Global Insurance ‘ate up’ Tk 104 crore in five years through excess spending
Abdur Rahman Abir: Global Insurance Limited spent nearly Tk 104 crore above its permitted management expense limit over the past five years, according to an analysis of the company’s financial statements.
The insurer exceeded the approved expense limit every year from 2020 to 2024, despite the government raising the management expense ceiling for insurance companies in 2018.
Insurance experts say continued overspending can weaken the company’s finances and reduce returns for shareholders. They have called for a review of whether the additional expenses were justified.
Tk 104 crore spent beyond limit in five years
According to financial statements, Global Insurance collected Tk 463.58 crore in gross premiums between 2020 and 2024.
Under insurance regulations, the company was allowed to spend Tk 135.08 crore on management expenses during the period.
However, its actual expenditure reached Tk 238.57 crore.
This means the company spent Tk 103.50 crore more than the permitted limit, which was 76.62% higher than the approved amount.
Higher expense ceiling failed to reduce overspending
The government increased the management expense limit for insurers in 2018.
Before the change, companies followed the Insurance Rules, 1958, which allowed fire and miscellaneous insurers to spend up to 30% of premium income as management expenses.
The revised rules increased the limit gradually, allowing expenses of up to 35% for certain premium slabs.
However, Global Insurance continued to spend above the permitted level even after the increase.
Tk 26.62 crore excess spending in 2024
In 2024, Global Insurance collected Tk 85.53 crore in gross premiums.
The company was allowed to spend Tk 24.93 crore on management expenses but actually spent Tk 51.55 crore.
The difference was Tk 26.62 crore.
Highest gap recorded in 2023
The largest annual gap was recorded in 2023.
That year, Global Insurance collected Tk 95.70 crore in premiums, while its permitted management expenses were Tk 27.95 crore.
The company’s actual expenses reached Tk 59.32 crore, exceeding the limit by Tk 31.37 crore.
Expenses remained high despite lower premium income
The company’s premium income declined after 2022, but expenses remained above the regulatory limit.
Global Insurance collected Tk 114.92 crore in premiums in 2022, which fell to Tk 85.53 crore in 2024.
Despite the decline, the company exceeded its expense limit by Tk 26.62 crore in 2024.
CEO says company is cutting costs
Global Insurance Chief Executive Officer Mohammad Jamirul Islam acknowledged that the company could not maintain the management expense limit set by regulations.
He said the company does not hide expenses to show lower costs and is taking steps to reduce spending.
According to him, the company is merging branches with weak business performance, reducing the number of vehicles and selling older vehicles to lower maintenance costs.
