Bangladesh’s insurance regulator distributed claim cheques worth Tk 14.51 crore to 2,549 policyholders on September 3 – an event that looks routine on its face but points to a market where the claims process has deteriorated badly enough to require the regulator to step in directly.
Insurance Development and Regulatory Authority (IDRA) chairman Mir Nadia Nivin handed over 94 cheques at a ceremony in Dhaka on behalf of seven life insurers: BAIRA Life, Fareast Islami Life, Golden Life, Homeland Life, Padma Islami Life, Progressive Life, and Sunflower Life. In a functioning insurance market, regulators do not distribute cheques. Insurers do. The fact that IDRA is doing so is itself the story.
About 12 lakh policyholders remain unpaid across Bangladesh’s life insurance sector, with 32 companies struggling to clear dues and seven recording the lowest settlement rates. Unsettled claims had grown to Tk 4,403 crore as of 2025, according to The Daily Star. Life insurance claim settlement rates have dropped from 85% in 2020 to 66.06% in 2025, per IDRA data – against a global average of around 97% to 98% and India’s approximately 98% in FY2022-23.
The non-life segment is worse. General insurers settled only Tk 372 crore out of Tk 3,971 crore in claims filed between October and December 2025 – just 9.37% of the total. Across all of 2025, only 25% of non-life claims were settled, leaving Tk 3,509 crore outstanding across 46 companies. Several multinational firms have reportedly scaled back or withdrawn insurance coverage in Bangladesh over delayed settlements.
A significant portion of the delay traces to the state reinsurer. In the October-December 2025 quarter, state-owned Sadharan Bima Corporation settled only Tk 77 crore of Tk 2,264 crore in claims – 3.41% of the total. Delays by the state reinsurer frequently prevent primary insurers from paying policyholders on time, trapping claims in a chain involving surveyors, insurers, reinsurers, and regulators. By law, insurers must settle valid claims within 90 days. In practice, that deadline is regularly missed.
Speaking at a sector seminar in June 2026, Professor Dr Md Shahidul Islam Jahid, chairman of the Department of Banking and Insurance at the University of Dhaka, identified weak regulation, poor governance, and a short-term profit mentality as the sector’s central problems, according to The Business Standard.
At the same event, Prime Minister’s Adviser on Finance and Planning Rashed Al Mahmud Titumir said many insurance companies lack the asset management and investment capabilities needed to function, with the life insurance segment facing particularly serious difficulties. “The insurance sector needs a strong, effective, and market-friendly regulatory framework to ensure accountability, protect policyholders, and expand insurance coverage,” he said.
Fahmida Khatun, executive director of the Centre for Policy Dialogue – an independent economic research body – said in February 2025 that reforming the sector means more than changing IDRA’s leadership and issuing guidelines. “The existing problems should be identified, and bottlenecks should be removed,” she said, as reported by The Daily Star.
The September 4 cheque distribution sits within a broader enforcement push under IDRA’s new leadership. The regulator is liquidating assets of financially distressed insurers – including fixed deposits, government treasury bonds, and land – to fund outstanding payouts.
“The first priority is to start settling pending claims as quickly as possible. Once policyholders begin receiving their dues, confidence in the sector will gradually return, making it easier to stabilise the industry,” Nivin said at a media briefing in July.
One key constraint on IDRA's enforcement reach is legislative. The government drafted the Insurer Resolution Ordinance 2025, which would allow IDRA to liquidate insurers, impose fines of Tk 1 crore, and pursue up to seven years’ imprisonment against responsible directors and officers.
Nivin has acknowledged that under existing law, IDRA cannot recover penalties from directors’ personal assets – the gap the ordinance was drafted to close. As of publication, its enactment status had not been confirmed. Without it, IDRA’s enforcement tools stop at the company level, leaving individuals responsible for fund misuse legally insulated from personal liability.
Performance across Bangladesh’s insurance sector varies widely, and that variation is where the practical implication sits for brokers. IDRA data showed that Bangladesh’s life insurers settled 66.06% of claims in 2025, down from 85% in 2020. Separately, MetLife Bangladesh reported a 98% claims settlement ratio for the year, one of the highest in the market. The difference highlights the importance of examining individual insurer claims performance when assessing carrier risk.
IDRA classified 15 of Bangladesh’s 36 life insurers as high risk in July 2025, with only six considered to be in good standing and the remaining 15 classified as medium risk. The classification, based on IDRA’s internal grading system, provides an important data point for brokers assessing the financial and claims-paying risks of Bangladeshi carriers.
Bangladesh’s insurance penetration stood at approximately 0.33% of GDP in FY2024-25, per the Bangladesh Insurance Association – the lowest in Asia, well below India’s approximately 4% and Vietnam’s above 2%. The claims backlog is not separate from that figure. It is one of its causes. The September 4 ceremony is modest in scale. The data behind it is not.
