Special Correspondent :
A total of 32 insurance companies operating in Bangladesh have been identified as high risk, according to Dr. M. Aslam Alam, Chairman of the Insurance Development and Regulatory Authority (IDRA). The list includes 15 life insurance companies and 17 general insurance companies.
Dr. Alam shared the findings at a press conference held at the IDRA headquarters on Wednesday. The risk status was determined after evaluating the companies’ overall performance, financial standing, and claim settlement records.
“Only 6 out of 36 life insurance companies in the country are currently in good standing,” said the IDRA chief. “Fifteen are classified as high-risk, while another 15 fall under the medium-risk category.” However, he did not publicly disclose the names of the high-risk companies during the briefing.
According to internal sources within IDRA, the high-risk life insurance companies include: Far East Islami Life, Padma Islami Life, Prime Islami Life, Sunflower Life, Sunlife, Golden Life, BAIRA Life, Progressive Life, NRB Islamic Life, Diamond Life, Best Life, Protective Islami Life, Jamuna Life, and Swadesh Life.
A major reason for the sector’s declining credibility, according to Dr. Alam, is the consistent failure of insurers to settle claims on time. “About 45% of claims in the life insurance sector remain unpaid, while in the general insurance sector the figure stands at approximately 47%,” he said.
To restore trust, IDRA has proposed several reforms, including the drafting of new regulations modeled after bank resolution frameworks. These reforms could include not only mergers, but also liquidation and acquisitions of failing insurance companies.
Insurance penetration in Bangladesh has also declined over the years. In 2010, the insurance-to-GDP ratio stood at 0.94%. By 2023, it had fallen to 0.41%, with a further decline observed in 2024. “In 2024 alone, IDRA received 24,852 complaints from policyholders,” Dr. Alam noted, adding that a severe shortage of manpower has hampered the authority’s ability to supervise the sector effectively.
IDRA currently operates with only 107 employees, against an approved strength of 160. To address this, recruitment efforts are underway, which will increase the authority’s operational expenses.
In response to a media query regarding IDRA’s recent proposal to raise the license renewal fee for insurance companies—from BDT 1 to BDT 5 per thousand taka of capital—Dr. Alam said the increase is necessary. “Despite the financial struggles of insurance companies, the fee hike is aimed at enabling IDRA to meet its growing administrative costs, especially as we expand our manpower,” he said.
Stakeholders have expressed concerns that increasing fees amid a trust and liquidity crisis may further strain the sector. However, the regulator insists that these reforms are essential for ensuring long-term stability and restoring public confidence in Bangladesh’s insurance industry.
