The life insurance sector in Bangladesh recorded a notable improvement in claim settlement performance during the final quarter of 2025, although a substantial volume of policyholders are still awaiting payments. The development signals operational progress, yet industry observers caution that longstanding structural issues continue to affect overall consumer confidence.
According to unaudited data from the Insurance Development and Regulatory Authority (IDRA), total claims in the life insurance sector between October and December 2025 amounted to BDT 13,158 crore. During the same period, insurance companies settled BDT 8,755 crore, leaving an outstanding unpaid balance of BDT 4,403 crore. The settlement rate rose significantly to 67 per cent, compared with just 35 per cent in the previous quarter, reflecting a marked short-term improvement in claim disbursement efficiency.
Life Insurance Claims Overview (Q4 2025)
| Indicator | Amount |
|---|---|
| Total claims | BDT 13,158 crore |
| Claims settled | BDT 8,755 crore |
| Outstanding claims | BDT 4,403 crore |
| Settlement rate | 67% |
In terms of policy maturity, the sector also recorded partial progress. Out of 2,843,000 matured life insurance policies during the quarter, claims were settled for 1,658,000 policies. However, approximately 1,185,000 policyholders are still awaiting their dues, highlighting the scale of pending obligations and the pressure on insurers’ payout capacity.
Industry analysts attribute the improved settlement ratio largely to seasonal financial dynamics. The final quarter of the year typically accounts for a significantly higher share of annual business activity—estimated at 40 to 45 per cent—compared with 20 to 25 per cent in other quarters. This leads to stronger cash inflows for insurers, enabling faster claim payments. Regulatory scrutiny and licensing conditions imposed by authorities have also played a role in accelerating disbursements.
Insurance expert and United Nations Development Programme consultant S M Ziaul Haque noted that while liquidity conditions improve seasonally, disparities among insurers remain pronounced. He observed that nearly one-third of life insurance companies continue to demonstrate slow or reluctant claim settlement behaviour, which undermines overall sector credibility despite improvements in aggregate performance.
Institutional performance data shows a clear divide within the industry. Several leading insurers have achieved near-complete or highly efficient settlement ratios. One international life insurance company reportedly settled over 98 per cent of claims, while both Pragati Life Insurance and Guardian Life Insurance achieved settlement rates ranging between 97 and 98 per cent. These firms are credited with deploying digital claims processing systems and strong financial management frameworks, enabling payouts within three to five working days.
In contrast, underperforming insurers are now subject to enhanced oversight, including special audits, grading assessments, and stricter regulatory monitoring. Authorities are also considering new legislative measures aimed at enforcing greater compliance and accountability across the sector.
Despite the improved quarterly performance, the continued accumulation of unpaid claims, uneven corporate practices, and long-standing operational inefficiencies indicate that the life insurance sector has yet to fully restore public trust.