The Financial Express

Covid hits non-life insurers’ earnings

| Updated: October 23, 2020 21:19:50

Covid hits non-life insurers’ earnings

The overall gross earnings of the non-life insurance industry plunged by more than 20 per cent in April-June period from that in the January-March period, 2020.

The premium of 46 non-life firms amounted to Tk 8.0 billion in the second quarter or Q2, down by 20.18 per cent from Q1, according to official statistics.

The miscellaneous and marine (cargo) risk coverage was the most impacted by the pandemic. The miscellaneous premium earnings dropped by 39 per cent, marine (cargo) by 29 per cent, marine (hull) by 14 per cent, motor by 20 per cent and fire by 8.0 per cent.

However, five non-life insurers posted positive growth in the period. They are: the Bangladesh General Insurance, Sikder Insurance, Eastland Insurance, Karnaphuli Insurance and Global Insurance.

The worst-hit non-life firms, whose gross earnings fell by more than 50 per cent, are: Standard Insurance, Bangladesh National Insurance, Paramount Insurance, Meghna Insurance and Prime Insurance.

When contacted. managing directors and CEOs at the non-life insurance companies said the overall business fell in the quarter under review as almost all types of economic activities were halted during the period as a significant part of the quarter fell in the lockdown.

They said the number of new letters of credit (LCs) in the period was too poor, which had been reflected in the marine earnings.

Khaled Mamun, managing director and CEO at the Reliance Insurance Company, told the FE: "Economic activities were almost halted during the period and this has been reflected in the overall earnings".

A large proportion of this industry is dependent on industries and businesses such as export, import, travel, hotels and infrastructure.

He said there were no sales of motorised vehicles in the period and this has been reflected in the vehicle insurance earnings.

Mosarrof Hosssain, managing director at the Global Insurance Company, said that they had worked hard during the period.

"I don't believe that the economy was totally halted, there were economic activities, the pace was slow, but business was there", he commented.

Mr Hossain said the development officers had good efforts in the period as the livelihoods of them depend on the earnings from the industry.

On the other hand, Prime Insurance, whose business contracted massively, told the FE that the system of their business is that they depend on business procurement by their regular employees, not development officers.

"We all had stayed at home during the period, there was some online-based business", said Sujit Kumar Bhowmick, chief underwriter at the Prime Insurance.

He said to sell new policies during the lockdown in the wake of Covid-19, they depended heavily on digital architecture staying home.

Mr Bhowmick said the third quarter ending September had good turnover.

"We're recovering fast," he added.

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