Delta Life Insurance

Company Limited
Bangladesh
Mosleh Uddin Ahmed FCA
Deputy Managing Director
Delta Life Insurance Company
Bangladesh
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Microfinance Program of Commercial

Life Insurance Companies in
Bangladesh
b 18 commercial life insurance companies
b 7 offers microfinance services -

microinsurance (life) and microcredit

loans to own policyholders
b Limited products
b Market penetration of insurance in the
country is less than 1.0%
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Delta Life Insurance Company Limited

b A private life insurance company

incorporated in 1984
b Two microinsurance products - Grameen
Bima (1988) and Gono Bima (1993) and
microcredit programs for policyholders
b Policies issued on group concept
b Door to door premium and loan collection
b Over 15,000 part-time employees - 80% are
women
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Microinsurance Program of 2 largest

Life Insurance Companies*
Delta Life
1

Premium Collection in US$ Million

No. of Policies in force

Life Fund in US $ Million

Number of Branches/Offices

National Life

10.2

2.3

571,119

102,121

16.1

3.1

1,615

411

* December 1999
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Microinsurance Program of Delta Life vs

All 7 Insurance Companies

Premium Collection in US$ Million

No. of Policies in force

Life Fund in US $ Million

Number of Branches/Offices

7 Insurance*
Companies
15.0

Delta Life
10.2

715,000

571,119

21.0

16.1

2,300

1,615

* Approximate figures
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Why was Delta Life successful ?

b Vision, dedication and leadership of CEO
b Commitment of staff at all level
b Core competence within the company
b Uncomplicated and easy to understand

products specially designed for the poor

b Simple procedures
b Large sales force and branch network
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Delta Lifes Constraints

b High ratio of lapsed policies
b High ratio of microcredit defaults
b High administrative costs
b Low return to policyholders
b High field level staff turnover
b Defalcation by field level staff
b Long processing time
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Measures Taken by Management

to Overcome Constraints
b High ratio of lapsed policies:

Unethical sale of insurance policy reduced by

staff training and strict disciplinary measures
Staff assessment based on premium collection
and persistency ratio
b High ratio of microcredit defaults:

Waiting period between policy and loan

Lending criteria based on premium collection
and loan recovery rate
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Measures Taken by Management

to Overcome Constraints (continued)
b High cost and low return:

GNB & GRB management merged

Reduction in number of offices & staff to
reduce overheads and increase profit margin
Seeking strategic alliance with other MFIs
b High field level staff turnover:

Staff retention through revised pay structure

More full-time field staff and less part- time

Measures Taken by Management

to Overcome Constraints (continued)
b Defalcation by field staff:

Deposit of premium by policyholders direct in

office or market collection points encouraged
Vigilance and monitoring through internal
audit and MIS
Stringent recruitment process
Decentralization of records
Computerization and MIS
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Measures Taken by Management

to Overcome Constraints (continued)
b Long processing time:

Decentralization
Computerisation
Training

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DELTA LIFES COMMITMENT TO THE

POOR
bProfit from microfinance

program will be distributed

back to the policyholders

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Jorina Bibi a Gono Bima Policyholder

b In 1998 when Jorina Bibi was widowed she

was 29 years of age with 3 young children

b She had no savings and her only asset was
a life insurance policy on her husbands life
b After her husbands death her in-laws threw
her and the children out of the house
b With help of friends and a local NGO she
moved into a home for destitute women
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Jorina Bibi a Gono Bima Policyholder

b With part of the money received from her

husbands life insurance, Jorina set up a

poultry business and built a place to live in
b She made sure that her children were able
to continue their schooling
b Her daughter plans to go to an university
and become a teacher
b Her sons wants to finish his college and
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join Jorina in her business

Jorina
Jorinas monthly earning
from the poultry business
was Taka 3,000 ($ 60)
initially. She ploughed
back some of this money
in the business for
expansion. Today she
earns Taka 5,000 ($ 100)
per month. With this she
supports herself and the
three children and saves
for the future.

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Jorina
Jorina now understands
the benefits of life
insurance. She is saving
for Rupas university
education and Kanus
college education
through two Gono Bima
policies. She soon plans
to take out another policy
for her youngest son
Sabir.
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Rupa
Rupa is now 16. She
attends a high school in
her village. During her
free time and holidays
she helps her mother in
the poultry business. She
is ambitious and plans to
go an university and
become a teacher in her
village. The Gono Bima
policy will finance her
university education.
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Kanu
Kanu is now 14. He also
goes to a local school and
helps his mother during
his free time. He wants to
finish his college and join
his mothers poultry
business. The Gono Bima
policy will finance his
college education.

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This could have been Jorinas

fate
This is Kulsum. Her
husband died last year.
She has no home, no job
and no savings. She is a
beggar on the streets of
Dhaka and sleeps on the
pavement with her son.
She earns around Taka 50
daily. She and her son eat
whatever food that they
can beg or buy. Do they
have a future?

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This could have been Rupas fate

This is Sakina. She is 13.
Her father died 6 months
ago. Her mother brought
her to Dhaka and
abandoned her. She
collects plastic bags from
the garbage bins for a
recycle merchant. She
earns around Taka 15
daily and sleeps under a
bus shelter nearby. Does
she have a future?
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This could have been Kanus fate

This is Mannan. He is 12.
Both his parents died 9
months ago. Mannan ran
away from his village
where he lived with his
uncle and ended up in
Dhaka. He works at a
building site and earns
Taka 20 daily. He sleeps at
the site. He will drift to
another place after this
building is complete.
Does he have a future?

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Kulsum, Sakina and Mannan

b Kulsum, Sakina and Mannan have a very

bleak future. Kulsum and Sakina are at a

risk of being lured by one of the many
women and child trafficking rings with a
promise of a job and end in prostitution.
Mannan will probably drift around for a few
years and out of desperation end up in
street crimes. All three of them could have
been saved by a microinsurance policy.
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