Idra issues guidelines for insurtech
The insurance governing body in Bangladesh has established a structure that allows technology startups to create unique insurance plans, distribute them, and perform other related duties.
The decision is made to improve how customers feel when using digital platforms, make managing claims more efficient, and offer customized insurance policies.
The Insurance Development and Regulatory Authority (Idra) plans to release the Insurance Development and Regulatory sandbox guidelines-2023. The Daily Star has obtained a version of the guidelines.
In the sandbox, technology startups have the opportunity to seek approval for creating insurance offerings, promoting the policies, offering claims services, evaluating risks, and providing various other insurance services.
To achieve this, the startup that is officially recognized must submit an application to the governing body, accompanied by a qualification certification issued by the Bangladesh Association of Software and Information Services (BASIS).
The startup will additionally need to establish a contractual agreement with an insurance firm.
"We have implemented this sandbox with the aim of promoting the integration of IT in the insurance industry and encouraging creative advancements," stated Mohammad Zainul Bari, the chairman of Idra, in a recent conversation with The Daily Star.
"By implementing this measure, I believe that it will serve as a catalyst for young individuals to drive innovation within the industry and also bolster the levels of insurance coverage," he further stated.
According to him, in case IT or fintech companies can develop an inventive insurance resolution, the Idra has the capability to link them with associated insurance suppliers.
Tech innovators appreciated the move.
"We are grateful to the Idra and its chairman for embarking on this significant endeavor. It is bound to revolutionize the insurance industry of the nation," expressed AKM Fahim Mashroor, the BASIS standing committee on fintech and digital payment's chairman.
The insurance sector in Bangladesh is significantly lacking in development, as only a meager 3 percent of the population and local enterprises have availed any form of insurance coverage.
"It [insurance penetration] needs to surpass 10 percent comparable to neighboring nations. With the emergence of novel technological platforms enabling the introduction of innovative insurance offerings, we anticipate a significant uptake of insurance products in the coming three to five years," expressed Mashroor.
BASIS has been collaborating extensively with the Idra to create the blueprint for this experimental space, he added.
The insurance industry in various nations, including those in the subcontinent, exhibits significantly greater market saturation and a more extensive array of offerings when compared to Bangladesh.
As an illustration, there are over 110 startups dedicated to insurtech in India, and approximately 335 similar companies in the Asia-Pacific area.
In Bangladesh, approximately 10 technology companies are collaborating with insurance firms to offer digital insurance solutions or facilitate insurance services using information technology.
According to Mashroor, technology firms will assume a greater responsibility in creating and advancing offerings for this industry.
