Monday, 6th April 2026
Khabor Wala Desk
Published: 20th February 2026, 12:46 PM
The Bangladeshi insurance sector is teetering on the brink of crisis as five life insurance companies face allegations of mismanagement, irregularities, and corruption, undermining public confidence in the entire industry. According to the latest data, the total unsettled insurance claims across the country’s 36 life insurance firms amount to BDT 4,375 crore. Alarmingly, five companies alone account for BDT 3,829 crore, representing 87% of all pending claims.
Experts and industry insiders warn that roughly one in four life insurance providers is entangled in financial irregularities, placing the sector in a precarious position. Regulatory authorities, constrained by political and legal limitations, have struggled to take decisive action. As a result, specialists are urging the Insurance Development and Regulatory Authority (IDRA) to adopt international best practices to restore confidence. Industry stakeholders emphasise that liquidating the fixed assets of these struggling companies to settle claims is essential to rebuild trust.
IDRA’s latest report indicates that total unsettled claims in both life and general insurance stand at BDT 7,010 crore, with life insurance claims comprising BDT 4,375 crore and general insurance BDT 2,635 crore.
| Settlement Rate | Number of Companies | Observations |
|---|---|---|
| 99% | 10 | Successfully settled nearly all claims |
| 90% | 12 | Settled majority of claims |
| 80% | 2 | Moderate settlement progress |
| <10% | 4 | Severely lagging, including top five defaulters |
Among the worst-performing firms, Far East Islami Life Insurance Ltd. tops the list with unsettled claims of BDT 2,752 crore in 2024, having paid only BDT 194 crore (6.59%). Sunflower Life Insurance follows with just 2% of claims settled, leaving BDT 586 crore pending. Padma Islami Life (S Alam Group) has cleared only 4%, leaving BDT 249 crore unresolved. Bayra Life and Progressive Life Insurance have settled 7% and 17% of claims, respectively, with pending amounts of BDT 77.66 crore and BDT 165 crore.
Far East Islami Life’s acting CEO Shahidul Islam told Our Time that steps are underway to settle customer claims, including asset liquidation approved by IDRA, aiming for substantial settlements by June or July.
In contrast, ten companies—including Alfa Islamic Life, Life Insurance Corporation of Bangladesh, Popular Life, Trust Islami Life, Chartered Life, Sonali Life, Mercantile, Sandhani, Meghna, and Rupali Life—have successfully settled 99% of their claims, demonstrating the stark contrast within the sector.
Chartered Life Insurance’s acting CEO, Mohammad Amdad Ullah, warned that the mismanagement of a few firms is negatively affecting the sector and may erode public confidence, impacting the broader economy.
Economist Professor Abu Ahmed echoed these concerns, noting that trust is paramount in the insurance industry and suggesting that the regulatory authority must adopt international practices to restore credibility while reassessing the viability of maintaining so many insurers in a relatively small economy.
IDRA officials confirm that companies failing to settle claims will be compelled to liquidate assets to ensure policyholders receive their due payments, marking a critical step toward stabilising Bangladesh’s embattled insurance sector.
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