A K M Monirul Hoque is passionate about developing the insurance industry in Bangladesh. He attended many seminars and symposiums all over the world and likes to study global models and approaches in order to implement new and innovative ideas in Bangladesh. Mr. Hoque loves travelling because he believes that interacting with people of diverse tradition, culture, and background helps understand the rapidly changing world from different perspectives.He has been re-elected as vice president: 2019-20 of Bangladesh Insurance Association (BIA).
In addition, Mr. Hoque enjoys playing golf and snooker regularly. He loves to watch various sports such as football, tennis, formula1 and so on, but cricket is his favorite sport. Mr. Hoque is an active and social person. He holds membership in various notable clubs and associations in the country. He is a life member of SAARC Chamber. Both Mr. & Mrs. Hoque are Life members of Baridhara and Gulshan Society.
Mr. Hoque and his wife Mrs. Naeema Hoque are blessed with two daughters. Their elder daughter, Ms. Salwa Hoque studies political theory and is currently a Ph.D. student and teaching assistant at New York University (NYU) in USA. She holds a Master’s Degree from Columbia University, which is an Ivy League institution. Salwa is a permanent member of Gulshan Club Limited and a Life Member of Baridhara Society. Younger daughter, Ms. Wasfia Hoque is currently a Chemistry major at the University of Washington (UW) in Seattle, USA.Additionally, she isa research assistant in the Marine Biology department at UW. Wasfia is academically trained in French and institutionally proficient in playing the piano.
In a half-an hour long session, this dynamic personality talked about his career, his company and about the insurance sector in general. Here is an excerpt of that interview for our readers.
When did you start your career? What was your first job?
I started my business career in 1982 when I established a partnership vocational training center, Swift Engineering and Technological Training Center (SETTC), to develop the skills of people in diverse fields such as driving, computer proficiency, tailoring along with shorthand, and so on. I founded this institution when I was just 20 years old, while pursuing a Bachelor of Commerce (B.COM) Degree under Dhaka University. I later obtained a Masters in Commerce Degree (M.COM) from the same university with a concentration in Management.
In 1984, I joined Nitol Motors Limited (NML) which was at that time the sole distributor of the distinguished Indian company called TATA Motors LTD (TML). I joined there as the Executive Director there. I was the Head of the Marketing of the NML vehicles and was directly involved in the sales and promotion of products for 21 years i.e. till 31st December 2005.
When did you found Nitol Insurance Company Limited (NICL)?
I established NICL in 1999. It is a non-life Public Limited Insurance Company. While I was with Nitol motors, I felt the need of establishing an insurance company as the local insurance companies that we worked with used to dillydally in settling the claims.
We were the first insurance company of the third generation to get the license. At the beginning—specifically in the first five years—we only confined our business within the vehicle business. Later we expanded to other areas.
What was the main motto of business of Nitol Insurance?
From day one, we are very serious about settling claims. We knew that if we settle claims of our clients in quickest possible time, then it will create goodwill about our company in the market because the biggest complaint about most of the insurance companies is that they don’t want to settle claim quickly and put their clients in peril.
In our company, I set an example of making direct phone calls to our clients. There are very few companies where clients have this access to the chairman of the insurance companies. I give this access to ensure transparency and accountability.
We have set a claim payment deadline of 30 days. Within 30 days, we try to pay the claims, and if possible, we try to pay within a week. There is even example that we paid our claim within a day. We believe faster claim payment actually does marketing for you as it spreads the words in the market.
What the current position of Nitol Insurance Company in the market?
In terms of gross premium, we are at number eight position among the non-life insurance companies in the country after paying taxes and VAT in last year. In terms of net premium, we are at number 5 position. We have a total of 20 branches across the country. Our manpower is around 180 which are not very high in number. But I would say they are all very well trained and well groomed. They know their job and they are highly motivated to perform well in the company.
We have a minimum 10 percent year-wise growth for the past one decade. In 2005, we did business worth of Tk 6.76 crore and in last year we did business worth of Tk 72 crore. Our current fixed deposit is over Tk 90 crore. The company currently own six places whose asset value is over Tk 100 crore. So our net asset is over Tk 200 crore.
So, I can say that our company is in a better position than many other companies. Our management cost is very lean and efficient. We are also doing well in credit rating. We have always conducted our credit rating with CRISIL because through credit rating we want to judge our performance.
The government has recently passed the budget for the financial year of 2019-20. What does the budget have for the insurance sector?
To be honest, there is nothing beneficial for the insurance sector in the budget. Our current finance minister ASM Mustafa Kamal is a person from the finance and accounting sector, He is a gold medalist chartered accountant and he knows the sector well. We considered him as a man who has profound knowledge of his job. But we know that he has his limitation when he has to consider the macro-economic outlook.
In the budget for FY 2019-20, there is a 15 percent VAT on re-insurance which is completely unnecessary. Besides, there is another 5 percent tax on the profit of life insurance which is also not necessary. From the Bangladesh Insurance Association (BIA), we have already met the NBR Chairman and conducted a press conference to voice our demands. We hope our demands will be met.
Do you believe the BIA has been performing its duty in voicing the demand of the insurance industry?
Of course. It’s a platform that gives all of the insurance company owners and stakeholders a strong base to place the demand and concerns of the industry to the policymakers. In the last few years, we have also been conducting some praiseworthy reforms in the industry through the association.
To be frank, standard conduct rules have long been absent in the insurance sector. Sometimes, insurance agents were engaged in fraud activities, some of them take premiums in cash from policy-holders without giving money receipts. As a consequence, lack of trust develops between policy-holders and insurance agents as well as insurers. From BIA, we tried to change those and tried to bring discipline in the insurance sector.
I have to specifically mention the name of Ahsanul Islam Titu, who was a young senior former Vice-President of BIA. He is now a lawmaker. He helped brining a lot of reforms.
You mentioned that current insurance penetration in the country is a very insignificant number which means there is a huge room for growth, what are the challenges to the growth of insurance?
Lack of awareness among people and the absence of an efficient distribution channel are two major challenges for our business. Another key challenge concerns policy. We need the help of the government and the regulators in order to reach out to people. There are some new policies that need to come into effect and some old ones that need to improve; for instance, e-signature, which would make the distribution a lot easier for us.
Moreover, Nitol Insurance can’t bring any major change in the field alone. For that to happen, the industry needs to march together. The industry dynamics need to improve.
Digitalization is bringing changes in the operations of financial entities. How is your companies adapting with the changes?
From the very beginning, our company has been doing all the things in digital manner. We make sure that each and every employee of our company has a computer to do all the works. All of our processes are being conducted through centralized software from the very beginning. Our software was developed in 2000 by a local software company named IBCX-Primax developed for me.
The IDRA is also trying to digitalize the sector. It is trying to have a central server like Bangladesh Bank. All of the day’s transaction reports of the insurance companies will be sent there like the way commercial banks send their day-closing report to Bangladesh Bank. This proposal is still in its infancy. It will require at least Tk 50 crore to do that. An expression of interest (EOI) has already been floated by the IDRA to hire consultant for the digitalization process. If it is being completed, then it will bring a large scale digitalization in the whole insurance sector.
What new product Nitol Insurance is bringing?
We are soon going to launch a product call ‘Nirapod’ for new and re-conditioned private car insurance. Bangladesh is one of the highest accidents prone- country. I believe this product will be revolutionary.