base our insurance platform. Today, we are focusing on expanding retail insurance and providing personalised solutions, aligned with the trend of a growing and unprotected middle-class population in Bangladesh.
- Network Our network both inside and outside of Bangladesh represents a key competitive driver too. Within Bangladesh, our home country, we have a wide network of both retail distribution and claim services that enable us to be responsive in addressing customer needs and in supporting claims. Outside Bangladesh, our network spans both developed and emerging countries through our partnerships with reinsurance companies and others in the insurance ecosystem.
- Insurance knowledge Our other core strength is our high level of specialty and accumulated knowledge in insurance. The insurance business demands a high level of specialised knowledge – from product development, underwriting, risk management and claim service to regulatory compliance. We have been able to utilise our expertise developed over the years to create innovative products and services that continue to meet the evolving needs of our customers.
- Balance sheet Our next strength is our sound financial base. Insurance is a business rooted in the community and the need to provide safety and security to customers. This requires stability, and we derive that stability from a sound financial base. Today, we continue to develop our stable business portfolio through risk diversification and, as evidence, we have the highest credit rating in the insurance sector of Bangladesh.
A POSITIVE OUTLOOK
We have a clear strategy that is focused on long-term trends in Bangladesh – expanding middle-class that is becoming increasingly rich and is yet under-protected, growing out-of-pocket healthcare spends driven by higher healthcare costs and rising incidence of diseases, and near non-existent farm insurance protection leaving vast swathes of people at risk due to any crop failures, to indicate a few.
Bangladesh is on the throes of a massive transformation, with the per capita GDP expected to top India’s during this year. It is compelling to note that the mean income divide between India and Bangladesh has sharply narrowed from 87 per cent in 2011 to about 25 per cent today.
Taking advantage of favourable headline indicators and a time-tested business model, we’re pushing ahead with our focus on inclusive insurance in our endeavour to close the insurance protection gap in Bangladesh by as much as possible.
Customers have been at the heart of our company for over 40 years now. It is by serving all our customers well that we are able to generate strong returns for our shareholders, provide rewarding roles for our people and invest in our local communities, in effect, driving economic activity and growth.
Alongside acknowledging these benefits, the Board also ensures it engages with our regulators and the wider civil society to promote the interests of our customers that enable us to serve them better. We are focused on building a sustainable business and this focus ensures we are able to keep the vital promises that we have made to our customers.
I sincerely thank you for being a part of our journey and look forward to having you with us now and well into the future.
Abdul Hafiz Choudhury Chairman