General insurance policyholders struggle as Tk3,363cr claims pending

Infographic: TBS

While insurance is supposed to provide protection during critical events such as accidents, fires, or business losses, many policyholders are not receiving timely compensation, leaving them in severe financial and psychological uncertainty.

Statistics show that in the July–September 2025 quarter, general insurance companies were able to settle only 7.55% of total claims. In the previous quarter, April–June, the settlement rate was 8.32%. This reflects a drop of nearly 9.25% in just one quarter, highlighting weaknesses in the financial capacity, liquidity management, and overall operational efficiency of general insurance companies.

According to unaudited data from the Insurance Development and Regulatory Authority (IDRA), total claims with general insurance companies in the July–September quarter amounted to approximately Tk3,637 crore, of which only Tk275 crore were settled. By the end of the quarter, nearly Tk3,363 crore in claims remained pending, underscoring the depth of the sector's crisis.

The prolonged delay in claim settlements has caused severe hardship for policyholders. In many cases, even after several years following the expiry of the policy, claimants have yet to receive their due compensation. This has increased frustration and distrust, severely undermining public confidence in the insurance sector.

During the same quarter, General Insurance Corporation showed the highest pending claims, settling only 3.37% of claims, leaving Tk2,142.37 crore unsettled. A senior official of the corporation, speaking anonymously, said the corporation is making every effort to settle claims. However, about 80% of the delays are due to the late receipt of survey reports, which are essential for assessing the extent of loss after any accident or damage.

He further added that the problem is particularly acute for reinsurance-related claims. In some cases, it takes 5–7 years to obtain survey reports, without which final settlement is impossible. As a result, the corporation is unable to resolve claims with foreign reinsurers on time. 

This delay directly impacts policyholders, as settlement of primary claims is also postponed. The official warned that unless the survey process becomes faster and more efficient, the claim settlement crisis will deepen not only for General Insurance Corporation but across the entire sector.

In the same quarter, Green Delta Insurance settled only 8.26% of claims, leaving Tk266.54 crore pending. A company official told TBS that one of the main reasons for delays is the lack of complete and legally valid documentation. 

Many policyholders submit claims on time but fail to provide essential documents – such as proof of loss, police or fire service reports, survey reports, ownership papers, or invoices – accurately and completely. This complicates verification and delays settlement by several months.

Disputes over claim amounts and arbitration also prolong settlements. If policyholders claim more than the actual loss and reject the company's assessed amount, cases often go to court or arbitration, further delaying resolution.

Another significant issue is claims against uninsured perils. Many policyholders file claims for losses not covered by their policies – such as political violence, specific natural disasters, or gradual damage. In such cases, explanation, reassessment, and legal procedures extend the settlement timeline.

Additionally, claims remain unsettled with Pragati Insurance Tk157.91 crore, Reliance Insurance Tk98.91 crore, and Peoples Insurance Company T 80.80 crore.

Industry insiders say the insurance sector has long been under pressure due to local and global economic challenges. The crisis worsened in the second half of 2024, when claim settlement rates suddenly slowed, increasing policyholders' hardship and deepening distrust in the sector.

Experts point out that the crisis is not solely due to economic slowdown but also weak regulatory oversight. The Insurance Development and Regulatory Authority (IDRA) has faced criticism for failing to take effective action against insurers that consistently delay claim settlements. Consequently, many companies feel there is little accountability for late payments, encouraging negligence and irresponsibility.

In the non-life insurance sector, delays in claim settlement have reached extreme levels. Many policyholders wait months or even years for compensation. Businesses suffer severe financial setbacks when they cannot access timely funds following accidents, natural disasters, or operational losses.

Although the law mandates that insurance claims be settled within 90 days, this requirement is rarely followed in practice. According to industry sources, a major reason is the state-owned reinsurance company, the Sadharan Bima Corporation (SBC). By law, 50% of non-life insurance must be reinsured with SBC, while the rest can be transferred to foreign reinsurers. However, SBC often delays settling its portion, preventing primary insurers from paying policyholders on time.

A senior official of the Bangladesh Insurance Academy said, "It is unrealistic to expect claim settlement where premiums have not been paid. At the same time, an increasing number of court cases slows down the entire process." He emphasised that coordinated action by insurance companies, reinsurers, regulators, and policyholders is the only effective way to restore confidence in the sector.

A managing director of a listed company told TBS, "We always prioritise claim settlement in accordance with the law. However, many policyholders delay submitting the necessary documents, which causes further delays. Reinsurance through SBC also takes extra time due to additional documentation requirements. In some cases, even fully approved claims remain pending for months, forcing insurers to use their own funds to settle them.

A senior official from the Bangladesh Insurance Academy said, "Where premiums have not been paid, expecting claim settlements is unrealistic. Court cases also slow down the entire process." He added that only coordinated action among insurance companies, reinsurers, regulators, and policyholders can restore trust in the sector.