The Bangladesh Securities and Exchange Commission (BSEC) has raised significant concerns regarding the audit opinions issued on the 2024 financial statements of 27 listed insurance companies, highlighting potential implications for investor confidence, policyholder protection, and overall market transparency.
Following its detailed review of the latest annual audited accounts, BSEC has formally requested the Insurance Development and Regulatory Authority (IDRA) to consider appropriate regulatory measures against the insurers involved, in accordance with prevailing insurance and securities legislation.
According to reporting by The Business Standard, the statutory auditors for these insurers issued a variety of non-standard opinions, including Adverse Opinions, Qualified Opinions, Emphasis of Matter paragraphs, Going Concern warnings, and conclusions pointing to Material Uncertainty in the companies’ financial statements. The commission emphasised that such audit outcomes are generally perceived by regulators and investors as indicators of heightened risk relating to financial reporting, governance, and risk management, rather than routine audit observations.
In a letter from its Corporate Reporting Department to the IDRA chair, BSEC specifically highlighted audit findings concerning going concern assumptions and material uncertainty. The regulator noted that these observations directly address the insurers’ capacity to continue operations and meet obligations to policyholders and creditors. BSEC stated: “Audit observations related to going concern risks and material uncertainty are of particular concern, as they directly question the companies’ ability to continue operations and meet policyholder obligations,” underscoring the gravity of the issue.
The 27 insurers identified span both life and non-life business segments, including Asia Insurance, Asia Pacific General Insurance, Bangladesh General Insurance, Central Insurance, Continental Insurance, Desh General Insurance, Dhaka Insurance, Eastern Insurance, Federal Insurance, Green Delta Insurance, Islami Commercial Insurance, Islami Insurance Bangladesh, Janata Insurance, Meghna Insurance, Northern Islami Insurance, Paramount Insurance, Phoenix Insurance, Prime Insurance, Republic Insurance, Rupali Insurance, Sonar Bangla Insurance, Sikder Insurance, Standard Insurance, Union Insurance, Delta Life Insurance, Popular Life Insurance, and Sunlife Insurance.
BSEC has urged IDRA, as the sector’s primary regulator, to review the relevant audit reports and determine whether measures such as enhanced supervision, special or forensic audits, or corrective action plans are warranted in individual cases. The securities regulator linked these audit findings to broader goals of ensuring credible financial disclosures in a sector responsible for long-term liabilities and household savings.
Currently, Bangladesh hosts 82 insurance companies, 58 of which are listed on the local stock exchange, comprising 43 non-life and 15 life insurers. Industry projections indicate that gross written premiums are expected to reach US$15.56 billion by 2025, with life insurance contributing US$9.48 billion. The market is forecast to grow at a compound annual rate of 4.02% between 2025 and 2029, reaching US$18.22 billion, reflecting rising awareness of health and life insurance, higher disposable incomes, and increasing demand for health coverage.
Market observers note that the manner in which BSEC and IDRA coordinate their responses to the audit findings will likely influence perceptions of governance, risk management, and regulatory robustness in Bangladesh’s insurance sector, both domestically and among regional investors.