Managing a life insurance company can be a real hectic task. Ahsanul Islam Titu, the young Managing Director of Sandhani Life Insurance however is doing that in a ‘zen mode’ for over a decade.
The magnificent view of Hatirjheel and surroundings from his office at Sandhani Life Insurance headquarter in Bangla Motor area of the capital aids him to keep his calm and gives him much needed respite during a busy day.
“Yes, that’s a good view. Office buildings in Dhaka barely have views like that,” he said when Fintech went there to take his interview.
Titu talked about the changes he brought in his company after he had taken charge. He also talked about the massive technological transformation that is in the offing in the insurance sector.
FINTECH: Can you tell us how it began-your career in the insurance sector? Were you in this field from the very beginning of your career?
AI Titu: I wasn’t a man of insurance from the very beginning of my career. I studied banking and finance and I majored in risk management. While studying risk management, I began to grow my affection for capital management and hedge fund. While these are big in the Western economy, Bangladesh is yet to pick up with these financial institutional forms. So I started concentrating on insurance sector. The knowledge of risk management is integral in the insurance sector so I had the chance to apply my knowledge here.
Life insurance is all about managing fund; in fact its very success depends on a good strategy of supervising fund. Initially, I used to do fund management only. Later, I started supervising all the risk managing activities and finally the responsibility of managing the entire operation.
FINTECH: Since when?
AI Titu: I am the Managing Director since 2007 but I joined here in Sandhani Life Insurance Company in 
1992.
FINTECH: That means you are running this company for over a decade. What are the main challenges you face running this company?
AI Titu: Well, since 2007, the company has undergone some major changes. This is because; the whole insurance sector has undergone same ones. There were number of regulatory changes that our company has to comply and adopt with.
The insurance sector was once under the Ministry of Commerce but later it was brought under the Ministry of Finance. Previously the insurance sector was regulated through the Directorate of Insurance. Later in 2010, the Insurance Development and Regulatory Authority (IDRA) was formed as per the Insurance Company Act 2010. I call this a major shift because the insurance sector has long been governed with the old policies of 1958. We are still being governed by a lot of rules of that age old policies but the new act of 2010 has modernized the sector to some extent.
The insurance sector was once under the Ministry of Commerce but later it was brought under the Ministry of Finance. Previously the insurance sector was regulated through the Directorate of Insurance. Later in 2010, the Insurance Development and Regulatory Authority (IDRA) was formed as per the Insurance Company Act 2010. I call this a major shift because the insurance sector has long been governed with the old policies of 1958. We are still being governed by a lot of rules of that age old policies but the new act of 2010 has modernized the sector to some extent.
So, I believe that the changes were brought in for the good of the sector. The changes helped companies like Sandhani to do better than others because it believes in compliance.
FINTECH: What happened to your competitors? Do they bring changes as well?
AI Titu: I cannot speak on behalf of other companies. But I can tell you that, after I had taken charge, what I found about the other insurance companies shocked me.
Usually what we do in the insurance sector is- we save the small savings as premiums and we return it interest after its maturity period which is usually 10-12 years. So basically you are keeping money for a period of time after which you will have to return it to the lender. However I came to know that the people working in these insurance companies are not really aware of this fact. They 
considered this premium money as their income but I had this in my mind that if I start spending from this, then I might not be able to return the money in time. So, I had to struggle a lot to regulate that practice because that was even prevalent in my company The other major challenge lied in collecting insurance money from all over the country. Insurance companies usually operate through small collection units over a geographically disperse area. Therefore collecting money from many small units over the entire country was quite challenging. Besides, the challenge of collecting money itself, there was the challenge of fraudulence practices. To stop that practice, I had to start using holograms in money receipts so that the receipts cannot be duplicated. Later on, since I was always adept with the latest technological trends, I planned to digitalize the entire operation of the company. I was being able to do that after trying for a while. Now I can tell you that this is the only life insurance company in the country which can be called ‘fully digitalized’ in real sense.
FINTECH: Can you explain the concept, “fully digitalized?”
AI Titu: Fully digitalized basically means running a paperless insurance company. This is quite a phenomenal change I say, because, if you are familiar with the insurance sector of the country, you would know that almost everything here still relies on paper. Earlier, there were money receipts given against each transaction which were called premiums or annual receipts. Now these money receipts has been transferred into computer generated receipts. Another digitalized change in our company can be seen in case of bill payments which were manually calculated previously. Now this is totally automated; our computers are doing all the calculations and generate bills without making any errors and mistakes.
FINTECH: Is this something like an entire change in the core system of banking?
AI Titu: Sort of. To develop core banking software, definitely a software company has to do the coding but its business rules, specification and procedures have to be provided by the bank’s management. Same happened here. Our core software was designed by a software company but the core design was provided by the management. Specifically, I provided most of the design input as I had this whole plan of the system in my mind.
FINTECH: Was the core software of your company designed by a local software company?
AI Titu: Yes. The big banks of our country are still purchasing software from outside the country and trying to apply them into our country’s context. But, let me tell you the truth that most of the functions of these software remain unused, so there is no point of bringing foreign software at a high cost. Besides, the after sales services and maintenance services of those software companies are terrible. So, from the beginning, I opted for local software companies and the software that they developed for me is fantastic.
It has been able to change our operation completely. Now with that core system in place, ‘anyone from anywhere can do it’ only if s/he has internet access. I think it’s kind of a revolution for our company because it has not only increased our profit by reducing operational cost but also bring unprecedented efficiency and transparency in our entire company’s operation. This is not it. We are planning to have cent percent digitalized look. From June this year, we are going to launch ‘i-life’-a complete digitalized way of doing insurance.
FINTECH: What is this ‘i-life’? An app?
AI Titu: Yes. It’s an android based app which you will be able to access with the help of a smartphone. When you open the app in your phone, you will feel like that ‘everything is just few clicks away’. The customers will be able to learn about his insurance directly through this app without needing any help from real person.
At present, customers are still getting the digital service but are being given like the way digital banking service is being provided. But ‘i-life’ will not be like that. It will give customers the true digital experience. They will be able to deposit money digitally, as well as will be able to monitor the transaction that will take place.
The platform for smooth operation of ‘’ has already been set up. We have already laid comprehensive digital network in the country. Now by sitting in front of a computer in my office, I can monitor how much money is being collected across the country. With ‘i-life’, I will be able to do that in my phone instead of my computer. This will develop more mobility and advantages.
FINTECH: That means, you will not need the large amount of manpower that you are needing now for the collection of insurance premium and other things?
AI Titu: To be frank, I won’t be. We have been actually going under a transition period of two years; the transformation process is undergoing a shift from manual to automation. So dual working activities are going on where there are things which are still left to be digitalized and which will soon be automated as well.
Of course, if we can be truly digitalized with the launching if ‘i-life’, we will be able to give our customers the provision to do the policy from any point. They will just open the app in their phone and input the policy number. Instantly they will be able to know about the premium. This will also make our jobs easy. For example, if we have to claim-which is by the one of the most difficult task for an insurance company, we now need at least 7-15 days as we have to get the papers and to verify them. But with the true digitalization, we will only need the policy number card as all sorts of identification and transaction are recorded in digital manner in that card.
FINTECH: What actually motivated you to do this? I mean this is a big shift, a big responsibility and a sort of hassle as well. So is it because of the cost effectiveness?
AI Titu: No, not really. My motivation for a complete digital transformation did not simply emerge out of the idea that we have to reduce the operational cost. I had a different perspective all together. Let me clarify. I got back in Bangladesh in 1993 from abroad after finishing my studies. At that time, I had a PowerBook with me. It was something new at the time and very few people were actually familiar with the gadget. The internet was also very new at that time. I was using dial-up connection. I am telling you this because I am trying to give you a perspective about my philosophy. I am always comfortable if I have ready access to data and information. This is because data and information empower you. It aids you to take decision in a much more efficient manner.
Reducing manpower and overhead through digitalization was never my first consideration. Let’s be frank, Bangladesh still has plenty of cheap labor even for a white collar job like insurance company. So my main concern was to have a better, refined and controlled decision making policy.
I didn’t apply my philosophy only to this company. When I was a director of Dhaka Stock Exchange (DSE), I applied to that in the DSE as well. I worked in digitalizing the DSE. Now if you go to DSE’s website or open its app in your smartphone, you will see that everything can be done in digital manner. You can do live trading; you can buy and sell; you can monitor index’s movement, yearly movement and know the portfolio value. That digitalization of DSE motivated me to bring changes in my insurance company and I have been successfully able to do that.
FINTECH: In our country, there has always been a negative connotation linked with the insurance companies…whereas people have positive connotations about banking Why that?
AI Titu: In Bangladesh, we still have problem of finding qualified people in the insurance sector. This is primarily because of the relatively low salary here. The banks are giving a starting salary of Tk 35,000 whereas in the insurance sector, most of the companies cannot afford to give more than Tk 12,000 as the starting salary. So the best business graduates go for the banking sector.
There are reasons though. In case of banks a single person can give an output which several persons in the insurance sector have to bring. That means, if a bank can have a business worth of Tk 2 lakh through a single employee, in the insurance company, we have do it through three employees. That’s why the salary is low here. With digitalization, things however are changing now. We have started to give Tk 25,000 as salary and we have already hired some good manpower. In future, we believe to bring more positive changes.
