Competitive position of life insurance companies is Change in competitive is a common feature of a market economy. With the entrance of new insurance competitive structure of life insurance industry has change. Although the public sector life insurance company had been losing to the foreign life insurance company since 1974, but the loss of market share of net premium revenue has increased sharply after the entrance of new life insurance companies in 1986. On the other hand the market share of net premium revenue of the foreign life insurance company has been growing. But the rate of growth of its market share has been lower after the entrance of new been life insurance companies in the market. The local private insurance companies have been taking their position stronger day. It appears the business of existing life insurance he been shark after shaken after the entrance of new privilege private life insurance
Evolution of the expansion of life insurance business in Bangladesh
Public Sector insurance company:
The premium revenge of the public sector insurance apparently did not decline much in absolute amount. But in view of the fact that in an economy life insurance business grows over the time, the real loss of business may be the significant.
Foreign Life insurance Company:
ALICO, the only foreign life insurance company, has a strong marketing networker with good service record. This works as a competitive advantage for the company. It appears from the figure that ALICO did not lose business due to the entrance of local private life insurance companies in the market. Rather, it attained more than forecast revenues during the years 1986 thought 1993. But the growth rate of its first year’s premium revenue has declined to some extent after the entrance of the new life insurance companies.
Postal Life Insurance: Whereas commercial insurance companies have most of their organizational set up in the urban areas, postal life insurance has larges organizational set up both in urban and rural areas. It is generally expected that PLI’s procurement of business may be affected by in urban areas, But in rural areas. The growth of PLI’s was not very steady and as a result revenue forecasts were not expected to be precise competition lards to increases in efficiency shifting business from inefficient firms. Competition also compels forms to be innovation. As result. Sound competition after expands the marker.
The analysis indicates that the new entrants in the life insurance market did not yet expand the market; rather they appear to have sharing the same pie.
Operation Efficiency of life Insurance:
Sound and health competition always leads to insurance in efficiency. Competition forces firms to develop strategy to keep up their business. It has been expected that the entrance of new private life insurance companies will improve the operation efficiency of life insurance. There is several aspect of efficiency of Life Insurance Company. An insurance company may be cost efficient or technically efficient. Persistency rate Lapse ratio and policy surrender few of the criteria to analyze the efficiency like insurance company. Unfortunately, few aspects of operation efficiency like persistency rates and laps ratios could not be analyzed due to non availability of date. Homeland Insurance Company Ltd, Meghan Life insurance Co. Ltd registered in the 1996. This company has strata business in 1996.