Life Insurance Sector Sees Revenue Growth, Claim Payouts Fall

Bangladesh’s life insurance sector has exhibited steady growth in both revenue and investment over recent years. However, a decline in claim settlements has raised concerns, as timely payouts are vital for maintaining customer confidence and ensuring the sector’s long-term stability.

In 2024, total premium income from life insurance companies fell by BDT 121 crore compared with 2023, standing at BDT 11,390 crore. Despite this slight decrease in income, the sector continued to see an upward trend in life funds and investments, reflecting ongoing financial resilience.

At present, 36 life insurance companies operate in Bangladesh, encompassing state-owned, private, and foreign firms. According to the Bangladesh Insurance Association (BIA), the sector’s total investment reached BDT 34,293 crore in 2024, up from BDT 33,461 crore in 2023. Similarly, the total life fund rose to BDT 33,232 crore, comprising customer premiums and returns from company investments.

Life funds are primarily utilised to settle policyholder claims on death or maturity and are recorded as liabilities on a company’s balance sheet.

The table below provides a snapshot of premium income and claim settlements for the leading life insurance companies in Bangladesh during 2024:

Overall, total claim settlements in the sector fell by 7.79%, amounting to BDT 8,452 crore in 2024. Companies reporting notable reductions include FairEast Life, Shanta Life, Homeland Life, Progressive Life, and Swadesh Life. In some cases, limited balances in life funds have constrained the ability to settle claims promptly.

Mohammad Kashim Uddin, CEO of National Life, stated, “Timely settlement of claims remains our top priority. Research shows that each successfully settled claim encourages around ten new customers to purchase insurance.” Notably, National Life’s premium income has more than doubled over the past five years.

Professor Moin Uddin of Dhaka University’s Banking and Insurance Department commented, “While premium revenue and investments are rising, the claim settlement rate is critical for customer confidence. A declining rate discourages new policy uptake, underscoring the importance of strict oversight by the Insurance Development and Regulatory Authority (IDRA).”

In summary, although Bangladesh’s life insurance sector demonstrates robust financial growth, safeguarding policyholder trust through timely and reliable claim settlements remains essential for the sector’s sustainable future.