Bangladesh’s insurance regulator, the Insurance Development and Regulatory Authority (IDRA), has taken a landmark decision to scrap agent licences and ban commissions in the non-life insurance sector. The directive, announced on 7 January 2026, effectively means that non-life insurers can no longer deploy agents for premium collection, marking one of the most significant regulatory reforms in the country’s insurance market in recent years.
IDRA stated in its press release that all 45 non-life insurance companies operating in Bangladesh are prohibited from paying commissions to agents. Any violation of this directive will attract strict punitive action, ensuring compliance across the sector. The move is intended to address structural weaknesses, particularly the over-reliance on commission-driven sales that have often undermined underwriting discipline and policyholder protection.
Industry sources indicate that uncontrolled commission payments were a major factor contributing to the sector’s low claim settlement ratio. Non-life insurers frequently offered high commissions to agents to capture a share of the relatively small market, often prioritising premium growth over prudent underwriting. This practice has led to distorted pricing, weak risk assessment, and delays in claim settlements.
Data from the IDRA Annual Report 2023-24 highlights the sectoral imbalance: while globally the non-life sector accounts for 59.80% of total premiums, in Bangladesh it is significantly smaller. In 2023, the life insurance sector collected BDT 123 billion ($1.1 billion) in premiums, whereas the non-life sector managed only BDT 60 billion. The non-life sector also settled just 35.54% of total claims in 2023, reflecting systemic inefficiencies.
IDRA’s decision is expected to encourage insurers to focus on underwriting quality, risk management, and timely claims settlement, rather than relying on aggressive commission-led sales. Analysts predict that this reform could gradually restore market discipline and enhance consumer confidence in the non-life insurance sector.
The following table summarises key statistics of Bangladesh’s insurance sector 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 |
The regulatory overhaul is being described as a turning point for Bangladesh’s non-life insurance industry, signalling a shift towards more sustainable growth, stricter compliance, and enhanced protection for policyholders.