IDRA reports progress in life insurers’ claim settlement

Staff Correspondent: Outstanding life insurance claims in Bangladesh have dropped significantly in the first half of 2025, according to a report by the Insurance Development and Regulatory Authority (IDRA). The findings suggest an improving claims settlement trend, although industry experts caution that robust regulatory oversight is still needed to ensure customers’ trust and sustainability in the sector.

IDRA’s unaudited annual and quarterly report shows that by the end of December 2024, policyholders’ outstanding claims across all life insurers stood at Tk 4,375.06 crore. By June 2025, this figure had declined to Tk 3,628.23 crore— a reduction of Tk 746.83 crore within six months. The data was compiled from 36 life insurance companies, although Sunflower Life Insurance did not provide information for the second quarter.

In the first half of 2025, life insurers collectively settled Tk 4,315.41 crore in claims out of Tk 7,943.64 crore lodged by customers. This leaves Tk 3,628.23 crore still pending. Analysts note that the progress, while encouraging, highlights existing challenges for certain insurers.

A breakdown shows that Fareast Islami Life Insurance holds the largest share of outstanding claims, accounting for Tk 2,742.91 crore— approximately 75 percent of the sector’s total. Padma Islami Life follows with Tk 246.02 crore, and Progressive Life with Tk 155.02 crore.

On the positive side, several companies demonstrated strong settlement performance. MetLife Bangladesh led the industry, paying Tk 632.62 crore in the first half of 2025, followed by National Life with Tk 335.71 crore and Delta Life with Tk 189.60 crore. Jiban Bima Corporation and Guardian Life ranked fourth and fifth, settling Tk 163.94 crore and Tk 119.70 crore, respectively.

Quarterly data indicates that life insurers disbursed Tk 2,368.75 crore in claims during January–March 2025, followed by Tk 1,946.66 crore in April–June. Meanwhile, new claims worth Tk 3,568.58 crore were raised in the first six months of the year, including Tk 2,000.62 crore in the first quarter and Tk 1,567.96 crore in the second quarter.

For context, the sector’s backlog of unpaid claims was much higher in 2024, reaching Tk 12,965.74 crore. Insurers then settled Tk 8,590.68 crore, leaving Tk 4,375.06 crore outstanding at the start of 2025. The claims settlement ratio for 2024 stood at 66.26 percent.

Industry leaders welcomed the recent decline in outstanding claims. Joint Secretary General of the Bangladesh Insurance Forum (BIF) and CEO of Zenith Islami Life SM Nuruzzaman, said that the technology-driven processes have sped up settlements and reduced harassment for customers. He highlighted the use of digital platforms like mobile banking and BEFTN for payments.

However, SM Nuruzzaman noted structural challenges: “A significant amount of insurers’ funds remain stuck in banks and leasing companies, particularly in S. Alam–controlled institutions. Investments in real estate have also failed to yield expected returns, further straining claim settlements.”

Insurance expert SM Ziaul Haque, former CEO of Chartered Life Insurance, stressed the need for IDRA to publish quarterly settlement reports. “The decline in outstanding claims is positive, but regular disclosures will make the situation clearer and allow regulators to act with swiftness. Timely settlements build customers’ trust and reinforce insurance as a continuous service, not a one-time payout,” he said.

He also pointed to regional practices, noting that ASEAN economies leverage insurance growth as a driver of national development, whereas Bangladesh still relies heavily on banking and industry. “It is time policymakers integrate insurance expansion into the country’s economic growth strategy,” Haque added.