The country’s life insurance industry is currently grappling with a serious crisis. Public confidence in the sector has plummeted, largely due to mismanagement, corruption, and irregularities in five major life insurance companies. According to industry data, the total unsettled insurance claims across all 36 life insurance companies in the country amount to BDT 4,375 crore. Alarmingly, claims from just five companies account for BDT 3,829 crore, or approximately 87% of the total outstanding claims.
Experts warn that the mismanagement of these four to five companies is casting a long shadow over the entire sector. The Insurance Development and Regulatory Authority (IDRA) faces political and legal constraints that limit its capacity to take decisive action. As a result, specialists are recommending solutions aligned with international best practices. One key suggestion is that companies should sell fixed assets to expedite the settlement of customer claims.
According to the latest IDRA report, the total unsettled claims in both life and general insurance stand at BDT 7,010 crore. Life insurance claims account for BDT 4,375 crore, while general insurance claims total BDT 2,635 crore.
Unsettled Claims and Settlement Rates of Top Five Companies
| Company | Unsettled Claims (BDT crore) | Settled Claims (BDT crore) | Settlement Rate (%) | Remaining Claims (BDT crore) |
|---|---|---|---|---|
| Fareast Islami Life | 2,752 | 194 | 6.59 | 2,558 |
| Sunflower Life | 598 | 12 | 2 | 586 |
| Padma Islami Life | 249 | 10 | 4 | 239 |
| Bayra Life | 77.66 | 5.4 | 7 | 72.26 |
| Progressive Life | 165 | 28 | 17 | 137 |
In contrast, ten other companies have settled more than 99% of their claims. These include Alpha Islamic Life, Life Insurance Corporation of Bangladesh, Popular Life Insurance, Trust Islami Life, Chartered Life Insurance Company, Sonali Life, Mercantile, Sandhani, Meghna, and Rupali Life Insurance.
IDRA Deputy Director Md. Solaiman emphasised the urgency of action, stating: “Our primary focus is to ensure that companies settle customer claims promptly. For those that fail to comply, we will mandate the sale of fixed assets to guarantee claim payments.”
Economist Professor Abu Ahmed added, “Trust is the most critical factor. To restore public confidence, IDRA must adopt international standards while reassessing the efficiency of the sector and the number of operating companies.”
In summary, stabilising the country’s life insurance industry will require swift and decisive measures. Prioritising the settlement of customer claims, especially through the liquidation of assets in poorly managed companies, is essential. Without such intervention, public trust will continue to erode, with potential repercussions for the broader national economy.