From the long-term perspective, weremain steadfast and focused on our value creation approach for our shareholders and stakeholders, thereby reaffirming our commitment to support our customers, employees, business associatesand the society. Creating institutional value is the need of the hour and the purpose of our existence.

Dear shareholders,

I hope you and your loved ones are keeping safe. In these troubled times we pray to Allah the merciful to help us overcome the challenges and restore normalcy back again in our lives.

The persisting Covid-19 shadow

The second wave of the Covid-19 pandemic was more severe and terrifying for many. The ripple effect of this devastation has left people and economies struggling to get back on their feet. Amid the gloom, ‘hope’ has emerged as a saviour as always.

It is hope that binds humanity, helping it overcome every challenge, no matter how daunting. While we expected vaccines to be the ultimate panacea, today, the Omicron variant of the virus has shown that no one is safe until everyone is safe. This variant is by this time causing significant challenges to an already-strained healthcare system and with mobility sanctions expected to be put back into place it can have a potential impact on the GDP too, thus derailing the recovery process. While Bangladesh has been able to regain its economic momentum, with growth across some sectors even crossing the pre-pandemic levels, the resurgence could stall if the threat of the third wave is perceived to be a high-risk event. Yet, Bangladesh’s sheer intrinsic resilience could help the nation tide over any near-term challenges. Furthermore, many scientists have presaged that this virus may eventually bring the pandemic to an endemic stage because it can lead to mass immunity on account of its mildness and high infectivity. We remain hopeful.

Age-old insurance support to humanity

Since centuries, the insurance industry has played a critical role in supporting the efforts of humanity during times of distress. Be it man-made calamities or natural catastrophes, insurance has been a key tool to compensate for or offset the losses and restore things back to normalcy.

The state of the world today has accentuated the need for insurance. A study by Christian Aid, UK, has indicated that the 10 most financially devastating climate events of 2021, including hurricanes in the US, China and India, and floods in Australia, Europe and Canada cost $170 billion in damages. Hurricane Ida, which pummelled the eastern US, cost the economy $65 billion. Floods caused economic losses of $43 billion in Europe, and over $17 billion in China’sHenan province. The report’s authors estimated damages based on insured losses, which means the true cost of these disasters are likely to be even higher. Interestingly, the rising temperatures across the globe have led to some cities appointing heat officers responsible for cooling interventions,especially for vulnerable sections of the population. Imagine, the world has come to this.

However, a critical issue in insurance over the years has been the embracing of this critical solution by only a few. It is paradoxical that despite insurance being critical, there exists a far greater number of those who’re uninsured against those that are insured. Take insurance penetration in Bangladesh. It is woefully low with only one person being insured amongst a 100. Even neighbouring countries like India have a measly insurance penetration of about 3%.

The under-penetration of insurance products in Bangladesh has been highlighted and red-flagged in many forumsfor several years. The risk that such under-penetration presents is not just limited to a fewsections of the society, but is a risk burden borne by the entire nation. Adequate insurance coverage can have a huge positive cascading effect, causing deep transformation in not just the health and wellbeing of the citizens of the nation, but also in the entire healthcare industry. Precious government resources could be freed up and redirected to other important spends, such as on infrastructure. Thus, the need to scale up both the reach and penetration of insurance across Bangladesh’s rural and urban population is something that cannot be ignored anymore. We urge the government to take up “Insurance for all” with renewed vigour.

The pandemic and digital insurance

In our view, this pandemic will have far-reaching implications on consumers, businessesand the society at large. Though the immediate impact and responses have been played out, yet the real transformation is a journey that has only just begun.

We strongly believe that the world on the other side of this crisis will be a “phygital” one that blends the best of the physical experienceswith the conveniences of digital. In our view, there is a re-assessment of risk perception across the globe and particularly by consumers in Bangladesh and elsewhere in the developing world that has limited public healthcare systems and infrastructure, which will structurally increase the demand for comprehensive insurance and risk management solutions.

The impact of the pandemic has not been lost on those that have been pushed into poverty because of increased healthcare expenses triggered by the pandemic. After suffering from the first two waves, it would be dangerous to underestimate the threat posed by Omicron, given the continued brittle quality of Bangladesh’s healthcare infrastructure and how easily it could be overwhelmed by the numbers. Hence, in the absence of any major government-sponsored safety net, insurance should be viewed as a tool assuring not just health security, but financial security as well.

Amidst the pandemic, we believe that organisations will have to prepare for new ways of working, with hybrid working, greater choice and flexibility to employees becoming the norm rather than the exception that will result in re-designing of organisational structures, policiesand practices. In the context of growing digitalization and our focus on reimagining insurance, we are accordingly working towards enhancing our insurance solutions to make them conveniently available and loaded with self-service capabilities for our customers, further automating our distribution applications for channel partners, all while transforming ourselves as an organisation committed to the growth and welfareof our employees.

We have instituted an exclusive digital transformation division deputing specialist resources to build our digital solutions and ecosystems. The idea is to not only progressively digitize the entire lifecycle solution- from customer onboarding to claims settlement, but also as a means to expand insurance accessibility and coverage, which is our ultimate mission in our Insurance for all theme. While digitalization enables us to circumvent legacy costs, it also helps save costs over the long run, which subsequently boosts the bottom-line and builds the case for further investment.

Thus, it is clear that while the pandemic has played in accelerating digitisation across sectors, when it comes to the insurance industrythis journey has only just begun. At our Company at least it continues to accelerate, given the developments in the InsurTechspace. Further, the regulatory authority, IDRA, has been encouraging technology adoption as it works towards creating a conducive ecosystem for the introduction of innovative InsurTechsolutions. As we look ahead, to my mind, innovative technology-enabled solutions will find increasing usage in the insurance sector, especially considering the advancements in digital technologies itself.

Being a part of this industry endows us with a responsibility that is far greater than simply meeting the demand for insurance products. As we come to realize the limitations of the traditional insurance solutions in providing an armour against a pandemic-like situation, there is a need to explore ideas to address new-age as well as pandemic risks, which have a much wider impact, compared to regular risk events. This perfectly dovetails with our Insurance for all thesis as well.

Performance overview

Coming off from 2020, the year 2021 was one in which we harnessed the learnings of the past and forged ahead towards meeting our business objectives while keeping a check on all health and safety standards in a Covid-safe way. The result was that we achieved a satisfactory financial performance for the year.

• Gross claims paid more than152 crore
• Gross premium rose by 5%
• Operating profit expanded by 25%
• PAT expanded by 15%
• Return On Equity (ROE) 12%

Turning in a solid financial performance raisedour ability to declare a dividend, which has been proposed at Tk 3 per share for the year. This is in comparison to Tk 3.2 per share paid in the preceding year.

While this performance is broadly attributed to our proactive initiatives in retaining our business and achieving new growth, it is also a testament of the economic recovery taking hold in the country. Besides, the broader economic context was also one where we faced pressure on insurance premium rates, driven by regulatory conditions that favoured demands of interested business groups in this regard. Regulators took a view on this while also being supportive of overall economic and trade recovery. To offset pressures we focused on portfolio mix while also looking to expand business volumes.

Furthermore, while overall claims intimation was low, claims settlement was probably the highest ever in a single year in 2021 at Tk 152 crore. Though negative Covid-triggers underlie the pressure on claims, we stood tall with a claims settlement ratio of 9% for the year. While this speaks of the solidity of our balance sheet, it also reflects what we have always stood for- standing shoulder-to-shoulder with our customers. The pandemic gave us the opportunity to build trust with our customers and reinforce our reputation as one of the most trusted and dependable insurance companies of the country.

A year of partnerships

Despite the Covid-related restrictions and challenges, it was a busy year for Green Delta Insurance.

In December 2020, the impact of which was felt in the year under review, we signed a deal with AB Bank. Under this broad agreement, the bank will avail Bankers Blanket Bond (BBB) and Electronic Computer Crime (ECC) insurance policy from Green Delta Insurance.

I’m proud that in August 2021, we launched our online VAT software for automated VAT return processing, emerging as the first in the insurance industry to do so. Several dignitaries attended the virtual launch, including those from the IDRA, Bangladesh Insurance Association (BIA) and LTU-VAT. The software was aligned to the high priority we place on compliance, observing the National Board of Revenue advisory on all organizations with turnover above Tk. 5 crore requiring to implement the VAT software for automated return processing. While we have been automating and digitalizing our business processes and customer experiences since 2019, we intend to go paperless in the near future, and the implementation of VAT software to automate VAT return processing is fully aligned with our organizational goal. In fact, Member of IDRA, Mr Md. Dalil Uddin appreciated this initiative and hoped that other organizations in the insurance industry would follow in our footsteps.

In October 2021, we forged an agreement with Pathao to introduce insurance coverage for ride sharing. Pathao is Bangladesh's largest ride-sharing platform and this insurance coverage seeks to ensure a safe commuting experience for all users, riders and captains of Pathao. Symbolically, this agreement was signed on the National Road Safety Day, thus highlighting the importance of road safety for all. Under the insurance policy provided by Green Delta Insurance, Pathao users, riders and captains would receive coverage in the event of accidents while using Pathao rides. The coverage includes out-patient expenses, hospitalisation expenses, permanent disability and even accidental demise up to Tk 1 lakh. Such financial compensation through insurance coverage is complemented by Pathao already offering several features to ensure safety of its users, such as GPS tracking, necessary information capture of passengers, riders and captains, VoIP call, emergency button, etc. As ride-sharing becomes more popular and is embraced by an even larger number of customers, our insurance policy will be a beacon for the rest of the industry. It also showcases our proficiency in risk underwriting and knowledge of various insurance solutions that has helped us to build insurance solutions that are relevant to diverse consumer needs.

In November 2021, Green Delta Insurance partnered with Robi Axiata, amongst Bangladesh’s top-2 telecom service providers, to offer health insurance package under ‘Hospicash’. The packages covers disability, hospitalisation, surgery, OPD costs, hospicash and accidental cash with a reasonable annual premium. Thus, through this partnership, Hospicash is now available countrywide through Robi’s digital distribution system, rStore.By removing the hassle of traveling long distances and filling up numerous forms, the initiative promises to take the timely hospicash services to the doorstep of last-mile customers who were previously deprived of such services. It will also help Robi Axiata add a new vertical of services to their 10,000+ rStores located in all the 64 districts of the country. Notably, rStore is an aggregator platform of RobiAxiata that empowers retailers to sell products and services like mobile phones, electronics, gadgets, ticketing, mobile recharge, bill payments, insurance, etc.

Awards galore

At Green Delta Insurance we are an award-winning Company. We are bestowed with several accolades and laurels from industry groups and other reputed global as well as domestic institutions. These truly inspire us to work harder to create an even greater impact through insurance.

Aligned with our focus on continuously enhancing our corporate reporting practices we’ve arrived at a point in our journey where we are delighted to build trust with our investors and shareholders through our Annual Report that has emerged as a benchmark in corporate reporting. Aligned with this, we received the first prize of the prestigious “ICMAB Best Corporate Award-2020” in the Insurance category.This is the fourth consecutive year that GDIC has won the first prize in ICMAB Corporate Award. [we need to mention other awards bagged during the year]

Fostering a multistakeholderapproach

At Green Delta Insurance, we are encouraged by the awareness that the pandemic has raised about insurance as well as the regulatory support that is creating a facilitative environment. Further, continuing to be guided by our core philosophy of putting the customer at the centre of everything we do, we are embracing technology to deepen customer service. Yet, our endeavour is to make technology the fulcrum of every solution we provide. Today, our digital e-comm foray provides end-to-end self-serve experience to our customers via both desktop and mobile. At the same time, we are equipping our channel partners and employees with relevant digital solutions to handhold our customers, thus ensuring service continuity and continuous support.

Going beyond our role as an insurance provider, we are committed to serving the society through the various citizenship initiatives that we undertake throughout the year. Our employees have volunteered, driving several projects that are focused at uplifting the economically unfortunate sections of the society. By identifying critical areas of assistance, we will continue to give back to the society. Such non-profit humanitarian assistance is integrated in the very ethos of our Company as we focus on security, empathy, wellbeing and care for all.

A bigger emergency looms

While the Covid-19 tragedy is one where humanity has got together to find solutions to solve and put an end to the crisis, a much bigger emergency has been looming silently in the background for decades. We can no more pretend to ignore climate change. And together, we need to rethink our ideas of progress. As laid bare by the pandemic, runaway pollution, unchecked emissions and increased man-animal conflict can spell disaster and cause a major setback to humanity.

It is heartening that Bangladesh has been an active participant at all earth summits. Continuing with this tradition, Hon’ble Bangladesh PM Sheikh Hasina emerged as an active mouthpiece of climate protection at the Glasgow COP26 summit held in November 2021. She remained optimistic and informed the conference about Bangladesh's closure of 10 plants run on coal, a dirty fossil fuel. Thus, Bangladesh has reasons to take pride in its unwavering resolve to make earth free of all adversities tied to climate change. With the tone set by the top, climate management is something that can no longer be ignored by industry and institutional funds, including green finance, should go into building the requisite infrastructure for developing climate-resilient systems. Through institutional funds, insurance companies can play a part here.

Environmental, Social and Governance (ESG) principles that have captured public discourse will serve as the new parameter to measure the performance of corporates and institutions, thus transcending just profit evaluation. At Green Delta Insurance, we have been making sincere efforts to strengthen our ESG initiatives, thereby moving further ahead in our vision of being a responsible insurance institution.

A few things we need to do in the future

The government should continue to spend on infrastructure and it must maintain its focus on investments. While there is recovery, it needs to be sustained and that too for long periods for the country to reach its developmental aspirations in being a middle-income nation. The nation’s per capita income surpassing India’s is a sign that we are on the right path. Overall, there is fiscal space for the government to continue the focus on investments and, most specifically, on infrastructure, as it is a driver of demand, global competitiveness and employment. Growth in trade and commerce will directly contribute to the buoyancy of the insurance industry.

Further, the government must continue to improve ease and cost of doing business. We need to ensure policy stability, because if we want the private sector capital to come in stronger, particularly from overseas, then they look at policy stability as one of the most important factors in the decision-making. Furthermore, I believe there is also a need for a cohesive policy roadmap to help us transition to a greener future and a policy on how we further nurture the start-up ecosystem.

In addition, we need to focus on health and education to reduce the burden on the lower socioeconomic strata.Particularly because of health, people have incurred more expenses than they had budgeted for and they remain concerned about future potential expenses. Besides, government spend on healthcare needs to go up as a percentage of the GDP. This is also essential to build public confidence in institutional healthcare.

Further, the government and regulators should consider the industry’s long time demand for bancassurance. This channel, leveraging the existing banking infrastructure, has the potential to revolutionize access to insurance amongst the masses. Opening up bancassurance will also showcase the government’s emphasis on making insurance commonplace, which is so important considering the learnings of the pandemic. For insurers it will open up yet another distribution channel and for Green Delta Insurance it will be a core part of our omnichannel strategy, while strongly contributing to our goal of Insurance for everyone.

Gratitude

Despite the difficulties it created, Covid-19 most certainly also brought out the best in so many people, and heroes emerged from everywhere this year. The insurance industry is no exception and I want to thank the Board, my colleagues on the executive team, our dedicated staff and business partners, the regulators and, of course, our customers for the courage, commitment and care that has so widely been in evidence throughout 2021.

An organisation is a unified identity given to a large team of individuals playing significant roles at every level. Our existence is defined by our employees and they are our most important asset. I take this opportunity to thank our dedicated employees who have gone beyond the call of duty to support our stakeholders in every scenario. Their efforts are an inspiration and as part of the management we will try every way to support our employees, be it their professional aspirations or personal exigencies.

Even as we hope for normal times to return at the earliest, we are treating the current phase as a great learning experience, the lessons of which would stay with us for decades to come. We hope to continue to remain focused and fast in our endeavour to build a more robust and sustainable business, while emerging as a conscientious corporate citizen inspiring responsible change. Before concluding, I want to share with you our outlook for 2022. We are entering the new financial year with many exciting opportunities as well as a few challenges in front of us. Nonetheless, we are confident that we will maintain our trajectory of growing faster than our industry.

Your affection and confidence motivates us to do more. We are truly gratefulfor your support and look forward to meeting you at the forthcoming annual meeting of our shareholders and other occasions.

The best of Green Delta Insurance is yet to come.

With warm regards,

Farzanah Chowdhury
Managing Director and CEO