TK7,780cr insurance claims unpaid till March 2026
The situation is particularly alarming in the non-life segment, where insurers settled only 11.3% of claims, leaving Tk3,369 crore, or 88.70% of total claims, unpaid.
Bangladesh's insurance industry continues to struggle with claim settlements, with more than seven out of every 10 claims remaining unpaid as of March this year, despite a legal requirement to settle valid claims within 90 days.
According to the latest data from the Insurance Development and Regulatory Authority (Idra), insurers had received claims worth Tk10,611 crore across the life and non-life segments by the end of March 2026. Of that, Tk7,779 crore, or 73.31%, remained unsettled.
The situation is particularly alarming in the non-life segment, where insurers settled only 11.3% of claims, leaving Tk3,369 crore, or 88.70% of total claims, unpaid.
Life insurers performed relatively better but still left Tk4,410 crore, or 64.73% of claims, unsettled out of Tk6,813 crore received by the end of March 2026.
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Industry insiders say persistent delays in claim settlements have badly eroded public confidence in the insurance sector. Many policyholders who pay their premiums regularly do not receive compensation on time.
The crisis has been compounded by insurers' weak financial health, poor corporate governance, underperforming investments, and delays in recovering reinsurance claims.
Regulator moves to clear Tk4,000cr backlog
Against this backdrop, newly appointed Idra Chairman Mir Nadia Nivin recently declared the settlement of long-pending insurance claims as the regulator's top priority.
She said Idra has already begun working to clear nearly Tk4,000 crore in outstanding claims owed by the country's seven most financially distressed life insurance companies. Under the plan, the companies' land, government treasury bonds, fixed deposits held with financially sound banks and other marketable assets will be liquidated in phases, with the proceeds used to pay policyholders.
According to Idra officials, the regulator has already held separate meetings with the sponsors, boards and chief executive officers of the seven companies to review their assets, liabilities, investments and overall financial condition. Fresh valuations have also been ordered where questions exist over asset values. At the same time, Idra is coordinating with Bangladesh Bank to recover deposits of insurance companies that remain stuck in financially troubled banks.
Among life insurers, Baira Life recorded the highest unsettled claim ratio at 99.91%. It was followed by Fareast Islami Life Insurance 99.12%, Homeland Life Insurance 98.97%, Sunflower Life Insurance 98.65% and Padma Islami Life Insurance 98.63%. Nearly all claims filed with these companies remained unpaid through March.
The situation is similarly concerning among non-life insurers. Dhaka Insurance reported the highest unsettled claim ratio at 99.85%, followed by Bangladesh Co-operatives Insurance 99.79%, Northern Islami Insurance 98.86%, Asia Pacific General Insurance 98.29% and Peoples Insurance 98.27%.
Reinsurance delays blamed
Beyond financial weakness, industry stakeholders say structural flaws in the reinsurance system are a key reason for delayed claim settlements in the non-life insurance sector.
Under Bangladesh's insurance law, valid claims must be settled within 90 days. In reality, however, many policyholders wait months or even years for compensation after accidents, fires or other insured losses, leaving individuals and businesses under severe financial strain.
Industry insiders identify the state-owned Sadharan Bima Corporation as a major bottleneck. Existing regulations require non-life insurers to reinsure 50% of their risks with SBC, while the remaining 50% can be placed with foreign reinsurers.
Insurance companies allege that Sadharan Bima often takes a long time to settle its share of claims, preventing insurers from making timely payments to policyholders.
An Idra official, requesting anonymity, told TBS, "One of the main reasons companies cite for delayed claim settlements is the slow settlement of reinsurance claims by Sadhar an Bima. We have informed the corporation about the issue, and its new leadership is working to reduce the backlog."
Industry officials say foreign reinsurers generally settle claims on time, while delays are more common at Sadharan Bima. To safeguard their reputation and maintain customer confidence, many private insurers pay claims from their own funds before receiving reinsurance recoveries.
Sadharan Bima officials, however, argue that the delays are not entirely their responsibility. They say insurers often fail to submit complete documentation or pay reinsurance premiums on time, resulting in longer processing times.
A managing director of a leading non-life insurance company, requesting anonymity, said, "Reinsurance claims through Sadharan Bima require additional documentation, which makes the process slower. In many cases, insurers have to settle policyholders' claims from their own funds before receiving payments from the reinsurer."
A senior official at the Bangladesh Insurance Academy said incomplete documentation and claims tied up in lengthy court proceedings are also major reasons behind delayed settlements.
"It is not reasonable to expect claims to be settled when premiums remain unpaid. Meanwhile, ongoing court disputes continue to delay the process. Without coordinated efforts by insurers, reinsurers, regulators and policyholders, the situation is unlikely to improve significantly," he said.
Bangladesh currently has 82 insurance companies, including 36 life insurers and 46 non-life insurers. Of them, 58 are listed on the country's stock exchanges.
