“Insurance corporate tax should be reduced a little. Our management costs are getting a bit higher. Management cost is high because we have to spend on marketing to expand our business. Due to this investment, the management cost increases.’
Ahmed Saifuddin Chowdhury was talking about the insurance of the country. Saifuddin Chowdhury, who started his career in insurance, has been serving as the Chief Executive Officer of Bangladesh General Insurance Company (BGIC) for a long time. He recently talked to Jago News about what kind of benefits should be given to the insurance sector in the next budget, barriers to insurance business, ways to expand business, bring new products. The interview was conducted by Saeed Shipan, senior reporter of Jago News.
What are your expectations for the insurance sector in the upcoming budget?
General insurance companies collect value added tax (VAT) from consumers and remit it to the government coffers. Better to reduce VAT from 15 percent to 10 percent in the upcoming budget to protect insurance. Because every man thinks whether he can sell his product in the market according to the cost. If the cost of the product is higher than other countries then the price will be too high, then it will not sell. Then the number of insurance customers will decrease. If the tax is less and the volume is higher then the government will be benefited.
Stopping motor insurance was a wrong decision. I think motor insurance should be there. Because not only the car is damaged, people can also be damaged. In my opinion motor insurance should be reformed rather than discontinued.
In recent times, the number of insurance customers seems to be decreasing. What do you think is the reason behind this?
Insurance premium rates in our country are quite high and running on tariffs. Tax, VAT should be reduced to reduce the premium rate. It should also be made non-tariff. If it is made non-tariff, it will be seen that I can find the market and sell it for 20-30 paise. This will increase the volume. If the volume increases, as the government will get income, the insurance company will also develop.
What are the tariffs abroad?
Non-tariff to foreign countries. If we take India as an ideal, India is a non-tariff market. Pakistan is non-tariff. Bangladesh should also be made non-tariff.
How do you view the rate of corporate tax on insurance?
In my opinion the corporate tax on insurance should be reduced a bit. Our management costs are getting a bit higher. The reason why the management cost is high is because the business needs to spend on marketing to expand. Due to this investment, the management cost increases. But if the corporate tax is reduced, I think every company can contribute a lot to the expansion of insurance.
Another thing is that the government deducts tax from the dividends paid by the listed companies to the shareholders. Whereas the company distributes dividends after paying taxes on the income it earns from its business. This results in tax being deducted twice on the same amount. I think the tax on shareholder dividends should be abolished. I think it will bring more investment in the stock market.
After the discontinuation of motor insurance, initiatives have been taken to bring it back. What is your opinion on this?
Stopping motor insurance was a wrong decision. I think there should be motor insurance. Because not only cars are damaged, people can also be damaged. In my opinion motor insurance should be reformed rather than discontinued. Now the compensation for motor insurance damages is 20 thousand rupees. 20 thousand rupees is not much nowadays. It can be paid in two lakh rupees. In case of property damage, the compensation is Rs 50,000, which can be increased to Rs 3 lakh.
In order to introduce new products, those working in product development in Bimakha who have more than 25 years of experience should be retired. At the same time, the new generation should be given the opportunity to work.
In this case voluntary access can be provided at a premium. If the customer does not take 30 percent of the compensation, the insurance company can give a discount of 40 percent of the premium to the customer. If the customer does not accept 50 percent compensation, the company can give him 60 percent discount on the premium. It will also reduce the rate of premium.
What kind of new products should be brought for the development of the insurance sector?
In order to introduce new products, those working in product development in Bimakha who have more than 25 years of experience should be retired. At the same time, the new generation should be given the opportunity to work.
Initiatives are being taken to seek IDRA’s approval for the appointment of Company Secretary and Chief Financial Officer (CFO) by amending the Insurance Act. How do you see the matter?
I welcome it. Because the CFO of a company is very important. The CEO plays the master role in the company. When the CEO makes a decision, the CFO must analyze it. How effective or ineffective is the decision made by the CEO. If ineffective, he must convince the CEO with logic. It is a good initiative to provide for the appointment of such an important post officer with the approval of the regulatory body.
A loan cannot be arranged for a director or his family members by mortgaging the shares of the company, another such amendment has been taken in the law. How do you see the matter?
I have invested. I may need money at any time. Why does it stop you? It may be that I can sell it (shares). I thought I had invested so hard, let it lie for the time being and get rid of my temporary problem with the loan. Therefore, it would not be right to make this rule that entrepreneurs cannot take loans by pledging shares. Entrepreneurs will be discouraged to invest in it.
thank you
Thanks also to Jago News.
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