Challenges of Marketing Life Insurance in Bangladesh

CHALLENGES OF LIFE INSURANCE
MARKETING IN BANGLADESH:
EXECUTIVES PERSPECTIVE
CHALLENGES OF LIFE INSURANCE MARKETING IN BANGLADESH:

EXECUTIVES PERSPECTIVE
SUBMITTED TO
Dr. Muhammad Ziaulhaq Mamun
Professor
Institute of Business Administration
University of Dhaka
SUBMITTED BY
Group 1
Sarwath Hafiz Mumu
Shadid Rahman
Gazi Md. Junaid Hossein
Rubyena Shabnoom Huq
Imran Hossain
Abreshmee Adeeba Haque
Ahmed Tashfiq Rafsan
Moyukh Mahtab
(RH-70)
(ZR-83)
(ZR-92)
(RH-93)
(ZR-95)
(RH-106)
(ZR-107)
(ZR-126)
Section-B
BBA Batch 21
Institute of Business Administration,
University Of Dhaka
13th June, 2015
ii
13 June 2015
Dr. Muhammad Ziaulhaq Mamun

Professor
Institute of Business Administration
University of Dhaka
Sir:
Re : Submission of research paper for the Research Methodology course
We herewith present our term paper titled CHALLENGES OF LIFE INSURANCE
MARKETING IN BANGLADESH: EXECUTIVES PERSPECTIVE, authorised by you
as a requirement for this course. In this report, we have tried to look at the
challenges faced in the marketing in this sector. The report has been prepared under your
supervision and thereby, no part of it can or will be revealed to any external body unless
and until you permit otherwise. We certify to you that the paper has never been and neither
will it ever be, reproduced for any other course.
We are thankful to you for your assistance throughout the time during which we worked
on the paper and sincerely hope that we would live up to your expectations regarding the
quality of our work.
If there is any need of any form of clarification, you can contact any of us.
Sincerely
Sarwath Hafiz Mumu

(RH-70)
Shadid Rahhman
(ZR-83)
Gazi Md. Junaid Hossein

(ZR-92)
Rubyena Shabnoom Huq

(RH-93)
Imran Hossain
(ZR-95)
Abreshmee Adeeba Haque

(RH-106)
Ahmed Tashfiq Rafsan

(ZR-107)
Moyukh Mahtab
(ZR-126)
iii
Table of Contents
Title Fly ...................................................................................................................................... i
Title Page ................................................................................................................................... ii
Letter of Transmittal .................................................................................................................iii
EXECUTIVE SUMMARY ...................................................................................................... vi
1.0 INTRODUCTION ...1
1.1 Background ...................................................................................................................... 1
1.1.1 Insurance industry in Bangladesh .............................................................................. 1
1.1.2 Life insurance ............................................................................................................ 3
1.1.3 Government influence ............................................................................................... 4
1.2 Problems ........................................................................................................................... 4
1.3 Literature Review ............................................................................................................. 5
1.4 Objectives ....................................................................................................................... 10
1.4.1 Broad objectives ...................................................................................................... 10
1.4.2 Specific objectives ................................................................................................... 10
1.5 Hypothesis ...................................................................................................................... 10
1.6 Rationale......................................................................................................................... 12
1.7 Scopes and Limitations .................................................................................................. 12
2.0 METHODOLOGY ............................................................................................................ 13
2.1 Data Collection............................................................................................................... 13
2.1.1 Primary .................................................................................................................... 13
2.1.2 Secondary ................................................................................................................ 13
2.1.3 Distribution of sample respondents ......................................................................... 13
2.2 Sample Size .................................................................................................................... 14
2.3 Sample Frame ................................................................................................................. 14
2.4 Questionnaire Development ........................................................................................... 14
2.5 Pre-testing....................................................................................................................... 15
2.6 Validity ........................................................................................................................... 15
2.7 Reliability ....................................................................................................................... 15
2.8 Data Analysis ................................................................................................................. 16
2.9 Budget ............................................................................................................................ 16
3.0 DATA ANALYSIS ............................................................................................................ 17
3.1 Individual Variable Analysis.......................................................................................... 17
3.1.1 Top 10 variables ...................................................................................................... 17
3.1.2 Bottom 10 variables ................................................................................................. 18
3.2 Hypothesis Testing ......................................................................................................... 18
3.3 Subsection Analysis ....................................................................................................... 24
3.3.1 Group A: Variables affecting marketing ................................................................. 24
3.3.2 Group B: Marketing channels................................................................................. 24
3.3.3 Group C: Variables affecting scope........................................................................ 25
3.3.4 Group D: Other variables ....................................................................................... 26
3.4 Correlation ..................................................................................................................... 27
3.5 Factor Analysis............................................................................................................... 28
iv
3.5.1 Factor: consumer focus........................................................................................................ 28

3.5.2 Factor: socioeconomic factors and product delivery........................................................... 29
3.5.3 Factor: perceptions about insurance ................................................................................... 29
3.5.4 Factor: promotion and communication ............................................................................... 30
3.5.5 Factor: standard of living ..................................................................................................... 30
3.5.6 Factor: legal restriction ........................................................................................................ 30
3.5.7 Factor: political instability .................................................................................................... 30
3.5.8 Factor: people ...................................................................................................................... 31
3.5.9 Factor: product .................................................................................................................... 31
4.0 INTERVIEW FINDINGS ..................................................................................................................... 32
5.0 RECOMMENDATIONS...................................................................................................................... 33
6.0 CONCLUSIONS ................................................................................................................................. 34
APPENDED PARTS ................................................................................................................................. 35
Appendix 1: Questionnaire ............................................................................................................... 35
Appendix 2: Co-ordination Schema .................................................................................................. 38
Appendix 3: Data Analysis and Hypothesis Testing: ......................................................................... 39
Appendix 4: Factor Analysis .............................................................................................................. 45
Appendix 5: List of Life Insurance Companies in Bangladesh ........................................................... 47
List of life insurance companies in the public sector .................................................................... 47
List of life insurance companies in the private sector .................................................................. 47
References ............................................................................................................................................ 48
EXECUTIVE SUMMARY
In a developing country like Bangladesh, the people are affected by a double burden of
disease and scarcity of resources. Unprecedented population growth and the emergence of
new and chronic diseases have placed extra demands on health services. Despite massive
efforts to combat such problems in Bangladesh the resource base is insufficient to meet
neither future needs nor planned services. With a large percentage of health expenditure
coming out-of-pocket of the household, a strong insurance industry is essential in ensuring
the security and welfare of the general population. Insurance industry in Bangladesh has
shown rapid growth in terms of institutional set up over the last few decades.
The meagre coverage rate of 0.5% in Bangladesh stands in stark contrast to countries like the
United States of America where the coverage rate is close to 40% as of 2013.
With the aim of expanding and improving the industry a number of companies have started
business. Due to either a lack of funding or of foresight they have undertaken only minimal
marketing activities. This study looks at looks at the perspectives of executives in life
insurance companies, with regards to the various problems and prospects that the industry
faces. The paper looks at the various problems that the industry faces with the aim of finding
which are the most glaring. Among the problems looked at include the skills of the field
agents, the level of education of people in the sector and the perception of insurance among
the general public. Indeed, insurance is perceived negatively by most of the population due to
religious or ethical reasons. Being an untapped market, there is a huge potential for growth
and the factors looked at include the increase in purchasing power, improvement of level of
education, and change in the perception towards life insurance.
Also looked at is the annual expenditure of companies on marketing and promotion activities
with the aim of identifying possible gaps in funding. We formulated hypotheses based on our
initial understanding and literature review. Data was collected using a standardised
questionnaire having answers marked on a Likert Scale. Statistical Methods were later used
to analyse the data to come to valid conclusions.
The initial hypotheses were tested at the 5% level to gain an understanding of the industry.
Finally, opinions and views collected during the course of these interviews have also been
presented at the end of the paper. These views provide deep insight into the problems faced
by the industry. This paper endeavours provide insight into the state of the industry and
provide recommendations that can take the industry to its full potential.
vi
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1.0 INTRODUCTION
Insurance is a great source of development of national savings. This is particularly true for
life insurance. It serves national purpose by channelizing the savings of common people,
accumulating them and making them available for proper investment in national development
activities. The cycle of benevolent function of life insurance is completed when these people
begin to save through life insurance and plough back their savings for further creative
purposes. Further, life insurance counter-acts inflation and plays a vital role in stabilising and
building national economy. Life insurance can also play a greater role in an economy like
Bangladesh where capital is shy, rate of savings is very low i.e. investment opportunities are
lacking, inflationary situation is prevailing, and provisions of social security of the people are
absent.
1.1 Background
1.1.1 Insurance industry in Bangladesh
A well-planned, well-organised, efficient and viable insurance industry is a necessary
condition for the economic and financial infrastructural development of a country. Insurance
industry in Bangladesh has shown rapid growth in terms of institutional set up over the last
few decades. But it is often said that the sector is over institutionalised and suffering from
unethical business practices, unhealthy and un-even spheres of competition. The private
sector general insurance companies annual growth rate is better, but it is not more than 10
percent on an average. The general insurance industry plays a strong role in financial markets
as providers of long-term capital side by side with other participating institutions. The
solvency and continuous growth of insurance companies depend on their performance.
The two distinct forms of insurance companies available in our country are the (i) general
insurance companies and the (ii) life insurance companies. The companies are usually
classified according to the market segment they are serving. The general insurance companies
serve mainly corporate clients and provide insurance for properties against fire, automobile
accidents, freight damage etc. Life insurance companies provide life insurance as their
primary service with health insurance schemes being a part of life insurance.
Until 1985 the major players in the industry were the two stateowned insurance
corporations: i) Sadharan Bima Corporation (SBC) for general insurance and ii) Jiban Bima
Corporation (JBC) for life insurance. Privatisation of insurance started in the decade of
1980s and the process of denationalisation was initiated in Bangladesh during the same
decade. As per the privatisation policy, the Government of Bangladesh allowed the private
sector to conduct business in all areas of insurance for the first time in 1984. As a result, 45
enterprises were established up to January 2001 to operate in the private sector general
insurance business in the country. Of the 45 Private sector general insurance companies, 16
were established in 1985-86. 8 were in 1996 and the rest 21 in 1999-2001. As of now, there
are a total of 77 insurance companies operating in Bangladesh of which 75 are private
insurance companies and the remaining 2 are public insurance companies (List of Life
Insurance Companies in Bangladesh, Appendix 5). Among these 1 multinational private, 1
public enterprise and 29 local insurance companies provide life insurance.
The current penetration rate of insurance in our country is only around 1.0% which is far
below the standard as compared to other South Asian nations. In developed countries,
contribution of insurance in their GDP has reached a substantial percentage. Our current
premium penetration rate is 0.9 percent of the GPD where 0.7 percent is in life and 0.2
Page |2
percent in non-life business. Only four out of 1000 individuals have life insurance protection.
This low penetration rate shows the presence of immense potential for future expansion.
The future expansion of the insurance market and increase in the rate of penetration lies in
tapping the hitherto untapped segments of the market which has remained to be neglected so
ar. Health insurance has yet to take off in the way it has in our neighbouring countries and so
is the case of micro insurance. Conducing insurance business in the true spirit of
professionalism, bringing in modern management and sales techniques and new product
developments are keys to the future growth and progress of the insurance industry.
The growth of the insurance premium income in 2012 was 5.59 percent. The combined
premium income underwritten by public and private sectors stood at Tk 86,651 million in
2012. Though the GDP growth rate in Bangladesh has been around 6 percent for the last few
years, the insurance industry growth have been double digit during the span of 2007 to 2010.
This however, slowed down after 2010. The comparative premium position during the last
seven years is as follows:
Table 1: Comparative Premium Position from 2007 to 2012
The share of public and private sectors in from 2010 to 2012 is as follows:
Table 2: Share of Public and Private Sectors from 2010 to 2012
Page |3
The rate of insurance penetration (Premium as percentage of GDP) remains stagnant at about
1% as seen from the figures from the following table:
Table 3: Rate of Insurance Penetration
1.1.2 Life insurance

Life insurance is a protection against loss of income that would result if the insured passes
away. The beneficiary named receives the proceeds and is therefore protected from the
financial impact of the death of the insured. The goal of life insurance is to provide a measure
of financial security for ones family after they die. Thus before purchasing life insurance,
one must consider their financial situation and the standard of living they want to maintain
for their dependents. Funeral costs and final medical bills, future or on-going expenses of the
family members left behind such as day care, mortgage payments and college etc. are taken
care of through life insurance. Life insurance policies need to be re-evaluated after major life
event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such
as a house or business.
Table 4: The Premium Income from Life Insurance
C
i
Page |4
Life insurance in Bangladesh is almost entirely provided by private insurance companies.

Table 4 in the previous page shows the premium income from life insurance companies since
2001.
1.1.3 Government influence
The history of the insurance sector in Bangladesh dates back to the British Era. It gained
momentum during 1947-1971. Initially, this sector was regulated by the Insurance Act, 1938.
After Independence, it operated under the Insurance Act, 1973. The sector has been growing
constantly since then and to accommodate this, there have been many amendments in
Insurance Law since 1984. However, trade and commerce has grown and evolved to such an
extent that the environment of today is significantly different from what it was in 1973. To
make sure the laws regarding insurance are relevant enough, the Insurance Act 2010 was
enacted, which updated the provisions of the previous act.
One of the stipulations of the new act was that there needs to be supervised by a strong
regulatory authority. The New Insurance Development and Authority Act, 2010, paved the
way for such an organisation. The Insurance Development and Regulatory Authority (IDRA)
started its journey on January 26, 2011 as this new regulatory body. IDRA has many
functions and responsibilities. Some of them are: promoting development of training centres
connected with the insurance; registration and certification of insurers, re-insurers,
intermediaries and renewal, modification, withdrawal, suspension or cancellation of such
registration; laying down the code of conduct and guidelines for training and instruction
manuals for intermediaries, insurance and reinsurance intermediaries and agents; establishing
and regulating funds for protection of policyholders; making regulations for the insurance
industry and delegation of powers with prior approval from the government; and so on.
There are some problems insurance companies say they face because of IDRAs rules and
regulations. Firstly, it is mandatory for field agents to receive training and licensing by
IDRA. This makes it more difficult for insurance companies to recruit field agents.
The basic salary field agents can receive is fixed by the government, so a higher salary cannot
be offered as an incentive when recruiting agents. The commission agents receive per policy
sold has also been reduced from 40% to a maximum of 35%. Tax of 5% is also charged on
agents commissions. It must also be noted that no additional benefits are offered to the
agents.
Furthermore, growth of the insurance sector is hampered by the fact that the government does
not advertise this sector. Other countries such as India do so, and it is very effective in
generating growth of the sector and increasing the overall market demand. Lastly, IDRA does
not allow a companys marketing budget to be more than around 5% of the premium. This is
another factor which hinders the growth the insurance industry could potentially achieve.
1.2 Problems
In recent years, due to government initiatives and private sector drives, the penetration rate of
life insurance has made dramatic leaps. But the numbers are still very low. According to M
Shefaque Ahmed, the Chairman of the Insurance Development and Regulatory Authority or
IDRA in his article The State of Insurance Industry in Bangladesh mentions that the life
insurance penetration ratio (insurance premium as percent of gross domestic product or
GDP), which measures the level of insurance activity relative to the size of the economy in
Bangladesh, was 0.8 per cent in 2010. Average insurance density (per capita premium
income) in dollar terms for life insurance in Bangladesh was US Dollar 5.5 only. The low
Page |5
penetration rate of the life insurance shows that there is a great potential for further growth of
the life insurance sector in Bangladesh.
There is a significant information gap in society about the benefits of life insurance. Even
those who have the information are not prompted to action. There might be several factors at
play here, including the literacy rate of the country; a lack of foresight; misconception; trust
issues and fear of scams. Besides, the sector has been largely ignored, and promotional and
marketing efforts have been unable to solve the problems.
1.3 Literature Review
Insurance, which is called an unsought product in marketing, is defined as a co-operative
device to spread the loss caused by a particular risk and life insurance is explained as the
contract, whereby the insurer in consideration of a premium undertakes to pay a certain sum
of money either on the death of the insured or on the expiry of a fixed period. On the other
hand, marketing is managing profitable relationship with customers.
The presence of the insurance sector in the Indian Subcontinent can be traced back to the
nineteenth century, when it was introduced in the European model. Since then it has gone
through many reforms. For a brief overview, the following passage from Insurance Business
and Khuda Bukshs contribution by M. Obaidur Rahim is illuminating
The life insurance business began in East Pakistan with the relocation of the EFU personnel
along with insurance personnel from few other companies in India. Most of the insurance
companies moved to East Pakistan were foreign origin except three national companies,
Eastern Federal, Muslim Insurance and Habib Insurance Company. After the Partition of
Bengal in 1947, seven Bengali insurance personnel moved to East Pakistan from India and
took charge of the insurance business of various companies
At present, the sector is governed and overseen by the Insurance Development and
Regulatory Authority, Bangladesh (IDRA). The IDRA was brought into effect in 2010, along
with the Insurance Act which replaced the act of 1938. As per IDRA regulation, a company
cannot deal in both general and life insurance. At present, there are 30 private and 1
government owned life insurance companies operating in Bangladesh.
Jiban Bima Corporation is only the state owned life insurance company operation in
Bangladesh. According to IDRA data, the existing equity capital is, therefore, very
inadequate to ensure long-term solvency of the corporation. Since the corporation is a stateowned entity (SoE), there is no major concern for the protection of the interests of the
policyholders.
Average growth of premium income during the last five years was much lower than the
growth of nominal GDP. First year premium income recorded declined in both 2009 and
2010. There was no growth in renewal premium income during 2010. Average growth of life
fund during the last five years was much below the growth recorded by the life insurance
industry in Bangladesh as a whole. Of the thirty private life insurers, none has so far been
able to raise the paid up capital to Tk 300 million (30.0 crore) as per provisions of section
21(3) and schedule of the Insurance Act, 2010. The existing capital base of the private
insurers, except a very few companies, is very low compared to minimum capital requirement
as per the Insurance Act, 2010.
Delta Life has a paid up capital of Tk 30 million (3.0 crore), the lowest in the life insurance
sector, but has the highest business operation among the domestic life insurers in terms of the
Page |6
size of the life fund. The size of Metro-Life ALICO is the biggest in the country, but it is
operating in Bangladesh without any capital. The low capital base of all life insurers is
worrisome for the IDRA.
Average growth of premium income during the last five years was 24.56 per cent, much
higher than the growth of nominal GDP. Life fund of private life insurance companies, taken
together, stood at Tk 134.9268 billion (13492.68 crore), on a provisional basis, at the end of
2010 compared to Tk 105.154 billion (10515.4 crore) at the end of 2009, showing a growth
of 28.32 per cent.
There are no reliable data on lapses of insurance policies. However, an examination of data
on insurance business of some of the life insurers reveals that lapse ratios of insurance
policies, particularly micro insurance policies, are quite high. Surrender of policies is also
quite common. The number of paid-up policies as percentage of total number of issued
policies is also very high.
In terms of market penetration, the historical trend has been discouraging. While in the past,
this may have been due to financial exclusion, despite the rapid rise of financial inclusion of
the population, the sector has seen relatively low development.
The penetration of the market for both general and life insurance sector is low for Bangladesh
compared to other countries in South Asia. According to 2010 ADB statistics, penetration in
Bangladesh remained at 0.8 per cent, while it is 4.1 percent in India and 1.2 percent in Sri
Lanka. The average insurance density (per capita premium income) in dollar terms for life
insurance in Bangladesh was US Dollar 5.5 only.
The factors which we think are related to this low penetration are the general image of life
insurance itself and the marketing challenges faced by life insurance companies. Research on
the marketing aspect of the insurance sector in Bangladesh is scarce, with only a paper titled
Life Insurance Marketing in Bangladesh by Reza and Iqbal shedding some light on the issue.
Other paper covering issues on the state of the sector shows that it has never been market
oriented. Some of the issues we identified as barriers to further market penetration include the
image of the sector in the public eye; lack of awareness and information; inefficient or
incapable sales personnel; sales focused rather than market focused companies and, actual
and perceived dishonesty of the personnel.
M Shefaque Ahmed, Chairman of Insurance Development and Regulatory Authority (IDRA),
in an interview with the Financial Times mentioned, "Image is very important to increase the
penetration in the country," while maintaining that the potential to boost the sector here is
enormous.
The research done on the marketing of life insurance in Bangladesh by Reza and Iqbal came
to the conclusion that insurance companies are not marketing oriented and they are also void
of marketing research. The study looked into both the direct and indirect channels of life
insurance marketing. The reasons identified by Reza and Iqbal for the low penetration of life
insurance were: low per capita income, poor knowledge of agents, illiteracy of prospects
(target customers), religious superstition, low awareness of prospects, low savings of target
market, lack of continuity, lack of reminder, negligence of policy holders, poor services to
policy holders, low return to the consumers, and lack of reliability.
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They identified a marketing offer as consisting of a number of product levels which may
include risk coverage against a particular financial loss, marketing activities of formulating
the insurance contract and designing the insurance policy, the settlement of the claim if the
loss occurred, fulfilling the investment need of the customer as it provides a certain benefit
against the insured amount of the policyholder, providing various financial facilities to the
customers such as getting tax exemption, acting as a guarantor and so on.
Identifying life insurance as a service, they looked at the marketing of policy in terms of the
characteristics of services which are intangibility, inseparability, variability and perish ability.
It is seen that unlike other services, there is no immediate utility of life insurance. Thus the
need for awareness and marketing of the service is crucial, since otherwise, people are not
motivated to buy policy.
The paper reads, the function of informing, educating, motivating, persuading, advising and
providing other services prior to, at the time of and after the issuance of the insurance
documents, make the purchase of insurance services dissimilar from purchasing other
products and from even other services [Rahman and Khondkar, 2000].
Reza and Iqbal also identified five levels of the service which need to be marketed. At the
first level, the core benefit of life insurance services are getting risk coverage against a
particular financial loss occurred that involves the marketing activity of service designing. At
the second level, the basic service is a written life insurance contracts in the form of a life
insurance policy to protect the particular risk, which provides the legal framework of the
contract. It involves the marketing activities of formulating the insurance contract and
designing the insurance policy. At the third level, the expected service is the settlement of the
claim if the loss occurred. At the fourth level, the augmented service fulfils the investment
need of the customer as it provides a certain benefit against the insured amount of the
policyholder. In addition to this, augmented services may include advice, personalised
service, flexibility of terms and conditions, auxiliary and additional services and automatic
renewal of the policy and so on. Finally at the fifth level, the potential services may include
providing various financial facilities to the customers such as getting tax exemption, acting as
a guarantor etc.
Life insurance is marketed on two levels through agents and directly via the company. The
following table shows the various middlemen in the marketing of life insurance and their
functions:
Table 5: Premium Income from Life Insurance Companies
The paper also reveals some other characteristics of the market conditions in Bangladesh. In
terms of competition, due to government regulations, Jiban Bima Corporation has a
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monopoly as they are solely entitled to sell policy in government organisations, without any
form of competition from the private sector. This position has made Jiban Bima complacent
with its functioning and they have been reluctant to cope with modern marketing practices.
Private companies on the other hand have been in general found to be lacking in
understanding of marketing concept. These companies have been largely product oriented
and their approach has not been backed by any credible market research or marketing plan.
They have solely relied on the sales approach to attract customers.
Internal factors posing challenged in the marketing of life insurance also include the
education level of those selling policy in rural areas, practices by the company, lack of new
products, lack of training, and lack of advertisement and information. The public image,
which has been largely unfavourable, is also a bottleneck towards a proper development of
the industry.
Another factor we looked into to gauge the challenges of life insurance marketing in
Bangladesh is the current perceptions of customers towards insurance companies, specifically
life insurance companies. The research done by Chowdhury, Rahman and Afza on the subject
provided some insight.
According to the research the level and depth of marketing practiced by the companies in
Bangladesh vary and is not consistent. There remains a broad distinction in the marketing
done by the public and the private sector.
The survey results from the research shows that respondents tend to prefer foreign private
insurance companies the most. This is followed by government insurance companies and
lastly the local private companies. This is exemplified by the data that the private insurance
companies (local + foreign) are dominating (68%) compared to government owned (32%)
one in the choice of clients due to the small coverage (few branches) and less attractive policy
packages offered by the government owned insurance companies.
The factors influencing the purchase of insurance policies were found to be varied. Survey
results yielded the following data:
Table 6: Factors Influencing Purchase of Insurance Policies
Reasons of Choice
Rference by Family/friends
Regulation of the Government
Reputation/reliability
Low Service/ Processing Costs
Influence of the Salespeople
No other options
High return on investment
Reference by workplace
Political and Legal Situations
Miscellaneous
Frequency
206
87
249
50
102
12
112
56
30
40
Percentage
49.5
20.9
59.9
12.0
24.5
2.9
26.9
13.5
7.2
3.4
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This shows that image and perception play a significant role when it comes to choosing
which company to buy policy from. Word of mouth has been an important factor along with
influence of sales people and reputation. All of these factors are directly or indirectly
influenced by marketing. The recommendations of the paper came to the conclusion that the
industry needs to make insurance services more tangible to alter market perceptions.
The sources of information for people about insurance are largely dominated by family and
friend, a staggering 39 percent. This was followed by sales people, around 30, and then by
advertisement, about 31. The respondents also said that the perception of policy sales people
is irritating.
The reasons identified for the lack of popularity of insurance were:
Lack of trust
Low income
Unattractive offerings
Lack of information
Lack of market research
Among these, lack of market research accounted for 22 percent of the total.
The literature on the subject pointed towards to things one, that the perception of people
towards life insurance is either ambivalent or negative, and two, that the marketing efforts
from the part of the companies has been unsatisfactory.
The perception came into being and is sustained by the lack of information regarding the
products, the inefficiency and lack of response to market needs. The companies have relied
on a purely sales approach to gain customers. Training of the sales people has been found to
be inadequate. The companies themselves lack a proper marketing plan and market research
to gauge customer needs and expectations has been largely absent. Government regulations
have figured little among the factors, but the monopoly provided by IDRA to Jiban Bima has
contributed to its complacency with its market share and thus, in their efforts at marketing.
Our initial assumption from the literature review can be summed up as the market for life
insurance is potentially large. The major challenges and constraints towards further
penetration of insurance sales are mainly, lack of proper marketing techniques, negative
perception of the industry itself and a lack of trust, and a lack of training and the level of
education of insurance sales people.
P a g e | 10
1.4 Objectives
This research aims to identify, analyse and compare the marketing strategies used by life
insurance companies in Bangladesh. It will pinpoint the challenges faced by the companies in
a country such as ours, where life insurance is looked at as something optional, rather than
necessary. Furthermore, it will delve into the scope of marketing life insurance in Bangladesh
and the various aspects which could be exploited to increase subscription of life insurance in
Bangladesh.
1.4.1 Broad objectives
The broad objective of this research is to identify the problems and prospects faced by
marketing managers in the life insurance industry in Bangladesh.
1.4.2 Specific objectives
The broad objective can be separated into the following three specific objectives:
i) Identify and evaluate the marketing plans used in different life insurance companies in
Bangladesh
ii) Investigate the constraints faced by the marketing managers and the extent to which
they affect marketing effectiveness
iii) Determine the scopes which marketing managers can exploit in order to increase the
policy subscriptions of life insurance
1.5 Hypothesis
Based on the Co-ordination Schema, 32 hypotheses were devised. They can be divided
according to our specific objectives.
i) Identify and evaluate the marketing plans used in different life insurance
companies in Bangladesh.
1. Executives of life insurance companies believe that product is important for life
insurance marketing.
2. Executives of life insurance companies believe that policy pricing is vital while
marketing life insurance.
3. Executives of life insurance companies believe that promotional activities play a
big role in reaching out to the target market.
4. Executives of life insurance companies believe that physical distribution of
policies is an important factor.
5. Executives of life insurance companies believe that providing physical evidence
for the service that is insurance is important in order to stay competitive in the
market.
6. Executives of life insurance companies believe that the process of service delivery
plays an essential role.
7. Executives of life insurance companies believe that stakeholders have an effect on
the marketing of life insurance policies.
8. Executives of life insurance companies believe that it is necessary for insurance
companies to carry out consumer research in order to serve the market better.
9. Executives of life insurance companies believe that value offerings of a particular
product or package must be chosen to be most appealing for a customer.
10. Executives of life insurance companies believe that promotion frequency has an
effect on the level of sales of policies.
P a g e | 11
11. Executives of life insurance companies believe that the promotion message used
affects the response from customers.
12. Executives of life insurance companies believe that the choice of promotion media
will affect the effectiveness of insurance marketing campaign.
13. Executives of life insurance companies believe that TV is an effective marketing
channel for life insurance marketing.
14. Executives of life insurance companies believe that print media is an effective
medium for life insurance marketing.
15. Executives of life insurance companies believe that digital media can play an
important role in augmenting sales.
16. Executives of life insurance companies believe that life insurance can be marketed
successfully through the radio.
17. Executives of life insurance companies believe that Business-to-Business
relationships are an important source of clients.
18. Executives of life insurance companies believe that Business-to-Consumer
communication is important in acquiring new customers for their companies.
ii) Investigate the constraints faced by the marketing managers and the extent to
which they affect marketing effectiveness.
19. Executives of life insurance companies believe that legal restrictions are a strong
limiting factor in the market potential that can be reached.
20. Executives of life insurance companies believe that negative consumer mind-set
affects the sales of insurance policies.
21. Executives of life insurance companies believe that the nature of the product is a
limiting factor in the sales of policies.
22. Executives of life insurance companies believe that budget constraints are a
significant obstacle to the implementation of marketing activities.
23. Executives of life insurance companies believe that instability in the political
environment creates significant problems for carrying out marketing activities.
24. Executives of life insurance companies believe that level of competition in the
industry affects the scope of the industry.
25. Executives of life insurance companies believe that the socioeconomic
environment of the country is a barrier towards the marketing of life insurance
policies.
26. Executives of life insurance companies believe that people have a negative
perception about life insurance.
iii) Determine the scopes which marketing managers can exploit in order to increase
the policy subscriptions of life insurance.
27. Executives of life insurance companies believe that improvements in general
standard of living resulting from economic growth in Bangladesh can widen the
target audience for life insurance.
28. Executives of life insurance companies believe that rise in digital penetration will
aid life insurance marketing promotions in the future.
29. Executives of life insurance companies believe that increase in education level of
general population.
30. Executives of life insurance companies believe that more specified and targeted
Business-to-Business communications will aid life insurance marketing.
P a g e | 12
31. Executives of life insurance companies believe that innovation is an important

factor when marketing your life insurance policies.
32. Executives of life insurance companies believe that there is scope for diversifying
into new policies which can be offered in the life insurance industry.
1.6 Rationale
Despite being a vital component for the success of the insurance industry, little research has
been undertaken in Bangladesh regarding life insurance marketing. This research aspires to
identify and analyse the underlying the problems of the marketing abilities and techniques
adopted by the life insurance companies and also the prospects of these various marketing
techniques adopted within our country. The results of this study will hopefully shed some
light on what are the problems associated in marketing life insurance policies and the level of
positive outcomes brought about by the different marketing tools and techniques adopted by
the companies. The main beneficiaries of this research will be the life insurance companies,
Insurance Development & Regulatory Authority Bangladesh (IDRA), and organisations like
Bangladesh Insurance Academy.
1.7 Scopes and Limitations
The study is being undertaken in the context of Dhaka City and the life insurance companies
operating here. Furthermore, it was not possible to go to every single company that offers
insurance, thus only the few largest companies were selected for this study. Thus, findings
made from this study may not be applicable to other cities in Bangladesh and definitely not
other countries. However, there is an immense scope to extend the study to other parts of
Bangladesh. Secondly, there is a possibility that the data collected from the various
respondents are biased. Thirdly, the study has been conducted with non-probabilistic
convenience sampling as the sampling method, where subjects are selected because of their
convenient accessibility and proximity to the researcher. Lastly, factors like time, money,
availability of data, and accessibility of research pose serious limitations on this research.
P a g e | 13
2.0 METHODOLOGY
This study was conducted on marketing executives employed in the life insurance sector in
Bangladesh. From 9 different companies situated in Dhaka, a total of 48 executives were
interviewed. To gauge the respondents views, thirty-two variables were developed in our
questionnaire. To conduct the survey, a structured questionnaire with a five-point Likert
Scale was used (1 indicated strongly disagree and 5, strongly agree).
The life insurance companies where we carried out our surveys are: 1) MetLife Alico
(American Life Insurance Company), 2) Pragati Life Insurance Ltd., 3) Chartered Life
Insurance Company Ltd., 4) Mercantile Islami Life Insurance Ltd. 5) Sunlife Insurance
Company Ltd., 6) Jiban Bima Corporation 7) Progressive Life Insurance Company Ltd., 8)
Continental Insurance Ltd. and 9) Jamuna Life Insurance Ltd. Among these the companies
Metlife Alico and Jiban Bima are each unique; the former is the only foreign and the latter is
the sole state-owned life insurance company in Bangladesh. Respondents were picked by
non-probability convenient sampling from the life insurance companies.
2.1 Data Collection
To obtain the data needed to conduct this survey, both primary and secondary sources were
used.
2.1.1 Primary
The primary data for this research was collected by means of a survey among the executives
from nine life insurance companies. Firstly, we tried to determine the appropriate sample size
for this research, but the constraint faced were firstly the limited number of marketing
managers and on top of that those among them who were willing to take part in the survey.
We were able to conduct the survey among 48 marketing managers from these nine
companies. This procedure has been non-probabilistic and based on a combination of
accidental, quota and snowball methods. Initially we contacted one marketing manager from
each company and through them gained access to others from the same company.
For preparing the questionnaire, a schema was developed which contained the blueprint of
these research objectives and based on the variables in the schema, the questionnaire was
developed. Before carrying out the survey at a large scale, we conducted interviews of one
company. The feedback in understanding of the questions helped us correct our questionnaire
to make it easily understandable and clear. Finally with this revised questionnaire, the survey
was conducted.
2.1.2 Secondary
There have been very few studies carried out on insurance companies in Bangladesh, so
secondary data sources for this research were a bit limited. However, some secondary data
was eventually collected throughout the course of the research. The main sources were
journals, books, articles and so on. The data collected from the secondary sources is
summarised in the literature review.
2.1.3 Distribution of sample respondents
48 life insurance marketing executives were interviewed for this survey. Among these,
16.67% the respondents were from Progressive Life Insurance Ltd. It was followed next by
Mercantile and Jamuna (at 12.5%) then by the companies Jiban Bima, Sunlife and
Continental (at 10.42%) and lastly by Pragati, Chartered and Metlife Alico (at 8.33%).
P a g e | 14
2.2 Sample Size

Considering a population of 115 (5 insurance executives from each of the 31 life insurance
companies) life insurance executives, a significance level of 5%, a precision level of 5%, and
a co-efficient of variation of 50%, we calculated the sample size to be:
n=
=
2 2
2
2
+ 2
1551.962 0.52
1.962 0.52 + 1550.052
= 110.44
= 110
We had originally planned to survey all 110 people to have a realistic estimation of the
perception of the life insurance executives regarding the challenges faced by them while
marketing life insurance policies.
However, due to time constraints, we could not survey the originally determined number of
110 respondents. The sample size was reduced to 48 respondents. Our actual precision level
(do) had to be lowered as well48 =
1551.962 0.52
1.962 0.52 + 155 2
do = 11.75%
Solving for do, it is clear that we should expect a precision level of 11.75% if we keep the
confidence interval at 95%.
2.3 Sample Frame
Our sample was the list of all the life insurance executives currently employed in all the life
insurance companies in Bangladesh. However, since we could not get access to this
information, no sample frame can be mentioned now.
2.4 Questionnaire Development
As our starting point we relied on the literature review and interview with management
officials of life insurance companies to get an understanding and background of the sector.
We looked at the research done on life insurance marketing and from there we developed the
questionnaire to gauge the challenges.
Since our survey respondents were to comprise the marketing managers of life insurance
companies and therefore with a limited amount of time to spare for interviews, we decided to
keep the questionnaire short and specific. It consisted of mostly questions in Likert Scale.
They were designed to measure the opinions of the marketing managers about statements we
could use to measure our parameters. The questions which would be more easily answered
were given at first and the ones which would require more cognitive input were put in the
second half of the questionnaire.
Our co-ordination schema had 3 parameters which were further expanded into 37 simple
variables. The questions were designed to measure these variables. For the Likert Scale,
P a g e | 15
respondents were asked to opine on statements with strongly agree through to strongly
disagree. 5 measures were given in this range. This range was given points of 1 to 5, with 5
being strongly agree and 1 being strongly disagree.
Both the co-ordination schema and the questionnaire have been included in the appendix
section.
2.5 Pre-testing
The first surveys were carried out on the employees of Sunlife Insurance Company Ltd. This
was our pilot survey and we changed some of the wording in our questionnaire, which we felt
were difficult for the respondents to understand.
2.6 Validity
A measure will be valid only if it measures what it is supposed to measure. If it is a case of
direct measures, validity will be self-evident. However, in cases of indirect measures, such as
indexes and scales, there can only be an approximation of validity. There is actually no way it
can be guaranteed that an indirect measure is valid enough to measure a concept.
Therefore, face validity has been used to test the validity of the variables present in this
research. Face validity is defined as the extent to which a test is subjectively viewed as
covering the concept it purports to measure. Or in other words, it means whether or not the
variable seems to be a measure the concept at face value or according to the researchers
logical reasoning. Our variables were devised after going through the literature reviews.
2.7 Reliability
Reliability comes to the forefront when variables developed from summated scales are used
as predictor components in objective models. Since summated scales are an assembly of
interrelated items designed to measure underlying constructs, it is very important to know
whether the same set of items would elicit the same responses if the same questions are recast
and re-administered to the same respondents. Variables derived from test instruments are
declared to be reliable only when they provide stable and reliable responses over a repeated
administration of the test.
Cronbach's Alpha () is an estimate of reliability, specifically the internal consistency, of a
test or scale. When internal consistency is present in a test, it is interpretable. Cronbach's
Alpha seeks to measure how closely test items are related to one another and thus measuring
the same construct. The result from our reliability test is shown below.
Table 7: Reliability Statistics Using Alpha Technique
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based on Standardised Items N of Items
.767
.743
32
For social research, a Cronbachs Alpha of more than 0.5 is acceptable. For the data obtained,
a Cronbachs Alpha of 0.767 has been calculated. This means that the items measured are
acceptably internally consistent.
P a g e | 16
2.8 Data Analysis

After successful completion of data collection, the information gathered was recorded in
SPSS and data analysis will be performed. Both descriptive and inferential statistical tools
were used.
2.9 Budget
The research is projected to cost around BDT 14,630 which translates to a per researcher cost
of BDT 1,829. A detail of the budget is outlined in the table below:
Table 8: Research Budget
P a g e | 17
3.0 DATA ANALYSIS

3.1 Individual Variable Analysis
In the questionnaire, there were 32 questions which used the Likert Scale. To find out which
of these variables executives of life insurance companies consider the most and least
important, the mean index and standard deviation of the variables were calculated. The results
are given below.
3.1.1 Top 10 variables
The following variables are the ones which scored the highest, i.e. had the highest mean
index in the questionnaire. The respondents felt strongly about these items.
Table 9: Top Ten Variables
Mean
Standard
Deviation
1. Increase in Education level of general population will boost the

understanding and acceptability for life insurance.
4.65
0.483
2. The Process of service delivery plays an essential role in life insurance

marketing.
4.63
0.489
3. Improvements in general Standard of Living resulting from economic

growth in Bangladesh can widen the target audience for life insurance
4.63
0.606
4. Political Instability in the environment creates significant problems for

caries out marketing activities
4.60
0.536
5. Product is important for life insurance marketing
4.56
0.741
6. Stakeholders (People) have an effect on the marketing of life insurance

policies
4.52
0.684
7. Business-to-Consumer (B2C) communication is important in acquiring new

customers for insurance companies
4.52
0.505
8. Negative Mind-set of consumers affects the sales of insurance policies
4.40
0.536
9. The Socioeconomic Environment of the country is a barrier towards the

marketing of life insurance policies
4.40
0.869
10. There is scope for diversifying into New Policies which can be offered in the
life insurance industry
4.40
0.644
Variables
P a g e | 18
3.1.2 Bottom 10 variables

These variables scored the lowest in our questionnaire. Respondents felt these items to be of
the least importance.
Table 10: Bottom Ten Variables
Mean
Standard
Deviation
1. Digital Media can play an important role in augmenting sales
2.79
1.254
2. Life insurance can be marketed successfully through the Radio
2.94
1.21
3. Level of Competition in the industry affects the scope of the industry
3.15
1.399
4. Policy Pricing is vital while marketing life insurance
3.54
1.443
5. The Nature of the Product is a limiting factor in the sales of policies
3.63
1.282
6. Promotion Frequency has an effect on the level of sales of policies
3.67
1.226
3.71
1.304
3.73
1.216
9. The Promotion Message used affects the response from customers
3.75
1.176
10.Legal Restrictions are a strong limiting factor in the market potential that can
be reached
3.83
1.521
Variables
7. Providing Physical Evidence for the service that is insurance is important in

order to stay competitive in the market
8. Rise in Digital Penetration will aid life insurance marketing promotions in the
future
3.2 Hypothesis Testing

After testing the hypotheses, it can be seen that in 29 cases out of 32, the respondents agreed
with the statements which had been proposed. Only three hypotheses of the hypotheses
devised were rejected. When conducting the analysis, a test value of 3 was taken with a
significance level of 5% (=0.05), for a two-tailed T-test, giving a critical value of t at +/1.679. The results are given below.
First specific objective: Identify and evaluate the marketing plans used in different life
insurance companies in Bangladesh.
The 18 hypotheses which fall under this objective are as follows:
Hypothesis 1: Product is important for life insurance marketing.
Using Ho: 3, Ha: > 3, we get a t-calculated value 14.607. The significance level at
which this claim will be rejected is .000 and therefore the null hypothesis is rejected which
leads us to the acceptance of the claim that the executives agree that the product is important
for life insurance marketing.
P a g e | 19
Hypothesis 2: Policy Pricing is vital while marketing life insurance.

Using Ho: 3, Ha: > 3, we get a t-calculated value 2.600. The significance level at which
this claim will be rejected is .012 and therefore the null hypothesis is rejected which leads us
to the acceptance of the claim that the policy pricing is vital while marketing life insurance.
Hypothesis 3: Promotional Activities play a big role in reaching out to the target
market.
to the acceptance of the statement that promotional activities play a big role in reaching out to
the target market.
Hypothesis 4: Physical Distribution of policies is an important factor
to the acceptance of the statement that physical distribution of policies is an important factor.
Hypothesis 5: Providing Physical Evidence for the service that is insurance is important
in order to stay competitive in the market.
to the acceptance of the claim that providing physical evidence for insurance is important in
order to stay competitive in the market.
Hypothesis 6: The Process of service delivery plays an essential role.
leads us to the acceptance of the claim that the process of service delivery plays an essential
role.
Hypothesis 7: Stakeholders (People) have an effect on the marketing of life insurance
policies.
leads us to the acceptance of the claim that stakeholders have an effect on the marketing of
life insurance policies.
Hypothesis 8: It is necessary for insurance companies to carry out Consumer Research
in order to serve the market better.
to the acceptance of the statement that it is necessary for insurance companies to carry out
consumer research in order to serve the market better.
Hypothesis 9: Value Offerings of a particular product or package must be chosen to be
most appealing for a customer.
P a g e | 20
leads us to the acceptance of the statement that value offerings of a particular product or
package must be chosen to be appealing for a customer.
Hypothesis 10: Promotion Frequency has an effect on the level of sales of policies.
to the acceptance of the statement that promotion frequency has an effect on the level of sales
of policies.
Hypothesis 11: The Promotion Message used affects the response from customers
to the acceptance of the statement that the promotion message used affects the response from
customers.
Hypothesis 12: The choice of Promotion Media will affect the effectiveness of insurance
marketing campaign.
to the acceptance of the statement that the choice of promotion media will affect the
effectiveness of insurance marketing campaign.
Hypothesis 13: TV is an effective marketing channel for life insurance marketing.
to the acceptance of the claim that TV is an effective marketing channel for life insurance
marketing.
Hypothesis 14: Print Media is an effective medium for life insurance marketing.
to the acceptance of the statement that print media is an effective medium for life insurance
marketing.
Hypothesis 15: Digital Media can play an important role in augmenting sales.
Using Ho: 3, Ha: > 3, we get a t-calculated value -1.151. The significance level at
which this claim will be rejected is .256 and therefore the alternate hypothesis is rejected
which leads us to the conclusion that digital media cannot play an important role in
augmenting sales.
Hypothesis 16: Life insurance can be marketed successfully through the Radio.
Using Ho: 3, Ha: > 3, we get a t-calculated value -.358. The significance level at which
this claim will be rejected is 0.722 and therefore the alternate hypothesis is rejected which
leads us to the conclusion that life insurance cannot be marketed successfully through the
radio.
P a g e | 21
Hypothesis 17: Business-to-Business (B2B) relationships are an important source of

clients.
leads us to the acceptance of the claim that business-to-business relationships are an
important source of clients.
Hypothesis 18: Business-to-Consumer (B2C) communication is important in acquiring
new customers for insurance companies.
which this claim can be rejected is .000. The null hypothesis is therefore rejected which leads
us to the conclusion that business-to-consumer communication is important in acquiring new
customers for insurance companies.
Second specific objective: Investigate the constraints faced by the marketing managers and
the extent to which they affect marketing effectiveness.
The 8 hypotheses which fall under this particular objective are as follows:
Hypothesis 19: Legal Restrictions are a strong limiting factor in the market potential
that can be reached.
this claim can be rejected is .000. The null hypothesis is therefore rejected which leads us to
the acceptance of the claim that legal restrictions are a strong limiting factor in the market
potential that can be reached.
Hypothesis 20: Negative Mind-set of consumers affects the sales of insurance policies.
which this claim will be rejected is .000. Therefore the null hypothesis is rejected which leads
us to the acceptance of the statement that negative mind-set of consumers affects the sales of
insurance policies.
Hypothesis 21: The Nature of the Product is a limiting factor in the sales of policies.
this claim will be rejected is .001. Therefore the null hypothesis is rejected which leads us to
the acceptance of the statement that nature of the product is a limiting factor in the sales of
policies.
Hypothesis 22: Budget Constraints are a significant obstacle to the implementation of
marketing activities.
the acceptance of the claim that budget constraints are a significant obstacle to the
implementation of marketing activities.
P a g e | 22
Hypothesis 23: Political Instability in the environment creates significant problems for
carrying out marketing activities.
us to the acceptance of the claim that political instability in the environment creates
significant problems for carrying out marketing activities.
Hypothesis 24: Level of Competition in the industry affects the scope of the industry.
this claim will be rejected is .474. Therefore the alternate hypothesis is rejected which leads
us to the conclusion that level of competition in the industry does not affect the scope of the
industry.
Hypothesis 25: The Socioeconomic Environment of the country is a barrier towards the
marketing of life insurance policies.
us to the acceptance of the claim that socioeconomic environment of the country is a barrier
towards the marketing of life insurance policies.
Hypothesis 26: People have a Negative Perception about life insurance.
us to the acceptance of the statement that people have a negative perception about life
insurance.
Third specific objective: Determine the scopes which marketing managers can exploit in
order to increase the policy subscriptions of life insurance.
The 6 hypotheses which fall under this particular objective are as follows:
Hypothesis 27: Improvements in general Standard of Living resulting from economic
growth in Bangladesh can widen the target audience for life insurance.
us to the acceptance of the claim that improvements in general standard of living resulting
from economic growth in Bangladesh can widen the target audience for life insurance.
Hypothesis 28: Rise in Digital Penetration will aid life insurance marketing promotions
in the future.
the acceptance of the claim that rise in digital penetration will aid life insurance marketing
promotions in the future.
P a g e | 23
Hypothesis 29: Increase in Education level of general population will boost the
which this claim will be rejected is .000 and the null hypothesis is therefore rejected which
leads us to the acceptance of the statement that increase in education level of general
population will boost the understanding and acceptability for life insurance.
Hypothesis 30: More specified and targeted B2B Communications will aid life insurance
marketing.
the acceptance of the claim that more specified and targeted B2B communications will aid
life insurance marketing.
Hypothesis 31: Innovation is an important factor when marketing your life insurance
policies.
the acceptance of the statement that innovation is an important factor when marketing your
life insurance policies.
Hypothesis 32: There is scope for diversifying into New Policies which can be offered in
the life insurance industry.
us to the acceptance of the statement that there is scope for diversifying into new policies
which can be offered in the life insurance industry.
P a g e | 24
3.3 Subsection Analysis

In the questionnaire, there were 32 variables which were divided into 4 subsections. The
group mean, i.e. the subsection mean, will now be compared to each individual variable
present in that particular group to see which variables within the group are thought to have
the most impact.
3.3.1 Group A: Variables affecting marketing
The mean of this group is 4.06, with a standard deviation of 1.13. In terms of the individual
variables, from the table numbers 1 6 have means higher or equal to the group mean, while
the bottom five variables means are lower. The conclusion can therefore be drawn that in
marketing life insurance, the executives consider the factors Process, Product and People the
most important while the factors Physical Evidence, Promotion Frequency and Pricing are
thought to have the least impact.
Table 11: Variables affecting marketing
Variables
Mean
1. The Process of service delivery plays an essential role
4.63
2. Product is important for life insurance marketing
4.56
3. Stakeholders (People) have an effect on the marketing of life insurance

policies
4. Value Offerings of a particular product or package must be chosen to be
most appealing for a customer
Group
Mean
4.52
4.19
5. Physical Distribution of policies is an important factor
4.17
6. It is necessary for insurance companies to carry out Consumer Research in

order to serve the market better
4.13
7. Promotional Activities play a big role in reaching out to the target market
4.06
8. The choice of Promotion Media will affect the effectiveness of insurance

marketing campaign.
3.85
9. The Promotion Message used affects the response from customers
3.75
10.Providing Physical Evidence for the service that is insurance is important in

order to stay competitive in the market
3.71
11.Promotion Frequency has an effect on the level of sales of policies
3.67
12.Policy Pricing is vital while marketing life insurance
3.54
4.06
3.3.2 Group B: Marketing channels

The group Marketing Channels has a mean of 3.73 and a standard deviation of 1.23. Looking
at the variables, the top four variables have means higher than the group and numbers 5 and 6
means which are much lower than the groups. It can therefore be said that life insurance
marketing executives believe Business to Client (B2C), Business to Business (B2B) and Print
Media to be the best channels to use when marketing life insurance. On the other hand, Radio
and Digital Media are seen as the least effective.
P a g e | 25
Table 12: Marketing Channels

Variables
Mean
1. Business-to-Consumer (B2C) communication is important in acquiring new

customers for insurance companies
4.52
2. Business-to-Business (B2B) relationships are an important source of clients
4.31
3. Print Media is an effective medium for life insurance marketing
3.98
4. TV is an effective marketing channel for life insurance marketing
3.83
5. Life insurance can be marketed successfully through the Radio
2.94
6. Digital Media can play an important role in augmenting sales
2.79
Group
Mean
3.73
3.3.3 Group C: Variables affecting scope

The group of factors which affect marketing scope has a mean of 4.05 and a standard
deviation of 1.15. Variables with means higher than the group mean are numbers 1 through 5,
while the bottom three variables means are lowers. The conclusion can be drawn that
marketing executives believe that Political Instability, Negative Mind-set of the people and
Socioeconomic factors have the most impact on the scope of marketing life insurance. Legal
Restrictions, Product Nature and Competition, on the other hand, have the least effect on the
scope.
Table 13: Variable Affecting Scope
Variables
Mean
1. Political Instability in the environment creates significant problems for

caries out marketing activities
4.60
2. Negative Mind-set of consumers affects the sales of insurance policies
4.40
3. The Socioeconomic environment of the country is a barrier towards the

marketing of life insurance policies
4.40
4. People have a Negative Perception about life insurance
4.35
5. Budget Constraints are a significant obstacle to the implementation of

marketing activities
6. Legal Restrictions are a strong limiting factor in the market potential that
can be reached
Group
Mean
4.05
4.08
3.83
7. The Nature of the Product is a limiting factor in the sales of policies
3.63
8. Level of Competition in the industry affects the scope of the industry
3.15
P a g e | 26
3.3.4 Group D: Other variables

The last group contains miscellaneous factors which did not fit into the other subsections.
The total mean for this group was 4.30 with a standard deviation of 0.94. After looking at the
results, it can be said that marketing executives believe that an increase in Education levels,
general Standard of Living and introduction of New Policies will have the highest positive
impact on marketing life insurance in the future. In contrast, they place little faith in the
impact of innovation and the effect of increased digital penetration on insurance marketing in
the future.
Table 14: Other Variables
Variables
Mean

4.65
2. Improvements in general Standard of Living resulting from economic growth

in Bangladesh can widen the target audience for life insurance
4.63
3. There is scope for diversifying into New Policies which can be offered in the
life insurance industry
4.40
Group
Mean
4.30
4. More specified and targeted B2B Communications will aid life insurance
marketing
4.33
5. Innovation is an important factor when marketing your life insurance policies
4.06
6. Rise in Digital Penetration will aid life insurance marketing promotions in the
future
3.73
P a g e | 27
3.4 Correlation:
To see whether or not the experience life insurance executives gain through the years is
related to their responses, a Spearmans Rank-Order Correlation has been run. The 32
variables were compared with experience, taking a 5% level of significance. From the results
obtained, it can be seen that 10 of the variables are statistically significant. Therefore, these
are variables which change with executives experience. The variables are shown below.
Table 15: Variables Strongly Correlated with Experience
Correlation
Coefficient
Significance (2tailed)
1. Improvements in general Standard of Living resulting from

economic growth in Bangladesh can widen the target audience
for life insurance
0.487
2. There is scope for diversifying into New Policies which can be

offered in the life insurance industry
0.450
0.001

0.446
0.002
4. The Process of service delivery plays an essential role.
0.417
0.003
5. Print Media is an effective medium for life insurance marketing
0.408
0.004
6. The Socioeconomic environment of the country is a barrier

towards the marketing of life insurance policies
0.362
0.011
7. Business-to-Consumer (B2C) communication is important in

acquiring new customers for insurance companies
0.348
0.015
8. Negative Mind-set of consumers affects the sales of insurance

policies
0.306
0.034
9. The choice of Promotion Media will affect the effectiveness of

insurance marketing campaign.
-0.301
0.037
10.The Nature of the Product is a limiting factor in the sales of

policies
-0.339
0.018
Variables
Regarding the direction of the correlation, the last two variables are negative. Therefore, it
can be said that as life insurance executives gain more experience, they tend to think the
variables Promotion Media and Product Nature of less use. The opposite is true for the other
variables in the table. With increased experience, executives are more likely to think these
variables important.
As for the strength of the relationships between experience and these 10 variables, the values
of the correlation coefficients range from 0.487 to 0.306 and -0.301 to -0.339. This denotes a
moderate to weak relationship between experience and these 10 variables.
P a g e | 28
3.5 Factor Analysis

Factor analysis is defined as a statistical method used to describe variability among
observed, correlated variables in terms of a potentially lower number of unobserved
variables called factors. A total of 32 variables were used to get a better understanding of
executives views on marketing life insurance in Bangladesh. Therefore, to understand which
of the key variables have the most contribution according to our respondents, it is essential to
carry out a Factor Analysis.
Before carrying out Factor Analysis, it is essential to check our sampling adequacy. This is
done by checking the KMO Measure of sampling adequacy.
Table 16 : KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .215
Bartlett's Test of Sphericity
Approx. Chi-Square
1888.041
df
496
Sig.
.000
A general rule of thumb is that a KMO value of should be greater than or equal to 0.5 for a
satisfactory factor analysis to process. Our KMO of 0.215 is significantly lower than this
threshold. The Factor Analysis test has been carried to obtain a slightly clearer idea of the
relationship between the variables. The results are given below; however, care must be taken
when drawing conclusions from our test, as the KMO is not high enough.
After carrying out the Factor Analysis on SPSS, the initial 32 variables were divided into 9
different factors. Usually, the first two to three groups tend to be the most relevant. The first
four groups generated by the software are described below.
3.5.1 Factor: consumer focus
The most important determinant of Customer Focus is the Value Offering with an Eigenvalue
of 6.970. This factor explains 21.78% of the total variance of the data set. The variables that
constituted this factor are: Value Offering (0.874) Consumer Research (0.857) TV (0.793)
Promotions (0.743) Promotion Media (0.741), Competition (0.636) and Digital Media
(0.494). The higher level of factor loading indicates higher level of correlation among the
variables with the factor. It shows how the Customer Value of the policy is affected by
changing the Value Offering and conducting proper Research to produce the best possible
mix. Furthermore, promotion is also required to make customers aware of the various
packages available. The last two variables, competition, and Digital Media have lower Factor
Loading than the other variables.
P a g e | 29
Table 17: Factor Consumer Focus
VARIABLE NAME
Value Offering
Consumer Research
TV
Promotions
Promotion Media
Competition
Digital Media
FACTOR LOADING
.874
.857
.793
.743
.741
.636
.494
3.5.2 Factor: socioeconomic factors and product delivery

This factor explains 12.63% of the total variance of the data set. The second most important
factor in the Marketing Managers perspective for the marketing challenges are the
Socioeconomic factors. Improvement in the socioeconomic state of the people is the primary
variable here with a factor loading of 0.924. It talks about how marketing managers believe
that an increase in the purchasing power of the general public should increase the sales of
insurance. This is followed by the Place i.e. Quality of Service Delivery (0.826), then the
Physical Evidence (0.802) and finally the Nature of the Product (-0.478). All the variables
except the last have very high loadings (> 0.80) which suggests that they are strongly
correlated.
Table 18: Factor Socioeconomic factors and Product Delivery
VARIABLE NAME
Socioeconomic
Place
Physical Evidence
Product Nature
FACTOR LOADING
.924
.826
.802
-.478
3.5.3 Factor: perceptions about insurance

This factor describes about 5% of all data variations and is very important in understanding
the challenges of marketing life insurance. Negative Mind-set of Insurance has the highest
loading at 0.841 with an Eigenvalue of 0.669. A similar variable about Negative Perception is
similarly loaded at 0.753. The other two variables in this factor, i.e., Radio (0.673) and
Process (0.629) show a significant mathematical correlation with the other variables in this
factor, however there is unlikely to be any real dependency. Such artefacts are a part of the
process of Factor Analysis. People in Bangladesh generally have a negative perception about
insurance. They seem to think that it is a waste of money. Others blame the company for
capitalising of the fear of death. Nonetheless, marketing managers have identified these
problems to be very significant factors holding back the development of the sector.
Table 19: Factor Perceptions about Insurance
Variable Name
Negative Mind-set Impact
Negative Perception
Radio
Process
Factor Loading
.841
.753
.673
.629
P a g e | 30
3.5.4 Factor: promotion and communication

This factor explains 5.02% of the total variance of the data set. Promotion and
Communication is an important factor which contributes to the perception of policyholders
regarding quality of service, and regarding new products available. B2B Communication
holds the highest factor loading of 0.949, followed by Print Media (0.773), Promotional
Frequency (0.703) and Education (0.517). This factor explains how the Marketing of
insurance is affected by promotional tools and strategies used by the companies. In the
perspective of the marketing managers, at least, the promotional frequency is also a strong
factor affecting the sales of policies. The last variable, Education has less association with
this factor due to a smaller Factor Loading.
Table 20: Factor Promotion and Communication
Variable Name
B2B Communication
Print Media
Promotion Frequency
Education
Factor Loading
.949
.773
.703
.517
3.5.5 Factor: standard of living

This factor explains 0.899% of total variance. It consists of three variables: Living Standard
(0.743), Innovation (0.671) and Digital Penetration (0.653). The variables have moderate
factor loading indicating only a little correlation with each other.
Table 21: Factor Standard of Living
Variable Name
Living Standard
Innovation
Digital Penetration
Factor Loading
.743
.671
.653
3.5.6 Factor: legal restriction

This factor explains 0.28% of total variance. The variables have moderately low factor
loading showing that there is low correlation between the variables.
Table 22: Factor Legal Restrictions
Variable Name
Legal Restrictions
Pricing
Factor Loading
.764
.754
3.5.7 Factor: political instability

This factor explains 0.157% of total variance. It has two variables: Political Instability
(0.860) and B2C Clients (0.529). While the first variable has a high factor loading, the second
has minimum loading.
Table 23: Factor Political Instability
Variable Name
Political Instability
B2C Clients
Factor Loading
.860
.529
P a g e | 31
3.5.8 Factor: people

This factor explains 0.079% of the total variance. This factor consists of three variables:
People (0.787), Promotion Message (0.641) and B2B Clients (0.504).
Table 24: Factor People
Variable Name
People
Promotion Message
B2B Clients
Factor Loading
-.787
.641
-.504
3.5.9 Factor: product

This factor explains 0.007% of total variance. This factor consists of two variables: Product
(0.927) and New Policies (0.738).
Table 25: Factor Product
Variable Name
Product
New Policies
Factor Loading
.927
.738
P a g e | 32
4.0 INTERVIEW FINDINGS

The most insightful thoughts on the life insurance industry were from a marketing manager at
Chartered Life Insurance, who had experience of working in ALICO for more than two
decades. From his interview, we learned of the problems faced by most life insurance
companies in Bangladesh, which confirmed our assumptions from the literature review.
Firstly, the industry is not lucrative. The perception towards field agents can be judged from
the old saying that in the past, buildings used to have the sign Insurance people and dogs are
not allowed in the premises. While that may not be the case today, the unfavourable
perception exists.
Educated people are reluctant to work for life insurance and the families of potential
employees discourage them to be agents. This is because the field agents have very low or no
basic salary and it depends mainly on sales of insurance policies. They start off as Financial
Associates and after 36 sales are promoted to Unit Manager who lead teams.
The product itself is an unsought service and no one wants to think about their own death
hence the product has negative demand. The governments role has also not been helpful to
the industry. The salary structure of the field agents are fixed by the government. This means,
individual companies cannot set higher salaries to attract better employees. The government
also reduced the commission from policy sales to a maximum of 35% from 40%, without any
added benefits. On top of that, they are charged a 5% tax on the commission. The training
and license of field agents has to be given from IDRA, which makes it harder for companies
to recruit field agents. All of which is important because most companies rely very heavily on
the field agents when it comes to marketing and selling policies.
From interviews with Jiban Bima, the importance of field agents in the selling of policies is
further strengthened. Jiban Bima was originally formed through the merger of 37 companies.
This resulted in inefficiency and the negative perception was intensified. Many people started
believing that insurance companies do not actually pay people their money. But another
important thing we learned was that after independence there were claims that people burned
jute mills intentionally to get insurance claims. As a result, it drained the insurance sector and
the governments resources.
Pragati on the other hand mentioned that the whole process of marketing life insurance is in a
very poor condition and the major reason behind people not subscribing. There is little or no
training given to the sales people and their behaviour is also a drawback. People assume that
insurance companies lie about their policies, but the actual issue is that the sales people are
not themselves aware of the policies and features. Another issue pointed out was the lack of
diversity in the features offered. Infrastructural changes are also required for the proper
development of the industry.
The marketing activities by these companies were found mostly to be confined to printing
calendars and diaries. Print advertisements and TVCs are rare and not very effective. Online
marketing was considered to be of great potential but has not been utilised till now. Only
ALICO engages in marketing activities among all the companies.
The government on the other hand has done very little for the industry. Industries like
garment and ICT have gotten large amounts of support to carry out their businesses. Even in
India, they show the TVCs that try to increase the peoples familiarity and acceptance of
P a g e | 33
insurance. The people in the sector want special steps to be taken in order to increase peoples
awareness of insurance.
The structure of insurance commission by IDRA gives maximum rewards for the 1st year the
insurance policy is filed. As a result many field agents fake profiles and use fake papers to
purchase insurance policies. There is generally a payment of 150% of the insurance premium
to the field agent on the purchase of a policy. The agent invests, for example 1 lakh, and gets
a 1,50,000 return - a total profit of 50%. Since IDRA gives greater reward for the first year
after policy is bought, there is little incentive among agents to ensure that the customers
complete the next payments. As a result there is a very high non-renewal rate. Currently the
renewal rate is around 15-20%, but a bare minimum rate of 40% is required to keep the
industry healthy.
There is also unhealthy competition among the companies as pointed out by all of them.
Practices such as lowering the premium so that the field agents can get a higher commission
are rampant. This is doing damage on the image of these companies.
There are some prospects for the industry as pointed out by the companies. These companies
rely heavily on the sales people and it can be seen that these field agents are self-motivated as
they join the workforce in spite of the low promise of rewards at the start of their career.
Since infrastructure is a limiting factor, developing that would results in a boost for the
industry. NGOs and the government can have a major role to play in educating and
informing people about life insurance.
5.0 RECOMMENDATIONS
The marketing executives of the insurance companies we surveyed had a number of
recommendations to overcome the challenges in the marketing of life insurance. The most
important of these were ways to attract more educated, competent personnel to the job and
ways the government can help.
The biggest problem hampering the development of the industry to its potential is the lack of
awareness and misconception regarding life insurance. Insurance companies feel that the
NGOs and the government can play a significant role in education people about life
insurance.
The restrictions in policy by the IDRA are bottlenecks to the industry. The companies feel
that policy changes in this regard would help them in a number of ways including in
attracting better employees.
Field agents are rewarded on the basis of sales at present. Coupled with the low rate of
commission, this does not give them incentive and sometimes lead them to malpractices.
Administration is still a major challenge and if that can be improved, the employees can be
motivated despite low salary.
At present very few companies provide proper training and monitoring of the field agents.
Since they serve as the primary source of marketing and information dissemination, they need
to be trained. On part of the IDRA, proper monitoring of the activities of the insurance
companies to eradicate illegal practices is needed. The present perception of the malpractices
of insurance companies needs to be tackled.
Some companies also feel that insurance should be made mandatory for certain professions
which need commercial driving license.
P a g e | 34
6.0 CONCLUSIONS
In closure, it can be said that very little research both academic and market oriented - has
been carried out on this sector. Therefore, despite the sector existing for a long period of
time, we know very little about it.
This study has been mainly carried out in the organisation around Dhaka city and therefore
reflects the perceptions of insurance executives of companies based in Dhaka. Among the
respondents of the survey, 10.4% was employed in the state owned Jiban Bima Corporation
and the rest were from privately owned life insurance companies, which includes respondents
from American Life Insurance Company (8.33%), which is the only multinational life
insurance company in Bangladesh. The numbers of responses from each of the companies
were selected consciously for the study to have a sample representative of the population.
The complex and simple variables in the study shows the marketing plans and activities that
the life insurance executives consider important in the sales of the life insurance policies. The
executives were only indifferent about the effectiveness of marketing channels such as radio
and digital media and highly emphasised the importance of the impact of factors like
education, field agents and standard of living of the general people of Bangladesh. The study
also pinpoints the challenges currently faced by the managers and the scopes that they
industry can exploit to improve the neglected sector and increase their performance.
Overall, the research shows the variables used in the research are relevant and from the
research, it can be found that the life insurance executives believe they can use numerous
marketing activities to improve their performance but are unable to do so because of the
unfavourable environment that they operate in. Other than that, it was also found that there is
immense potential for improvement for which the whole infrastructure needs to be revamped
and major investment is needed.
P a g e | 35
APPENDED PARTS
Appendix 1: Questionnaire
Survey Questionnaire
for
Challenges of Life Insurance Marketing In Bangladesh: Executives Perspective
Respondents Name:
Company Name:
Company Address:
Email:
Contact No:
Date:
Time:
We the students of the BBA Program of the Institute of Business Administration, Dhaka
University are conducting a survey on the problems and prospects of life insurance marketing
in Bangladesh for our Research Method course. Please take a moment of your time in filling
out this questionnaire and helping us with our research. All information provided by you here
is strictly confidential and will be used for the purely academic confines of our course.
A.
Please tick/fill in the appropriate answer
1. What is the general level of income of those who purchase life insurance?
Below 25,000 BDT 25,000 60,000 BDT Above 60,000 BDT
2. What is your approximate annual promotional budget? _________________BDT
5.
6.
Strongly
Disagree
4.
Disagree
3.
Neutral
1.
2.
SUBSECTION A Factors affecting marketing

Product is important for life insurance marketing.
When you market life insurance, policy pricing is vital.
Promotional activities play a big role in reaching out to the
target market.
Physical distribution of policies is an important factor
Providing physical evidence for the service that is insurance
is important in order to stay competitive in the market.
The process of service delivery plays an essential role.
Agree
ITEMS
Strongly
Agree
3. What are the key performance indicators you use to monitor the reach and effectiveness
of your marketing endeavours?
Reach per contact
Sales growth
Return on investment
Others (Please specify) __________________________________
B.
For the following statements please circle your level of agreement
5
5
4
4
3
3
2
2
1
1
P a g e | 36
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Stakeholders have an effect on the marketing of life insurance

policies.
It is necessary for insurance companies to carry out consumer
research in order to serve the market better.
Value offerings of a particular product or package must be
chosen to be most appealing for a customer.
Promotion frequency has an effect on the level of sales on
policies.
The promotion message used affects the response from
customers.
The choice of promotion media will affect the effectiveness
of Insurance marketing campaign.
SUBSECTION B Marketing Channels
TV is an effective marketing channel for Life Insurance
Marketing.
Print Media is an effective medium for Life Insurance
Marketing.
Digital Media can play an important role in augmenting sales.
Life Insurance can be marketed successfully through the
Radio.
Business-to-Business Relationships are an important source
of clients.
Business-to-Consumer Communication is important in
acquiring new customers for Insurance Companies.
SUBSECTION C Factors Affecting Scope
Legal restrictions are a strong limiting factor in the market
potential that can be reached.
Negative consumer mind-set affects the sales of insurance
policies.
The nature of the product is a limiting factor in the sales of
policies
Budget constraints are a significant obstacle to the
implementation of marketing activities.
Instability in the political environment creates significant
problems for carrying out marketing activities.
Level of competition in the industry affects the scope of the
industry.
The Socioeconomic environment of the country is a barrier
towards the marketing of life insurance policies.
People have a negative perception about life insurance
SUBSECTION D Other Factors
Improvements in general standard of living resulting from
economic growth in Bangladesh can widen the target
audience for life insurance
Rise in digital penetration will aid life insurance marketing
promotions in future
Increase in education level of general population will boost
the understanding and acceptability for life insurance
P a g e | 37
30.
31.
32.
More specified and targeted Business-to-Business

communications will aid life insurance marketing
Innovation is an important factor when marketing your life
insurance policies
There is scope for diversifying into new policies which can
be offered in the life insurance industry
C.
CLASSIFICATION DATA
Please tick/answer the following:
1. Gender:
Male
Highest
2. Education
Obtained:
HSC /
A
Bachelors Masters Other
Levels
(Please
specify)
______________________
3.
Female
Experience in the
_________
Industry:
years
THANK YOU FOR YOUR COOPERATION
P a g e | 38
Appendix 2: Co-ordination Schema

Parameter
Complex Variable
Simple Variable
Marketing Mix
Product
Price
Place
Marketing Strategies
Promotion
People
Process
Physical Evidence
ATL
Television
Radio
Print
Internet
BTL
Marketing Plans
Pamphlets
Brochures
Direct Consumer Contact
Marketing Techniques
Vehicular Promotion
Sponsorship
Word of Mouth
Digital
E-mail
Online Newspaper
Social Media
SMS
Cell Phone
Banner
Government Regulations
Industry Related Factors
Competition
Education
Demographic Factor
Income
Constraints
Religion
Life-long Beliefs
Societal Factor
Attitudes
Social Pressure
Education
Standard of Living
Income
Internet Penetration
Opportunities
Policy Differentiation
Innovation
Service Additions
New Promotion Techniques
Value
Likert Scale
Likert Scale
Likert Scale
Likert Scale
Likert Scale
Likert Scale
Likert Scale
Likert Scale
Likert Scale
P a g e | 39
Appendix 3: Data Analysis and Hypothesis Testing:

Descriptive Statistics
Consumer Income
Promotional Budget
Product
Pricing
Promotions
Place
Physical Evidence
Process
People
Consumer Research
Value Offering
Promotion Frequency
Promotion Message
Promotion Media
TV
Print Media
Digital Media
Radio
B2B Clients
B2C Clients
Legal Restrictions
Product Nature
Budget Constraints
Competition
Socioeconomic
Negative Perception
Living Standard
Digital Penetration
Education
B2B Communication
Innovation
New Policies
Valid N (listwise)
N
48
46
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
46
Minimum
1
200000
2
1
1
1
1
4
3
1
2
1
1
1
1
1
1
1
1
4
1
3
1
1
3
1
1
3
2
1
4
1
2
3
Maximum
4
3E+07
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
5
Mean
2.29
6802174
4.56
3.54
4.06
4.17
3.71
4.63
4.52
4.13
4.19
3.67
3.75
3.85
3.83
3.98
2.79
2.94
4.31
4.52
3.83
4.4
3.63
4.08
4.6
3.15
4.4
4.35
4.63
3.73
4.65
4.33
4.06
4.4
Std. Deviation
0.849
8153458
0.741
1.443
1.227
1.173
1.304
0.489
0.684
0.959
0.762
1.226
1.176
1.304
1.26
0.956
1.254
1.21
0.903
0.505
1.521
0.536
1.282
1.2
0.536
1.399
0.869
0.565
0.606
1.216
0.483
0.93
1.174
0.644
P a g e | 40
One-Sample Statistics
Product
Pricing
Promotions
Place
Physical Evidence
Process
People
Consumer Research
Value Offering
Promotion Frequency
Promotion Message
Promotion Media
TV
Print Media
Digital Media
Radio
B2B Clients
B2C Clients
Legal Restrictions
Product Nature
Budget Constraints
Competition
Socioeconomic
Negative Perception
Living Standard
Digital Penetration
Education
B2B Communication
Innovation
New Policies
Mean
Std. Deviation
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
4.56
3.54
4.06
4.17
3.71
4.63
4.52
4.13
4.19
3.67
3.75
3.85
3.83
3.98
2.79
2.94
4.31
4.52
3.83
4.4
3.63
4.08
4.6
3.15
4.4
4.35
4.63
3.73
4.65
4.33
4.06
4.4
0.741
1.443
1.227
1.173
1.304
0.489
0.684
0.959
0.762
1.226
1.176
1.304
1.26
0.956
1.254
1.21
0.903
0.505
1.521
0.536
1.282
1.2
0.536
1.399
0.869
0.565
0.606
1.216
0.483
0.93
1.174
0.644
Std. Error
Mean
0.107
0.208
0.177
0.169
0.188
0.071
0.099
0.138
0.11
0.177
0.17
0.188
0.182
0.138
0.181
0.175
0.13
0.073
0.219
0.077
0.185
0.173
0.077
0.202
0.125
0.081
0.087
0.175
0.07
0.134
0.169
0.093
P a g e | 41
One Sample Test

Test Value = 3
Product
Pricing
Promotions
Place
Physical Evidence
Process
People
Consumer Research
Value Offering
Promotion Frequency
Promotion Message
Promotion Media
TV
Print Media
Digital Media
Radio
B2B Clients
B2C Clients
Legal Restrictions
Negative
Mindset
Impact
Product Nature
Budget Constraints
Competition
Socioeconomic
Negative Perception
Living Standard
Digital Penetration
Education
B2B Communication
Innovation
New Policies
df
Sig. (2- Mean

tailed)
Difference
14.607
2.6
5.997
6.891
3.763
23.012
15.408
8.125
10.793
3.767
4.418
4.537
4.581
7.094
-1.151
-0.358
10.072
20.871
3.797
47
47
47
47
47
47
47
47
47
47
47
47
47
47
47
47
47
47
47
0
0.012
0
0
0
0
0
0
0
0
0
0
0
0
0.256
0.722
0
0
0
1.563
0.542
1.063
1.167
0.708
1.625
1.521
1.125
1.188
0.667
0.75
0.854
0.833
0.979
-0.208
-0.063
1.313
1.521
0.833
95%
Confidence
Interval
of
the
Difference
Lower
Upper
1.35
1.78
0.12
0.96
0.71
1.42
0.83
1.51
0.33
1.09
1.48
1.77
1.32
1.72
0.85
1.4
0.97
1.41
0.31
1.02
0.41
1.09
0.48
1.23
0.47
1.2
0.7
1.26
-0.57
0.16
-0.41
0.29
1.05
1.57
1.37
1.67
0.39
1.27
18.058
47
1.396
1.24
1.55
3.378
6.255
20.753
0.722
11.131
16.619
18.584
4.155
23.592
9.931
6.269
15.022
47
47
47
47
47
47
47
47
47
47
47
47
0.001
0
0
0.474
0
0
0
0
0
0
0
0
0.625
1.083
1.604
0.146
1.396
1.354
1.625
0.729
1.646
1.333
1.063
1.396
0.25
0.73
1.45
-0.26
1.14
1.19
1.45
0.38
1.51
1.06
0.72
1.21
1
1.43
1.76
0.55
1.65
1.52
1.8
1.08
1.79
1.6
1.4
1.58
P a g e | 42
Correlations
Experience
Product
Pricing
Promotions
Place
Phy Evidence
Process
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Spearman's rho
People
Consumer Research
Value Offering
Promotion Frequency
Promotion Message
Promotion Media
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
0.161
0.273
48
-0.248
0.089
48
-0.035
0.815
48
0.104
0.48
48
0.056
0.703
48
.417**
0.003
48
0.136
0.357
48
-0.247
0.09
48
-0.097
0.511
48
0.13
0.378
48
-0.271
0.062
48
-.301*
0.037
P a g e | 43
48
TV
Print Media
Digital Media
Radio
B2B Clients
B2C Clients
Legal Restrictions
Product Nature
Budget Constraints
Competition
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
0.034
0.818
48
.408**
0.004
48
-0.049
0.74
48
-0.233
0.112
48
0.276
0.057
48
.348*
0.015
48
-0.099
0.503
48
Correlation
Coefficient
Sig. (2-tailed)
.306*
Correlation
Coefficient
Sig. (2-tailed)
-.339*
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
0.034
48
0.018
48
-0.235
0.109
48
0.277
0.057
48
-0.162
0.27
P a g e | 44
48
Socioeconomic
Negative Perception
Living Standard
Digital Penetration
Education
B2B Communication
Innovation
New Policies
Experience
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
Correlation
Coefficient
Sig. (2-tailed)
.362*
0.011
48
0.223
0.127
48
.487**
0
48
0.185
0.207
48
.446**
0.002
48
0.161
0.274
48
0.185
0.209
48
.450**
0.001
48
1
48
*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).
P a g e | 45
Appendix 4: Factor Analysis

KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy.
Approx. Chi-Square
Bartlett's
Test
of
df
Sphericity
Sig.
.215
1888.041
496
.000
Total Variance Explained

Component Initial Eigenvalues
Total % of Variance Cumulative %
1
6.970 21.780
21.780
2
6.160 19.251
41.032
3
3.288 10.274
51.306
4
2.514 7.857
59.163
5
2.255 7.047
66.210
6
1.868 5.839
72.049
7
1.430 4.468
76.517
8
1.348 4.213
80.730
9
1.148 3.587
84.317
10
.855 2.671
86.988
11
.718 2.243
89.231
12
.669 2.090
91.321
13
.475 1.483
92.805
14
.446 1.394
94.199
15
.372 1.164
95.362
16
.309 .967
96.329
17
.258 .807
97.137
18
.183 .572
97.709
19
.154 .483
98.191
20
.127 .397
98.588
21
.102 .318
98.906
22
.094 .294
99.200
23
.089 .277
99.477
24
.052 .163
99.640
25
.037 .117
99.757
26
.030 .094
99.851
27
.020 .064
99.914
28
.015 .047
99.961
29
.006 .018
99.979
30
.005 .014
99.993
31
.002 .005
99.999
32
.000 .001
100.000
Extraction Method: Principal Component Analysis.
Rotation Sums of Squared Loadings

Total % of Variance Cumulative %
5.005 15.641
15.641
3.870 12.095
27.736
3.668 11.463
39.199
3.294 10.292
49.492
2.799 8.746
58.237
2.301 7.191
65.428
2.135 6.672
72.100
1.982 6.192
78.293
1.928 6.025
84.317
P a g e | 46
Rotated Component Matrixa

Component
1
2
3
4
5
Value Offering
.874
.026
.098
.215
-.028
Consumer
.857
.052
-.104 .129
-.072
Research
TV
.793
.002
.277
.334
.017
Promotions
.743
.388
.331
-.131 -.021
Promotion
.741
-.163 .326
.244
.066
Media
Competition
.636
.481
.156
-.087 .410
Digital Media
.494
-.205 .209
.083
.403
Socioeconomic
-.056 .924
.094
-.042 -.029
Place
.165
.826
.007
-.066 .232
Phy Evidence
.175
.802
-.298 -.087 .231
Product Nature
.429
-.478 .176
-.263 .174
Negative Mind-.178 .085
-.841 .009
.101
set Impact
Negative
-.204 -.069 -.753 -.130 .029
Perception
Radio
.412
.053
.673
.035
-.187
Process
.086
.375
-.629 .163
.263
Budget
.238
-.477 .484
.379
.090
Constraints
B2B
.114
-.035 .124
.949
-.006
Communication
Print Media
.221
-.156 .089
.773
-.021
Promotion
.550
-.080 -.071 .703
-.035
Frequency
Education
-.075 .329
-.281 .517
.413
Living Standard -.104 .155
-.111 -.088 .743
Innovation
.052
.291
-.441 .084
.671
Digital
.258
-.059 -.055 .573
.653
Penetration
Legal
.019
.111
.500
.076
-.135
Restrictions
Pricing
-.060 -.430 .045
-.034 -.045
Political
-.147 -.005 .042
.048
.051
Instability
B2C Clients
-.059 .110
-.222 -.050 .455
People
-.137 -.168 .001
-.202 -.205
Promotion
-.148 .154
.321
.190
.195
Message
B2B Clients
-.232 .323
.276
.249
.178
Product
.029
-.038 -.049 .020
-.067
New Policies
.037
.080
-.041 .039
.499
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalisation.
a. Rotation converged in 22 iterations.
6
-.030
7
.093
8
.140
9
.029
.256
.004
.159
.141
-.100
.098
-.187
-.209
-.152
.160
-.033
.055
-.221
-.223
-.088
-.241
-.277
.058
.096
-.189
-.148
.242
-.001
-.426
-.092
.067
.170
-.062
-.008
-.185
-.119
.149
.164
.475
-.065
.252
-.010
.046
.008
-.049
-.205
-.115
-.214
-.022
-.225
-.075
-.024
.182
-.146
-.073
-.107
.371
-.167
.063
.127
.247
-.058
-.212
-.116
.206
-.020
.028
.017
-.094
.350
.037
.080
.162
-.244
.045
.128
.041
-.337
-.027
-.160
.247
.026
.350
.085
.199
-.002
.007
.090
-.052
.077
-.190
.068
.045
.764
-.115
.130
-.083
.754
-.014
-.218
.001
-.030
.860
-.110
.169
-.334
.203
.529
-.099
.164
-.787
.340
-.061
.369
-.300
.641
.099
.254
.004
-.053
.396
.081
.191
-.504
.045
.021
.043
.927
.738
P a g e | 47
Appendix 5: List of Life Insurance Companies in Bangladesh

List of life insurance companies in the public sector
1. Jiban Bima Corporation
List of life insurance companies in the private sector

1. American Life Insurance Company (Foreign Company)
2. Baira Life Insurance Company Ltd.
3. Delta Life Insurance Company Ltd.
4. Farest Islami Life Insurance Co. Ltd.
5. Golden Life Insurance Ltd.
6. Homeland Life Insurance Company Ltd.
7. Meghna Life Insurance Company Ltd.
8. National Life Insurance Company Ltd.
9. Padma Islami Life Insurance Company Ltd.
10. Popular Life Insurance Company Ltd.
11. Pragati Life Insurance Ltd.
12. Prime Islami Life Insurance Company Ltd.
13. Progressive Life Insurance Company Ltd.
14. Rupali Life Insurance Company Ltd.
15. Sandhani Life Insurance Company Ltd.
16. Sunflower Life Insurance Company Ltd.
17. Sunlife Insurance Company Ltd.
18. Zenith Islami Life Insurance Ltd.
19. Mercantile Islami Life Insurance Ltd.
20. NRB Global Life Insurance Company Ltd.
21. Guardian Life Insurance Ltd.
22. Chartered Life Insurance Company Ltd.
23. Best Life Insurance Company Ltd.
24. Protective Islami Life Insurance Co. Ltd.
25. Sonali Life Insurance Co. Ltd.
26. Sawdesh Life Insurance Co. Ltd.
27. Diamond Life Insurance Co. Ltd.
28. Alpha Islami Life Insurance Ltd.
29. Trust Islami Life Insurance Co. Ltd.
30. Jamuna Life Insurance Ltd.
P a g e | 48
References
Reza, M. and Iqbal, M. (2007).Life Insurance Marketing in Bangladesh. Daffodil
International University Journal of Business and Economics, 2(2), 87-103
Rahim, O. (2013). Insurance Business and Khuda Bukshs Contributions. Journal of
the Asiatic Society of Bangladesh, 58(1), 157-189
Ali. M. (2006). Islamic Life Insurance: Its Features and Prospects in Bangladesh.
Insurance Journal, 57, 50-66
Fowzia, R. and Debnath, C. (2008). Performance Analysis of Insurance Companies in
Bangladesh: A Focus on Credit Rating. Retrieved March 10, 2015, from
http://dspace.daffodilvarsity.edu.bd/
Mamun, M. (2014).Performance and Financial Analysis of Fareast Islami Life
Insurance Company Limited. Retrieved March 10, 2015, from http://dspace.bracu.ac.bd/
Chowdhury, T., Rahman, M. and Afza, S. (2007).Perceptions of the Customers
Towards Insurance Companies in Bangladesh - A Study based on the Servqual Model.
BRAC University Journal, 4(2), 55-66
The
Insurance
Act,
1938.
(1938,
February
http://bdlaws.minlaw.gov.bd/pdf_part.php?id=175
26).
Retrieved
from
Alam, N. (2010). List of Insurance Companies in Bangladesh. Retrieved March 10,

2015,
from:
http://www.academia.edu/8029992/List_of_Insurance_Companies_in_Bangladesh_LIS
T_OF_NONLIFE_INSURANCE_COMPANIES_LIST_OF_THE_INSURANCE_COMPANIES_I
N_PUBLIC_SECTOR

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Challenges of Marketing Life Insurance in Bangladesh

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CHALLENGES OF LIFE INSURANCE

CHALLENGES OF LIFE INSURANCE MARKETING IN BANGLADESH:

13th June, 2015

Dr. Muhammad Ziaulhaq Mamun

Sarwath Hafiz Mumu

Gazi Md. Junaid Hossein

Rubyena Shabnoom Huq

Abreshmee Adeeba Haque

Ahmed Tashfiq Rafsan

3.5.1 Factor: consumer focus........................................................................................................ 28

1.1.2 Life insurance

Life insurance in Bangladesh is almost entirely provided by private insurance companies.

31. Executives of life insurance companies believe that innovation is an important

2.2 Sample Size

1.962 0.52 + 1550.052

1.962 0.52 + 155 2

2.8 Data Analysis

3.0 DATA ANALYSIS

1. Increase in Education level of general population will boost the

2. The Process of service delivery plays an essential role in life insurance

3. Improvements in general Standard of Living resulting from economic

4. Political Instability in the environment creates significant problems for

5. Product is important for life insurance marketing

6. Stakeholders (People) have an effect on the marketing of life insurance

7. Business-to-Consumer (B2C) communication is important in acquiring new

8. Negative Mind-set of consumers affects the sales of insurance policies

9. The Socioeconomic Environment of the country is a barrier towards the

3.1.2 Bottom 10 variables

1. Digital Media can play an important role in augmenting sales

2. Life insurance can be marketed successfully through the Radio

3. Level of Competition in the industry affects the scope of the industry

4. Policy Pricing is vital while marketing life insurance

5. The Nature of the Product is a limiting factor in the sales of policies

6. Promotion Frequency has an effect on the level of sales of policies

9. The Promotion Message used affects the response from customers

7. Providing Physical Evidence for the service that is insurance is important in

3.2 Hypothesis Testing

Hypothesis 2: Policy Pricing is vital while marketing life insurance.

Hypothesis 17: Business-to-Business (B2B) relationships are an important source of

3.3 Subsection Analysis

1. The Process of service delivery plays an essential role

2. Product is important for life insurance marketing

3. Stakeholders (People) have an effect on the marketing of life insurance

5. Physical Distribution of policies is an important factor

6. It is necessary for insurance companies to carry out Consumer Research in

8. The choice of Promotion Media will affect the effectiveness of insurance

9. The Promotion Message used affects the response from customers

10.Providing Physical Evidence for the service that is insurance is important in

11.Promotion Frequency has an effect on the level of sales of policies

12.Policy Pricing is vital while marketing life insurance

3.3.2 Group B: Marketing channels

Table 12: Marketing Channels

1. Business-to-Consumer (B2C) communication is important in acquiring new

2. Business-to-Business (B2B) relationships are an important source of clients

3. Print Media is an effective medium for life insurance marketing

4. TV is an effective marketing channel for life insurance marketing

5. Life insurance can be marketed successfully through the Radio

6. Digital Media can play an important role in augmenting sales

3.3.3 Group C: Variables affecting scope

1. Political Instability in the environment creates significant problems for

2. Negative Mind-set of consumers affects the sales of insurance policies

3. The Socioeconomic environment of the country is a barrier towards the

4. People have a Negative Perception about life insurance

5. Budget Constraints are a significant obstacle to the implementation of