Bangladesh’s insurance sector has witnessed a landmark regulatory shift as the Insurance Development and Regulatory Authority (IDRA) has scrapped all agent licences and banned commissions in the non-life insurance sector. Announced on 7 January 2026, this directive prohibits non-life insurers from deploying agents for premium collection, signalling one of the most substantial reforms in the country’s insurance market in recent years.
According to IDRA, all 45 non-life insurance companies operating in Bangladesh are now barred from paying commissions to agents. Any deviation from this rule will invite strict punitive action, ensuring comprehensive compliance across the sector. The decision aims to address long-standing structural weaknesses, particularly the over-reliance on commission-driven sales that have often compromised underwriting quality and policyholder protection.
Industry insiders note that the non-life insurance market in Bangladesh is relatively small, and excessive commission payments were a common tactic to secure market share. While this strategy increased premium volumes in the short term, it undermined pricing integrity, risk assessment, and timely claim settlements. In 2023, the claim settlement ratio for non-life insurers was only 35.54%, compared with 81.5% in the life insurance sector, highlighting significant operational inefficiencies.
The IDRA Annual Report 2023-24 reveals that globally, the non-life sector accounts for 59.8% of total insurance premiums, whereas in Bangladesh, life insurance dominates, collecting BDT 123 billion ($1.1 billion) in premiums, compared with BDT 60 billion for the non-life sector. Analysts emphasise that commission-led growth was a major contributor to these imbalances, encouraging insurers to focus on volume rather than sound underwriting practices.
IDRA’s reform is expected to redirect insurer priorities towards robust underwriting, accurate risk evaluation, and timely claims settlement, gradually restoring market discipline and enhancing consumer confidence in the non-life insurance sector.
The following table summarises the key metrics of Bangladesh’s insurance market in 2023:
| Aspect | Life Insurance | Non-Life Insurance |
|---|---|---|
| Premiums Collected | BDT 123 bn | BDT 60 bn |
| Market Share | 67.2% | 32.8% |
| Claim Settlement Ratio | 81.5% | 35.54% |
| Agent Commission Status | Allowed | Scrapped from Jan 2026 |
Experts describe the regulatory overhaul as a turning point for non-life insurers, signalling a move towards sustainable growth, stricter compliance, and enhanced protection for policyholders. With this reform, Bangladesh aims to align its non-life insurance market with global best practices, ensuring long-term sectoral stability and consumer trust.