Wafi Shafique Menhaz Khan, Managing Director & CEO at Green Delta Securities Limited and DMD & Head of Retail, SME & Micro Insurance at Green Delta Insurance Company Limited, on his personal journey to what he is doing today, the influence of his early childhood experience on his work, talks about his work as the DMD & Head of Retail, SME & Micro Insurance, Green Delta Insurance Company Limited, Green Delta’s business in retail insurance space, Green Delta’s plans in retail, SME and micro Insurance space, how Green Delta is pushing its retail insurance business with innovative products and distribution strategy, challenges for GD’s retail insurance business and ambition for the segment going forward, how Green Delta Insurance is working on solving distribution and awareness problem in the market, his lessons from his journey so far and why patience is the most effective antidote to life’s challenges and difficulties.
This was a much longer interview, so we had to break it up into two parts. This is the part one, please check us back later this month for the second part of the interview or subscribe to our weekly newsletter to get our stories directly in your inbox.
Future Startup
Thank you for agreeing to do this interview. What is your background? Could you please tell us about your journey to what you are doing today?
Wafi Shafique Menhaz Khan
I was born in Dhaka. I grew up in different parts of the country as my father was posted from one city to another during his tenure as a military officer. I studied at 10 different primary and high schools. I had my first experience in sales pretty early in life. After my HSC exam, I had some free time, so I decided to utilize the time doing a part-time job. Albab bhai and Andalib bhai, who were very successful businessmen, launched the first Hallmark Greetings Card House in Bangladesh. Seeing the opportunity to work in a new venture I grabbed it and started working as a part-time Sales Officer. The two brothers gave me hands-on training on how to successfully interact with customers. It was a fun learning experience for me which later paved the way for my bigger successes.
Growing up I had ambitions but working in the insurance industry was never one of them. I always wanted to join the army, which you could say, was my dream career. In fact, that's what I really did initially, I joined the military after my HSC but unfortunately couldn’t pursue my career in Military due to some unforeseen events. It was back in 1997. At first, I felt quite hopeless after being left out of the army eventually. It was a difficult time, but eventually, I came out of that gutter and started pursuing other ambitions.
Long story short, my journey into the world of corporate and sales has an interesting beginning as well. One day one of my seniors who was a senior relationship manager at ANZ Grindlays Bank at that time asked me to drop a CV. He knew me since we both lived in the same building at that time. So when a sales officer position opened up at the bank, he told me to give it a try. I did what he said and was soon called for an interview. Interestingly, that was my first and last interview. It lasted for over an hour and I was put through every type of tests. Since it was a sales position, they were basically testing my patience which I later found out. The next morning, Zakir Hossain, heading the HR team at that time, called up at 9 o'clock and asked me to accept the appointment letter. And that's how, in 2000, my professional career began.
Two years after I had joined ANZ Grindlays, Standard Chartered Bank acquired the bank's entire Bangladesh operation. I wasn't very happy with the change. As a banker, I loved challenges and to explore new areas. I didn't like to abide by outdated traditions. I left the company and joined BRAC BANK where I worked till 2003. Then I worked at the American Express Bank which coincidentally was also bought by Standard Chartered in 2004. After leaving American Express, I was again invited to rejoin BRAC Bank. It was quite surprising because they had a strict policy that prohibited the reappointment of anyone who leaves the organization. But they made an exception for me. In this phase, I stayed with BRAC Bank for four years.
Afterward, I came across an opportunity at the City Bank and joined there. The City Bank, like BRAC Bank a few years ago, had just started its operation and it offered an excellent learning opportunity. I was given the responsibility to build a strong foundation for its sales business. I started at The City as Senior Assistant Vice President & Head of Sales and when I left City in 2011 I was Vice President and Head of Non-Funded Business for the City Bank. We worked really hard at the City Bank in those early days. I had the opportunity to work with a stunning team. Fortunately, our hard work paid off and if you look at The City Bank now you'll see the proof.
Up to this point, my area of interest was core banking. I had always been a salesperson. I had been a branch manager, head of sales, and so on. I had never worked for, say, an operation team. So, when Green Delta Securities offered me a job in 2011, I was a bit surprised. Eventually, though, I accepted their offer. Given the contemporary market condition--the boom at the end of 2010 and the sudden crash at the stock market in the subsequent period, it was something of a challenge. But, as I said, I'm not the type of person who shies away from risks and challenges. So, I started my journey at Green Delta Securities in June 2011. Some of my friends asked me why I was entering into an industry which was under a lot of pressure; to which I replied that it was the best time to enter. Also, there was the attraction of holding a CEO position at such a young age.
Fast forward to 2014, the Managing Director and CEO of Green Delta insurance Ms. Farzana Chowdhury, told me to look after retail insurance department given my experience in retail banking in launching innovative new products like liability products, loan products and debit, credit cards.
At that moment, there was no specific team committed for the job. So, I supervised the formation of a new team for a new department which we call retail, SME, and micro-insurance. Now, in addition to my responsibilities as the CEO of Green Delta Securities, I also look after that part (retail, SME, and micro-insurance) of our operation.
Although initially a lot of confusions gathered up in my mind about taking up the responsibilities of Retail Insurance department but after talking to the Founding Managing Director and Advisor of Green Delta Insurance who is the living legend in the insurance sector of Bangladesh, I felt confident about taking up this challenge and creating a disruption in the market.
There are many connections that I can see today. But I would mention one apparent connection between my past and present. I think that constantly being transferred from one school to another has helped me to build my ability to befriend new people which, in turn, sharpened my sales skills. Sales, you see, is all about relationship. I received a long training on making friends when growing up which I believe helps me even these days.
Future Startup
We have more questions related to your work, before that, I would like you to go back to your childhood, you said you had an interesting childhood, you attended 10 different schools. How has your early childhood experience influenced the way you look at life and work?
Wafi Shafique Menhaz Khan
There are many connections that I can see today. But I would mention one apparent connection between my past and present. I think that constantly being transferred from one school to another has helped me to build my ability to befriend new people which, in turn, sharpened my sales skills.
Sales, you see, is all about relationship. Every new relationship you make with a potential customer opens the door for a new business opportunity. I received a long training on making friends when growing up which I believe helps me even these days.
Future Startup
Could you please briefly tell us about your work as the Head of Retail SME, and micro-insurance? What is the current penetration of insurance in the market and to what extent does it contribute to the economy?
Wafi Shafique Menhaz Khan
As far as insurance is concerned, the gross penetration is less than 1%; and, as for, retail insurance, it is less than 0.5%. This is due to a massive lack of awareness about insurance among people. Sell of retail insurance by life insurance companies has led to it. Also, illegal practices such as offering larger discounts than legally permitted have also hampered the credibility of the insurance companies in the eyes of the public.
In the insurance sector, we (meaning the overall insurance industry, not the Green Delta alone) have been selling only one product for time immemorial: life insurance. We ignored other opportunities like health insurance that would help people in many different ways. To move from this stalemate, we need to work together as an industry. We need to repackage our products and promote to our young, new-age customers in a way that caters to their unique test and lifestyle.
Nowadays, there is a tendency among customers to believe that they must get some benefit in return for the price they pay, whatever amount that might be. Say, for example, you subscribe to a fire insurance and you want some benefit. In that situation, I can’t really ask you to go and burn up the insured asset so that you get the compensation. That's why people look for other value-added services. We need to adopt such services in our industry.
For example, in the case of health insurance, we may provide for free checkups for our subscribers at specified clinics or we can allow for discounts on medicine purchases at predetermined pharmacies. These are some of the things we have already started doing at Green Delta Insurance Company Limited. We have launched a healthcare product that comes with added benefits, we have taken initiatives to make the process of availing insurance easier. With the retail, SME, and micro-insurance, our ambition is to serve as many people as possible.
Lack of awareness among people and absence of an efficient distribution channel are two major challenges for our business. Another key challenge concerns policy. We need the help of the government and the regulators in order to reach out to people. There are some new policies that need to come to effect and some old ones that need to improve; for instance, e-signature, which would make the distribution a lot easier for us.
Future Startup
What major retail insurance products GDIC is offering now?
Wafi Shafique Menhaz Khan
I feel proud to let you know that we are the first company to introduce a comprehensive insurance policy directed only toward the women in Bangladesh. Nibedita - our insurance policy for women - is one of the first of its kind in South-east Asia as a whole. It covers female health, demise, assets (e.g. jewelry), trauma allowance (e.g. acid and rape victims) and much. Nibedita also has an emergency call system which a subscriber can access whenever she is in danger by pushing the panic button on our app. If you have the app on your phone, you can use the emergency service by pressing the panic button. The app will send messages to your close ones with your geo-location. We also provide assistance of private security forces through our partnership with Elite Security Force.
Nibedita has other unique features as well. If you subscribe to the service, you'll receive special interest rates on loans to start a new business from our partner financial institutions. Nibedita customers also get discounts in our partner lifestyle shops, such as Persona and Diamond World and many more. That, we think, is a great opportunity for our clients since Nibedita costs only Tk. 588.
We have motor insurance. There are two types of motor insurance: third-party policy and first-party policy. Anyone in Bangladesh who buys a motor vehicle is legally bound to insure it. If you don't, you won't be able to get other permits for your automobile. In these cases, people usually take the third-party policy which holds a third party liable for any damage.
Others who buy motor vehicles with borrowed money (Bank loan) mostly take up the first-party policy because banks require them to do so. People who subscribe to this policy can get their vehicles towed as well.
Our motor insurance comes with a lot of extra benefits. For instance, we have partnered with Vroom which has garages and servicing centers almost all over the country. If you take our service, you get preferred servicing at Vroom centers across the country. We have a partnership with vehicle tracking companies. Through our contract with a VTS company, you can also avail tracking devices for your vehicle at an attractive price.
Let me explain how badly people lack awareness of insurance. Say, you have taken a Tk. 100,000 insurance policy which will cover you for permanent physical disability and death. Can you guess how much insurance premium (yearly) you need to pay for that? Only Tk. 74 and that includes VAT and stamp fees. This is within the means of people from almost all walks of society. Even then, you won't see many people buying insurance policies. They would buy a pack of cigarette or eat junk food at a fancy restaurant, but they won't spend a single penny to safeguard future uncertainties. This situation exists precisely because of a dire lack of awareness of the insurance industry.
As a matter of fact, at times when I get on a rickshaw or go to the barber's, I ask the rickshaw-puller or the barber whether they have ever heard about insurance and whether they know how it can benefit them. And, surprisingly, I have got mostly positive responses from them. They seem genuinely interested in taking out insurances. But how do they get access to the service? This is where a major bottleneck exists.
Insurance companies in Bangladesh do not have strong distribution channels via which they can reach out to their customers.
The reason behind the success of big shots like bKash, Grameenphone or Unilever is their powerful and widespread distribution channel. At present, banks and MFS are fanning out their services not by building more branches, but by deploying agents across the country. I believe that we can make insurance popular following the same strategy - spreading our service through agents.
We have a digital insurance platform. We have seen that only urban and suburban clients access our services through digital mediums. A vast majority of TG is in rural areas where digital isn't effective. We need human agents there. For that, we will have to set up training centers for the agents in different parts of the country.
Paying insurance claims is a concern here. The process needs to be easy and smooth. The agents should be responsible for settling the claims on behalf of the insurance company as well. In fact, they will earn commission on both ends--when customers pay insurance premiums and when the company makes the claim settlement. In this regard, it'd be more convenient if there were a third-party verification system (TPAs) in place.
People are also interested in travel insurance nowadays. Everyone travels these days. Data from the immigration authority suggests that 10,000 people fly and sail abroad from Bangladesh on a daily basis. This is why we see a growing number of customers are taking our travel insurance package.
Because, first, by paying just a few thousand taka, you'd be converted for USD 50,000. Furthermore, you get a range of extra benefits like compensations for delayed flights, lost baggage, and so on.
For fast and convenience of our customers, we provide digital access to all of our services. Our clients can visit our websites or log into our app whenever they like and get our services as they choose.
We have an innovative product coming along very soon which I can't disclose right now. What I can tell you is that we are hopeful that it'd start a revolutionary change in the industry by reaching out to the mass market.
The reason behind the success of big shots like bKash, Grameenphone or Unilever is their powerful and widespread distribution channel. At present, banks and MFS are fanning out their services not by building more branches, but by deploying agents across the country. I believe that we can make insurance popular following the same strategy - spreading our service through agents.
Future Startup
Who are your target group for retail and micro-insurance?
Wafi Shafique Menhaz Khan
Ideally, we want to bring every adult in the country and, through them, their families within our insurance net. We always work toward that goal.
For example, in 2015, the government introduced a health insurance scheme called Sasthya Surakkha Scheme. The pilot project began in the Kalihati Upazila and within two years spread to two nearby Upazilas.
GD is proud to act as the key implementation partner of this project where we have been able to insure more than 400,000 people including those who are below the poverty line. This means everyone could be brought under the insurance. Insurance is not as expensive as many people would view. It is way more beneficial compared to what you pay for a policy.
If you look at our RMG industry, there are 7 million workers. If we assume 3 members per family on an average, there are 21 million people. And these people are prone to serious health hazards. But most of them don't even know about the benefits of taking a health insurance. They made out-of-pocket healthcare expenditure indiscriminately. We can effectively serve these people under our micro-health insurance scheme.
So, the target audience for us is broad and it is a matter of reaching out and awareness.
Future Startup
You mentioned that current insurance penetration in the country is a very insignificant number which means there is a huge room for growth, what are the challenges to the growth of insurance?
Wafi Shafique Menhaz Khan
Lack of awareness among people and the absence of an efficient distribution channel are two major challenges for our business. Another key challenge concerns policy. We need the help of the government and the regulators in order to reach out to people. There are some new policies that need to come into effect and some old ones that need to improve; for instance, e-signature, which would make the distribution a lot easier for us.
Moreover, GD can't bring any major change in the field alone. For that to happen, the industry needs to march together. The industry dynamics need to improve.
Be patient. If you want to leave your mark there is no way other than being patient. Anything worthwhile takes time to achieve. There will be challenges. The only way you can overcome challenges and get to your destination is through hard work and patience.
Future Startup
What are your plans for the future?
Wafi Shafique Menhaz Khan
We have a company-wide plan which we call Vision for 2021 which we want to achieve within the next few years. One of the priorities for us to get the distribution right, both digitally and otherwise.
We are working on new ways of distribution which will revolutionize the insurance industry. It will help us to get in touch with people from all walks of life and serve more people with our insurance policies. This is critical for us because it is how we can go to the next level in terms of growth.
Future Startup
What are some lessons you’ve learned?
Wafi Shafique Menhaz Khan
Well, to survive in this market, you have to be focused, creative and consistently innovate. Nurture a competitive mindset and always try to think ahead of your competitors.
On a personal level, be honest and humble. Don't be swept away by pride. Let others talk about and appreciate your efforts.
Be patient. If you want to leave your mark there is no way other than being patient. Anything worthwhile takes time to achieve. There will be challenges. The only way you can overcome challenges and get to your destination is through hard work and patience. Take, our retail and SME department, for example. The year we began, we could not even achieve 10% of our objective. The next year, we could achieve only 25%. But we were able to hit the 95th percentile by the third year. This is why I believe you need to be patient to be successful in life. Keep at it. Diligently put your hard work into it.
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Interview by Ruhul Kader, Transcription by Rahatil Ashekan
