Bangladesh's life insurance market is likely to expand US$1.5 billion in the next three to four years, driven mostly by a growing economy, a senior MetLife executive has said.
"Currently, Bangladesh's life insurance market is around $1.0 billion a year and we expect it will expand at least 50 per cent in around 2020," Chris Townsend, the US-based insurer's Asia president, said.
Bangladesh's economy has grown over 6.0 per cent in past decade and the life insurance has also advanced steadily, he said, drawing a close relationship between the GDP growth and the insurance sector.
"Insurance growth outpaced the GDP rate," Mr Townsend, who had visited Dhaka in the past week, told the Financial Express in a recent interview in Dhaka, and called the industry "amazing."
He has been president of MetLife's Asia region since 2012. He is also a member of the company's executive group.
He oversees all of MetLife's businesses and operations across 12 markets in Asia including Bangladesh and he said that the country's market is one of the fastest growing in the continent.
He, however, noted Bangladesh's insurance penetration remained lowest in South Asia as the rate in other countries was around 3.5 per cent.
"Bangladesh's penetration rate is around 0.5 per cent, which indicates the level of development of insurance sector in a country," he said.
Penetration is measured as the ratio of premium underwritten in a particular year to the GDP.
For a robust growth of insurance business, he placed importance on the partnership between the banks and the insurers.
He believed that such partnership with the banks will accelerate insurance growth and enhance its penetration tremendously.
Terming it a key challenge for Bangladesh, he said most of the countries and the insurers of the region had distribution channels named bancassurance.
"We believe the biggest opportunity for the growth in the sector is bancassurance…," he said.
Bangladesh's insurance sector is run though an old-fashioned mode and MetLife Bangladesh has 15,000 agents.
He said his company had been the number one player in the past 20 consecutive years commanding a market share of around 28 per cent.
He disclosed that the MetLife Bangladesh has emerged the biggest investor in the country's government bonds with its share equivalent to over $1.0 billion.
"We are the biggest investor in the government's long-term bonds," he said.
He said that Bangladesh is one of the fastest growing market for the MetLife. Bangladesh ranks number four country in terms of its profitability in the region.
He said globally they over 200 products and they launch products on intensive research on the needs and expectation of the customers.
MetLife has around 12 products in the country now.
He said his company has been promoting actuary education through scholarship to deserving students.
Prior to joining MetLife, Townsend was, since 2010, Chief Executive Officer of the Asia Pacific region at AIG.
Townsend currently sits on the Board of Directors for MetLife's philanthropic organisation, the MetLife Foundation.
He also serves as Vice Chairman of the US-Korea Business Council, Advisor to the Asia Society, and Commissioner on the Asia Economic Strategy Commission (AESC) at the Center for Strategic and International Studies (CSIS).
MetLife bought American Life Insurance Company in 2010 and Bangladesh's operation also merged thorough MetLife.
He said half of its business comes from two major cities-Dhaka and Chittagong and the remaining from other districts.
One of his key objectives to visit the country was to launch a tab-based insurance solution named "Butterfly,' which helps calculate premium rates easily.