Current State of Bangladesh’s Insurance Sector: Expert Insights

Bangladesh’s insurance sector, while showing promising growth, faces challenges and opportunities amid economic and regulatory shifts. Despite contributing only 0.5% to GDP in 2023, significantly lower than India’s 4%, the sector is poised for expansion driven by rising incomes, urbanization, and regulatory reforms. In 2022, the market’s gross written premium reached BDT 166.1 billion, with a projected CAGR of over 6% through 2027.

[Let’s Check Insight]

[Let’s Check Insight]

The non-life insurance segment, led by property and marine insurance, grew 12.8% in 2023, outpacing life insurance, which faced premium collection issues due to inflation and pre-election uncertainties. Fire insurance surged as businesses sought coverage following recent incidents. However, life insurance penetration dropped to 0.4% of GDP, reflecting distrust from delayed claim settlements and mismanagement.

Key Developments

• Bancassurance guidelines introduced in December 2023, enabling banks to sell insurance, boosting accessibility.
• Proposed solvency margin changes by IDRA to strengthen insurers’ risk capacity.
• Growing demand for microinsurance and digital platforms to reach underserved populations.
• Public awareness campaigns to address low insurance literacy.

Experts like Shamima Nasrin of Prime Insurance emphasize educating consumers on insurance’s economic security, while Istiaque Mahmud of Guardian Life highlights bancassurance’s potential to expand reach. Challenges include regulatory oversight gaps, with the Insurance Development and Regulatory Authority (IDRA) needing more autonomy and resources. Low claim settlement ratios and past financial scams further erode trust.

Despite hurdles, Bangladesh’s young population and economic growth offer untapped potential. Digital innovations, like MetLife’s AI-based chatbots, and partnerships with banks are transforming customer engagement. To thrive, the sector must prioritize transparency, modernize training, and leverage alternative dispute resolution (ADR) to resolve claim disputes efficiently, aligning with BIArb’s mission. Visit www.biarb.org.bd or contact info@biarb.org.bd for ADR support.

Discussion on “Current Situation of Insurance Sector in Bangladesh”, by Barrister A.M Masum (FCIArb), security law & company law specialist, vice president of BIArb|head of the chamber of The Lawyers & Jurists| EKUSHEY ETV|ETV Business