Page 8 - The Insurance Times October 2024

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ECGC Downgrades Bangladesh to 'Moderate Risk' AI Could Revolutionize
Amid Political Instability Railway Safety and Effi-

The Export Credit Guarantee Corporation (ECGC) has reduced Bangladesh's ciency
country risk classification from "B1" (moderately low risk) to "B2" (moder- Artificial intelligence (AI) has the po-
ate risk) due to the recent political unrest that resulted in a regime change. tential to significantly improve safety
This downgrade will raise the insurance premiums exporters need to pay and operational efficiency across
for coverage on goods and services bound for Bangladesh. Despite this, India's vast railway network. AI's abil-
Bangladesh remains within the "open cover" category, which allows ex- ity to automate obstacle detection in
porter-policyholders to obtain insurance on more favorable terms. real time, using onboard sensor data,
could prevent accidents by identifying
India's exports to Bangladesh amounted to $11.065 billion in FY24, repre-
senting 2.53% of the country's total exports of $437 billion. In a communi- and responding to potential hazards
cation to banks and policyholders, ECGC stated, "It has been decided to more effectively than current systems.
modify the risk classification of Bangladesh under short-term and medium- This application of AI could dramatically
to-long-term with effect from 08.08.2024." enhance the safety of the millions of
passengers who rely on Indian Railways
According to ECGC's FY23 annual report, Bangladesh was one of the top daily, offering a major technological
five countries for business underwritten by ECGC, alongside Cameroon, Laos, upgrade to the country's railway infra-
Nepal, and Saudi Arabia. Bangladesh also accounts for approximately a structure. As AI technology advances,
quarter of the $32 billion concessional lines of credit extended by the In- its role in ensuring safe and efficient rail
dian government.
travel is expected to expand.

Government Mulls Over regulations, such as the requirement for Road Accidents Respon-
Indian nationals to hold key manage-
100% FDI in Insurance as ment positions, are also under review. sible for 43% of Uninten-
Political Considerations The government has yet to set a tional Injury Deaths, Says

Continue timeline for these amendments, but Health Ministry Report
The government is currently in discus- the department for promotion of in- A new report from the Ministry of
sions to raise the foreign direct invest- dustry and internal trade is conducting Health has revealed that road acci-
ment (FDI) limit in the insurance sector a sectoral review to encourage unhin- dents accounted for over 43% of unin-
from 74% to 100%. While the sector dered investments. The insurance in- tentional injury deaths between 2016
regulator is in favor of this change, the dustry remains one of the few con- and 2022, excluding the pandemic pe-
proposal requires political clearance due sumer-facing sectors that is not fully riod. Sudden deaths, drowning, falls,
to the need for amendments to the In- open to FDI, in contrast to other indus- and burns were also significant con-
surance Act. Other proposals to ease tries that have liberalized. tributors. In 2022, the proportion of

The Insurance Times October 2024 7