Background Bangladesh is highly vulnerable to tropical cyclones and floods1 due to its geographical

location and very low land elevation.2 Those affected by the floods are mostly the poorer segments of
society who have no or limited means to take protective measures and have very little capacity to cope
with the loss of assets and income.3 To address this, large resources are required for disaster
management, including mitigation, recovery, and preparedness.4 There is a growing need to expand the
insurance system in Bangladesh to protect its people from shocks. Social insurance programs in
Bangladesh, however, are limited to civil servants, and leave many informal workers unprotected from
catastrophic income shocks, such as loss of employment, health, or disability.5

Development of Microinsurance in Bangladesh

The insurance system in Bangladesh consists of 2 state-owned corporations, 43 private sector general
insurance companies, and 17 life insurance companies. The insurance sector has grown substantially and
has deepened remarkably with additional number of insurance companies in both general and life
insurance business. It is also notable that the insurance market has expanded and the volume of assets
has increased substantially.6 The impressive growth of the insurance industry in Bangladesh is due to
operations of private sector insurance companies.7 Despite the growth of the insurance industry in the
country, some problems exist. For instance, the presence of too many companies in a small market like
in Bangladesh has given rise to the unethical practices of some insurance companies, which retarded the
growth of the industry. Other problems that made the insurance system vulnerable are weak regulatory
system, inadequate capital base, high management expenses, and large number of weak insurers
competing with each other.8 Furthermore, the insurance policyholders concentrate on the upper- and
middle-income population, leaving the estimated 93% of the country’s 134 million population without
access to formal insurance service.9 There is also a need for professionally qualified personnel to
manage the insurance industry. Many large nongovernment organizations (NGOs) in Bangladesh have
implemented some microinsurance mechanisms to cover health care, disability, or death. But this
microinsurance has not yet made significant impact considering the great demand by the large
population. Some of the reasons include (i) an underdeveloped policy and regulatory framework
devoted to microinsurance, (ii) limited institutional capacity, and (iii) insufficient knowledge and
awareness on insurance among the poor population.

Micro-insurance is one of the formal risk management mechanisms to protect the mass community
from the effect of their potential financial risks. Micro-insurance product is specially designed for the
lower income people for ensuring their risk coverage in exchange of affordable premium. So any one can
enjoy insurance benefits under this mechanism who, generally, do not have access to the traditional
insurance due to higher premium.

Micro insurance plays a vital role in the economic development of any country. Bangladesh is now under
the process of graduating as developing country. So micro insurance can create a vital role to ensure
inclusive growth and support the livelihood of the vulnerable segment of the society and facilitate the
sustainable economic growth of this country.
Why Micro insurance?

Because their resources are so limited, poor people can experience great financial disruption when
unexpected events befall them. If a breadwinner is injured or falls ill, there is not only the loss of income
and labor, but the prospect that without cash in advance there will no treatments at all. If a
breadwinner dies, not only must funeral expenses be paid, but continued cash for basic needs and
education of the family is required. A poor person’s property may be limited to a few animals or crops
and modest shelter, but the destruction of any of these may be a great blow to the family’s economy.
Even small sums insured can ensure some protection and peace of mind (and dignity) for a poor person.

From the point of view of insures, however, small sums insured mean small premiums and low profit
margins. Thus micro insurance has to be well-administrated, cost efficient, and delivered on a large scale
if it is to benefit the poor, and those who provide the micro insurance.

Guardian Life Micro-insurance

Being the largest Micro Insurer in Bangladesh Guardian Life Insurance Ltd. is covering more than 10
million lives under different micro-insurance propositions. These micro insurance products are being
offered though partnership modality. The beneficiaries or members of the partner organization i.e. MFI,
Bank etc., can enjoy the benefits of offered products with affordable premium. With continuous
innovation, Guardian Life is planning to explore the partnership opportunities with different
organizations through tagging micro-insurance product with their product & services.

Features of Guardian Life Micro-insurance

 Simplified Product offered to the insured

 Economic Price considering the affordability of economic group

 Customized offering based on the demand of the insured

 Hassle free enrolment process

 Fastest claim settlement to ensure best support

 Win-win proposition for the partners

Current Offerings

 Credit Shield Micro-insurance

This policy has been designed for the micro credit holders of MFIs, Banks and the Non-Bank Financials
(NBFIs) for protecting them from the effect of their potential financial risks

Benefits
  Life Coverage: A fixed amount of funeral cost due to the death of loan holder or secondary
insured

 Credit Coverage: Waiver of outstanding loan due to the death of loan holder or secondary
insured

 Saving Shield Micro-insurance

This policy has been designed for the micro savings holders of MFIs, Banks and the Non-Bank Financials
(NBFIs) for protecting them from the effect of their potential financial risks

Benefits

 Life Coverage: The maturity value of savings scheme due to the death of savings holder.

Current Programs

 Guardian Brac Bima (GBB)

GLIL in partnership with BRAC tried to develop a proposition that could meet the needs of the
community. Promoting this scheme through a trusted intermediary had instant benefits; the initial take
up rate skyrocketed to 61% in 2016 and 76% in 2017 through voluntary participation. Partnership with
BRAC gave the scheme significant reach, the availability of this product increased from 20 branches in
2015 & 650 branches in 2016 under pilot phase to 2530 branches in 10 weeks. GLIL has worked in two
folds when it comes to the operations management and efficient claim processing, delivering on both
quantity and quality. GLIL also introduced BRAC Guardian Bima Web Portal to drive effectiveness and
efficiency in claim processing.

Benefits

 Life Coverage: A fixed amount of funeral cost due to the death of loan holder or secondary
insured

 Credit Coverage: Waiver of outstanding loan due to the death of loan holder or secondary
insured

GBB’s Achievements

 GLIL achieved “Innovative Insurance Product of the Year-2017” at Insurance Asia Awards 2017
for Guardian-Brac Bima Project (GBB).

 GBB has become the largest micro-insurance project in Bangladesh

 More than 10 million lives is being secured under this proposition

 Settled claims of BDT. 1896 million under this project

 Bank Asia Guardian Bima (BAG)

In 2019, Bank Asia & Guardian Life jointly initiated a credit shield product for the micro loan borrowers
under Agent Banking channel of Bank Asia. Through this initiatives a large number of untapped
community gets an opportunity to reside under the umbrella of insurance.

Benefits

 Life & Credit Coverage: Waiver of outstanding loan due to the death of loan holder

Impact of Guardian Life Micro-insurance

 Liability protection of the loan holders

 Credit protection of partners, i.e. MFI, Bank & Non-Bank Financials (NBFs)

 Asset protection of all stakes

 A secured financial ecosystem

 Secured socio-economy