Bangladesh’s life insurance industry is increasingly being defined by unpaid claims, weak enforcement, and a growing divide between compliant insurers and chronically failing firms. While dozens of companies operate in the market, recent data show that a small group of insurers is responsible for the overwhelming majority of unpaid claims, threatening the stability of the entire sector.
During the first nine months of the year, life insurers across the country received nearly Tk 6,000 crore in claims. Yet only a third of that amount was paid. The remaining Tk 3,880 crore remains outstanding, leaving thousands of policyholders waiting for funds that often represent life savings, retirement plans, or death benefits for bereaved families.
The concentration of unpaid claims among seven companies is particularly concerning. Collectively, these insurers account for Tk 3,571.90 crore in unpaid claims, or more than 90 per cent of the sector’s arrears. Their continued operation without meaningful corrective action has prompted calls for regulatory intervention and even forced mergers.
Far East Islami Life Insurance alone accounts for more than Tk 2,500 crore of the unpaid total. IDRA officials acknowledge that the company has virtually no liquid funds left, raising the question of how it continues to operate. Similar concerns apply to several other underperforming firms whose premium income appears to have been depleted through poor investment decisions or misappropriation.
By contrast, a number of insurers have maintained disciplined financial practices. MetLife Bangladesh paid Tk 769 crore out of Tk 839.78 crore in claims, achieving a settlement rate exceeding 91 per cent. Popular Life settled nearly all claims submitted, while Guardian Life paid more than Tk 135 crore of Tk 146 crore in claims. These companies demonstrate that timely claim settlement remains achievable when governance standards are upheld.
Newer insurers have also shown relatively strong performance, with many settling over 85 per cent of claims. Akij Takaful Life, Astha Life, Bengal Life, and Trust Islami Life all reported low levels of outstanding claims, indicating cautious underwriting and controlled growth strategies.
However, the persistence of deeply insolvent insurers threatens to overshadow these successes. According to Progati Life’s CEO, allowing non-paying insurers to continue issuing policies amounts to regulatory negligence. He argues that policyholders are being misled into purchasing products from companies that have little chance of meeting future claims.
Regulatory authorities have acknowledged the severity of the problem. IDRA spokesperson Saifunnahar Sumi has confirmed that several companies no longer possess the financial capacity to settle claims, as funds have already been transferred elsewhere. She indicated that legislative reform may be the only viable solution.
Without immediate intervention, analysts warn that the crisis could trigger a mass withdrawal from life insurance products, undermining the sector’s contribution to national savings and long-term financial security.