Asian Reinsurance Corporation Boosts Risk Sharing in Bangladesh Market

Mashruk Khan: Asian Reinsurance Corporation, the Bangkok-based intergovernmental regional reinsurer established under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific, maintains deep institutional ties to Bangladesh as one of its ten regular member states and through the associate membership of Sadharan Bima Corporation.

Founded following discussions that began in the early 1970s and formalized by an intergovernmental agreement signed by several countries including the Philippines in 1977, the corporation held its inaugural Council of Members meeting in 1979 and commenced operations on 1 January 1980 with an initial authorized capital of 15 million United States dollars and paid-up capital of 4.5 million dollars contributed by the founding members.

Bangladesh gave domestic legal effect to its participation through the Asian Reinsurance Corporation Ordinance of 1978, later replaced by the Asian Reinsurance Corporation Act of 2013, which implements the founding agreement, provides for government subscription to capital stock, and incorporates key treaty provisions into national law.

Each founding member subscribed five hundred shares totaling five hundred thousand dollars, with flexibility for least-developed countries to pay entirely in local currency; authorized capital was subsequently raised to 100 million dollars and higher in later years.

Headquartered in Bangkok and governed by a Council of Members drawn from the ten regular member governments- Afghanistan, Bangladesh, Bhutan, China, India, Iran, South Korea, Sri Lanka, Thailand and the Philippines- together with a Management Board comprising a chairman and vice-chairman from the Council plus the president and executive vice-president, Asian Re operates as a professional non-life reinsurer.

It accepts treaty and facultative business across traditional classes of property, marine and miscellaneous risks primarily from markets in Asia, the Middle East and Africa, giving priority to business originating in member states.

Surplus capacity is retroceded with preference to the national insurance and reinsurance markets of those members.

Beyond underwriting, the corporation serves as a regional centre for collecting insurance information, developing professional expertise and providing technical assistance to the insurance markets of its members, while investing a sizeable proportion of its funds within the region subject to sound insurance principles.

In recent years Asian Re has delivered steadily improving financial results after earlier periods of volatility linked to catastrophe losses and reserve strengthening.

Gross premiums have grown at a compound annual rate in the low-to-mid teens since 2018, reaching approximately 26 million dollars in 2023–2024 and nearly 29 million dollars in 2025.

Net profit rose to 3.21 million dollars in 2023, more than doubled to 7.01 million dollars in 2024 and stood at 6.7 million dollars in 2025.

The combined ratio improved sharply to the mid-80s percent range in 2024 before settling around 91–93 percent in 2025 amid catastrophe activity.

Return on equity moved from 4.6 percent in 2023 to 9.4 percent in 2024 and 8.3 percent in 2025, while solvency ratios under Thailand’s risk-based capital guidelines remained robust in the 330–370 percent range.

Absolute capital stood near 76 million dollars at the end of 2024.

AM Best has affirmed the Financial Strength Rating at B++ (Good) and the Long-Term Issuer Credit Rating at “bbb” (Good) with stable outlooks, and has assigned a Thailand National Scale Rating of aa+.TH (Superior), citing strong risk-adjusted capitalisation, adequate operating performance and appropriate enterprise risk management, while noting the relatively modest absolute capital base and certain investment exposures.

Within Bangladesh the corporation’s contribution sits inside a reinsurance framework still centred on Sadharan Bima Corporation.

Under the Insurance Corporation Act 2019 every non-life insurer must cede 50 percent of its reinsurable business to SBC; the remaining half may be placed with SBC or with any other insurer at home or abroad.

SBC also underwrites the whole of public-property non-life business, retaining half and redistributing the balance among private insurers, and acts as the conduit for large special risks such as aviation, energy and power projects.

Life reinsurance carries no mandatory domestic cession.

Against this backdrop Asian Re supplies complementary treaty and facultative capacity that private insurers can use for the non-mandatory portion of their cessions or for risks exceeding local and SBC retentions.

Annual reports of Bangladeshi companies, including Asia Insurance, list Asian Re among the overseas reinsurers supporting facultative placements alongside global names.

Because the corporation is itself owned by governments of the region and prioritises member-state business, it offers a channel for keeping a larger share of reinsurance premiums circulating within Asia rather than flowing exclusively to distant markets, while providing reciprocal capacity across countries that face similar catastrophe and developmental exposures.

Membership and SBC’s associate status also open avenues for knowledge transfer and capacity building.

Bangladesh participates in the Council of Members and gains access to the corporation’s role as a regional information and expertise hub, supporting professional development in a still-maturing insurance sector.

At the same time the absolute scale of Asian Re’s book remains modest by global standards, so its contribution is facilitative rather than dominant.

Precise Bangladesh-origin premium and claims figures are not published in aggregate public sources, limiting quantitative assessment of country-level impact.

Bangladesh continues to confront structural challenges including claim-settlement delays involving SBC, outstanding balances between the state reinsurer and private companies, and limited domestic capacity for very large industrial and infrastructure risks.

Discussions about easing or removing the compulsory 50 percent cession to SBC reflect efforts to improve market efficiency and attract additional foreign capacity.

Within this evolving environment Asian Re remains a long-standing regional partner that supplies diversified risk capacity, supports premium retention inside Asia and contributes to the institutional development of Bangladesh’s non-life insurance market.