Tk3,363 Crore Insurance Claims Pending as Settlements Stall

Despite insurance being designed as a financial safety net during accidents, fires, and business disruptions, thousands of policyholders in Bangladesh continue to face prolonged uncertainty as claim settlements remain alarmingly low. Official figures reveal that general insurance companies are struggling to honour claims on time, leaving billions of taka unpaid and eroding public trust in the sector.

According to unaudited data from the Insurance Development and Regulatory Authority (IDRA), general insurance companies settled only 7.55 per cent of total claims during the July–September 2025 quarter. This marks a further deterioration from the 8.32 per cent settlement rate recorded in the previous April–June quarter—a decline of nearly 9.25 per cent within just three months. The figures point to systemic weaknesses in liquidity management, financial capacity, and operational efficiency across the industry.

During the July–September quarter, total claims lodged with general insurance companies stood at approximately Tk3,637 crore, of which only Tk275 crore were settled. As a result, nearly Tk3,363 crore in claims remained unpaid at the end of the quarter, highlighting the depth of the crisis facing policyholders.

The prolonged delays have imposed severe financial and psychological stress on individuals and businesses alike. In many cases, policyholders have waited several years after policy expiry without receiving compensation. Such delays have significantly undermined confidence in insurance as a risk-mitigation tool.

The situation is particularly severe at the General Insurance Corporation (GIC), which settled just 3.37 per cent of its claims during the quarter, leaving Tk2,142.37 crore pending. A senior GIC official, speaking anonymously, said that around 80 per cent of delays stem from late submission of survey reports, which are mandatory for assessing losses. The problem is even more acute for reinsurance claims, where survey reports can take five to seven years, delaying settlements with foreign reinsurers and, in turn, policyholders.

Other insurers are facing similar challenges. Green Delta Insurance managed to settle 8.26 per cent of claims, leaving Tk266.54 crore pending. Company officials cited incomplete or legally invalid documentation as a major obstacle. Many policyholders fail to submit essential documents—such as police reports, fire service certificates, invoices, or ownership records—resulting in months-long verification delays.

Disputes over claim amounts, arbitration, court cases, and claims for uninsured perils further prolong settlements. Losses arising from political violence, excluded natural disasters, or gradual damage often fall outside policy coverage, leading to legal complications.

Additional pending claims include Tk157.91 crore at Pragati Insurance, Tk98.91 crore at Reliance Insurance, and Tk80.80 crore at Peoples Insurance Company.

Industry insiders argue that the crisis intensified in the second half of 2024 amid economic pressures but has been worsened by weak regulatory enforcement. Although the law requires claims to be settled within 90 days, compliance is rare. The mandatory reinsurance arrangement with Sadharan Bima Corporation (SBC)—which retains 50 per cent of non-life risks—also contributes to delays, as SBC often takes months to release its share.

Experts stress that restoring confidence will require coordinated action among insurers, reinsurers, regulators, and policyholders, alongside stricter enforcement by IDRA.

Snapshot of Claim Settlement Situation (July–September 2025)

Until structural reforms, faster survey processes, and stronger regulatory oversight are implemented, policyholders are likely to remain trapped in prolonged uncertainty—waiting months or even years for compensation that insurance policies promise but fail to deliver.