The country’s life insurance industry is currently grappling with a severe crisis. Experts attribute the sector’s woes primarily to irregularities, corruption, and management deficiencies in five major life insurance companies, which have collectively eroded public trust.
According to recent data, there are 36 life insurance companies operating nationwide, with total unsettled claims amounting to BDT 4,375 crore. Alarmingly, just five of these companies account for BDT 3,829 crore of unsettled claims—nearly 87 per cent of the total.
The Insurance Development and Regulatory Authority (IDRA) has struggled to take decisive action against these firms due to political and legal constraints. Drawing on international experience, experts have recommended a bold course of action: to expedite claim settlements, the corrupt-prone companies should be compelled to liquidate their fixed assets.
The latest IDRA report highlights that the combined unsettled claims in both life and general insurance sectors stand at BDT 7,010 crore. Of this, life insurance accounts for BDT 4,375 crore, while general insurance comprises BDT 2,635 crore.
Unsettled Claim Status of Top Five Companies
| Company | Unsettled Claims (BDT crore) | Paid Claims (BDT crore) | Settlement Rate (%) | Remaining Claims (BDT crore) |
|---|---|---|---|---|
| Fareast Islami Life | 2,752 | 194 | 6.59 | 2,558 |
| Sunflower Life | 598 | 12 | 2 | 586 |
| Padma Islami Life | 249 | 10 | 4 | 239 |
| Bayra Life | 77.66 | 5.4 | 7 | 72.26 |
| Progressive Life | 165 | 28 | 17 | 137 |
In contrast, ten other companies have successfully paid more than 99 per cent of their claims. These include Alpha Islamic Life, Life Insurance Corporation of Bangladesh, Popular Life Insurance, Trust Islami Life, Chartered Life Insurance Company, Sonali Life, Mercantile Life, Sandhani, Meghna Life, and Rupali Life Insurance.
IDRA Deputy Director Md. Solaiman emphasised, “Ensuring rapid settlement of policyholder claims is our top priority. For companies that fail to comply, liquidation of fixed assets will be enforced to guarantee payment.”
Economist Professor Abu Ahmed added, “Restoring confidence in the insurance sector is the greatest challenge at present. IDRA must follow international best practices while simultaneously reassessing both sector efficiency and the number of active companies.”
In summary, decisive action is urgently required to stabilise the country’s life insurance industry. Unless the fixed assets of the non-compliant, corruption-prone companies are liquidated to settle outstanding claims, public trust will continue to erode—posing long-term risks to the national economy.