Life insurance leads Bangladesh’s insurance market as customer interest grows

Raj Kiron Das: Life insurance continues to dominate Bangladesh’s insurance sector, emerging as the most widely sold category as customers increasingly seek financial security combined with savings benefits.

Industry insiders say life insurance policies, particularly term-based plans with guaranteed returns at maturity, are gaining strong traction among consumers. These products appeal to customers looking for both long-term savings and financial protection.

In terms of premium income, life insurance remains the market leader. Savings-oriented policies such as MetLife Bangladesh’s Three Payment Plan (M3PP) and Depositors Protection Scheme (MDPS) have become especially popular among policyholders.

Meanwhile, the general insurance sector is also experiencing steady growth. In 2024, total premium collection in the segment rose to approximately Tk 6,502 crore. Fire and marine insurance products accounted for the largest share of sales in this category.

Rising health awareness is also driving demand for health insurance. Both corporate groups and individual customers are increasingly purchasing health coverage, reflecting a shift toward greater financial preparedness for medical expenses.

Life insurance also leads in claims settlement. According to MetLife Bangladesh, the company paid out Tk 2,853 crore in claims in 2025. Of this, around 85% came from maturity and partial maturity claims, highlighting the popularity of savings-linked policies.

In 2024, MetLife alone disbursed approximately Tk 2,518 crore in maturity-related claims.

Health-related claims have also seen notable growth. In 2025, payouts in this category reached Tk 313 crore, indicating rising utilisation of health insurance benefits.

Although comparatively smaller, death claims remain a stable segment. In 2025, Tk 110 crore was paid out under death claims.

Despite positive trends, Bangladesh’s insurance sector continues to face significant challenges. The most pressing issue is a lack of customer trust. Delays and failures in claim settlements by some insurers have eroded confidence. Over the past 14 years, nearly 26 lakh policies have been cancelled, reflecting this trust deficit.

Economic pressures are also affecting the market. High inflation and declining purchasing power have made it difficult for many customers to buy new policies or maintain regular premium payments. As a result, life insurance sector growth slowed to 7.3% in 2024, the lowest in the past three years.

The adoption of digital technology is helping to improve the situation. Many insurers now offer online claim submission and faster processing, with settlements completed within three to five working days. These initiatives are enhancing transparency and attracting younger, tech-savvy customers.

Life insurance remains the driving force of Bangladesh’s insurance market. However, rebuilding customer trust, adapting to economic realities and expanding the use of technology will be critical for sustaining long-term growth and strengthening the sector’s future.