The insurance industry can make a direct contribution to poverty reduction. Affordable microinsurance, crop protection schemes and health coverage can provide a basic safety net for groups that are usually left out of formal financial systems.
In a wide-ranging conversation at The Daily Observer’s National Dialogue, Md Kazim Uddin, Chief Executive Officer of National Life Insurance Company, argued that Bangladesh must treat insurance not as a peripheral financial product, but as a cornerstone of national resilience, poverty reduction and inclusive growth.
At a moment of profound political transition, Bangladesh stands before what many see as a decisive test of governance, economic discipline and institutional credibility under the leadership of Prime Minister Tarique Rahman.
Speaking with The Daily Observer, Kazim Uddin said the country’s present phase demands not only policy ambition, but a determined effort to rebuild public trust in the institutions that underpin economic stability.
“History often reserves its hardest trials for those destined to lead through turbulent times,” he said, placing Bangladesh’s present journey within a broader narrative of national transformation.
He welcomed the new administration’s early signs of people-centred governance, pointing to family support schemes, rural infrastructure development, canal re-excavation, employment generation programmes and subsidised food distribution for vulnerable groups. In his view, these measures reflect a welcome shift towards inclusion, “but sustainable progress will depend on whether financial institutions are reformed with equal seriousness”.
Poverty & Vulnerability
Kazim Uddin said the case for insurance reform is inseparable from Bangladesh’s poverty challenge. Citing the World Bank’s April 2025 projection, he noted that the national poverty rate was expected to rise from 20.5 per cent in 2024 to 22.9 per cent in 2025, while extreme poverty was projected to increase from 7.7 per cent to 9.3 per cent. That would leave an estimated 15.8 million people in extreme poverty and about 39 million below the national poverty line by the end of 2025, according to the same projection reported by Prothom Alo and based on World Bank estimates.
He also referred to the World Bank’s Bangladesh data platform, which shows that poverty and inequality remain persistent development concerns, even after years of progress in social indicators. “A large share of our population still lives one shock away from hardship,” he said. “An illness, a flood, a crop loss or the death of a breadwinner can push a family backwards overnight.”
That vulnerability, he argued, is precisely why insurance must become a national development priority rather than a luxury for the better-off.
Sector Below Potential Turning to the industry itself, the CEO said Bangladesh’s insurance sector remains far below its potential curve.
He pointed out that insurance penetration in Bangladesh is still below 1 per cent of GDP, while in more developed economies it typically ranges between 6 per cent and 10 per cent. In his view, this gap reflects not a lack of need, but a deep trust deficit, weak awareness and governance failures.
“In regional comparison, Bangladesh is still operating below its potential curve,” he said. “This is not due to lack of demand, but due to gaps in trust, awareness and regulatory depth.”
He added that the sector continues to lag behind neighbouring countries such as India, Sri Lanka and Pakistan in product diversification and integration with national development goals. In those markets, insurance is more deeply embedded in agriculture, health protection, pensions and disaster financing. Bangladesh, by contrast, remains overly dependent on traditional life insurance products with limited reach into the wider economy.
Insurance as Protection
Kazim Uddin stressed that insurance should be understood as economic infrastructure. In his words, it helps households withstand shocks, mobilises long-term domestic savings and reduces pressure on the state during emergencies.
“In developed economies, insurance is treated as a pillar of stability,” he said. “Bangladesh must move in the same direction �" towards structured, and where necessary, mandatory coverage in critical sectors such as health, agriculture, transport and industry.”
He argued that such a shift would not amount to regulatory overreach, but rather a practical step towards resilience. By cushioning families against sudden losses, insurance can prevent temporary crises from becoming long-term poverty traps.
Marginalised Communities
A major concern he highlighted was the exclusion of marginalised communities from formal protection. Farmers, informal workers, women-headed households, low-income families, persons with disabilities and climate-vulnerable populations remain largely outside structured insurance systems.
“Growth that does not include protection for the most vulnerable remains inherently fragile,” he warned. “If these communities remain uninsured, inclusive growth will remain incomplete.”
He said this is where the insurance industry can make a direct contribution to poverty reduction. Affordable microinsurance, crop protection schemes and health coverage, he noted, can provide a basic safety net for groups that are usually left out of formal financial systems.
Reform Agenda
The CEO outlined a three-point reform agenda for the industry. First, he called for the development of affordable microinsurance and index-based products tailored to low-income and marginalised groups, with delivery through digital platforms and trusted local networks.
Second, he urged stronger integration between insurance, government welfare programmes and NGO initiatives so that risk protection becomes part of social safety nets. Third, he called for major investment in financial literacy and claims transparency.
“Insurance will only grow where trust exists,” he said. “And trust is built through clarity, fairness and consistency.”
He also urged faster claims settlement, simplified policy language and community engagement to restore public confidence. According to him, delayed payments and governance lapses by a small number of firms have damaged the reputation of the wider sector.
Public-Private Alignment
Kazim Uddin called for closer collaboration between government, regulators and the private sector, including data-sharing frameworks and co-financed protection schemes for vulnerable groups. He said National Life Insurance is ready to pilot initiatives in underserved districts, subsidise premiums for high-risk groups where necessary, and contribute operational experience to policy design.
He also acknowledged the sector’s internal constraints, including shortages of skilled professionals in underwriting and actuarial science, weak technology adoption, cybersecurity risks and limited public awareness. These, he said, are not isolated operational issues but structural risks to the industry’s long-term sustainability.
Shared National Duty
Concluding his remarks, Kazim Uddin said poverty reduction and inequality alleviation cannot depend on government action alone.
“Reducing poverty and inequality is a shared national responsibility,” he said. “The insurance sector can play a decisive role by cushioning shocks, mobilising savings and protecting livelihoods.”
He added that with stronger regulation, better governance and wider inclusion, Bangladesh can transform insurance from a weak and mistrusted sector into a central engine of resilience and equitable growth.
“The opportunity is clear,” he said. “The challenge is discipline. And the responsibility is collective.”
