Claim settlement performance in Bangladesh’s life insurance sector improved markedly in the final quarter of 2025, although a substantial volume of unpaid claims continues to undermine confidence in the industry.
According to unaudited figures from the Insurance Development and Regulatory Authority (IDRA), total claims in the life insurance sector reached Tk 13,158 crore by the end of the October–December quarter. Of this amount, insurers settled Tk 8,755 crore, leaving Tk 4,403 crore outstanding. The overall settlement rate rose sharply to 67 per cent, compared with just 35 per cent in the previous quarter.
A similar improvement is evident in policy-level data. Out of 28.43 lakh matured life insurance policies, 16.58 lakh claims were settled, while approximately 11.85 lakh policyholders remain unpaid.
Sector overview
| Indicator |
Value |
| Total claims (Tk crore) |
13,158 |
| Claims settled (Tk crore) |
8,755 |
| Outstanding claims (Tk crore) |
4,403 |
| Settlement rate |
67% |
| Matured policies |
28.43 lakh |
| Policies settled |
16.58 lakh |
| Pending policies |
11.85 lakh |
Industry stakeholders attribute the improvement primarily to intensified regulatory scrutiny and year-end operational pressures. Insurers typically experience higher business inflows in the final quarter, which enhances liquidity and enables more claim payments. At the same time, licence renewal requirements have reportedly encouraged companies to clear outstanding obligations more actively.
Insurance sector expert and UNDP consultant SM Zialul Haque noted that nearly 40–45 per cent of annual life insurance business is usually concentrated in the final quarter, compared with 20–25 per cent in other periods. This seasonal concentration, he said, significantly improves cash flow, allowing insurers to settle more claims. However, he also observed that a considerable portion of companies remain reluctant to prioritise timely settlements.
Despite overall improvement, structural weaknesses persist across the sector. Industry observers report a clear divergence between better-performing insurers and those with weak governance practices. While some companies maintain prompt settlement mechanisms, others continue to delay payments for extended periods, in some cases spanning years after policy maturity.
Top-performing insurers reported settlement ratios above 95 per cent. MetLife Bangladesh recorded a 98.3 per cent settlement rate, paying Tk 2,853 crore in claims during the period. Its Chief Executive Officer, Ala Ahmad, stated that efficient fund management and digital processing systems allow claims to be settled within three to five days.
Pragati Life Insurance also achieved a 98.5 per cent settlement rate, while Guardian Life Insurance reported a 97.5 per cent rate. Industry executives from these companies emphasised that timely claim settlement remains central to maintaining customer trust and sector credibility.
Regulatory authorities have credited recent improvements to a series of supervisory reforms. IDRA has introduced a grading system for insurers, placed lower-performing companies under special audit, and strengthened governance oversight through mandatory review meetings with senior management and board representatives. Additionally, an evaluation process for the appointment and renewal of chief executives has been implemented.
Officials also confirmed that preparations are underway for an Insurers’ Resolution Act, which would allow intervention in persistently underperforming firms. Amendments to existing insurance legislation are being finalised, including stricter penalties for delayed claim settlements and enhanced monitoring mechanisms to ensure compliance.
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