Insurance Sector Needs Stronger Regulation and Digitalization, Say Experts at IRF Seminar

By Staff Correspondent: A post-budget seminar on the future prospects and challenges of Bangladesh’s insurance sector was held on Saturday (27 June) at Hotel Ekattor in Bijoynagar, Dhaka. The event was organized by the Insurance Reporters Forum (IRF), bringing together policymakers, regulators, industry leaders and academics.

The seminar was chaired by IRF President Golam Mawla. The chief guest was Professor Dr. Rashed Al Mahmud Titumir, Adviser to the Ministry of Finance and Planning Affairs. Special guests included Insurance Development and Regulatory Authority (IDRA) Chairperson Mir Nadia Nivin, Bangladesh Insurance Association (BIA) President Sayeed Ahmed (MP) and Bangladesh Insurance Forum (BIF) President BM Yusuf Ali.

In his address, Professor Dr. Rashed Al Mahmud Titumir said that the insurance sector in Bangladesh has not yet achieved adequate digitalization. As a result, customer satisfaction and good governance remain difficult to ensure.

He added that weak regulatory oversight has contributed to a growing trust deficit in the sector. He stressed that Bangladesh, being highly vulnerable to climate risks, needs a stronger insurance system. He also emphasized the need for proper use of technology, sector-based audit systems, and a stronger regulatory framework.

IDRA Chairperson Mir Nadia Nivin said that three key pillars are required to reform the insurance sector: rebuilding customer trust, strengthening regulatory and long-term investment frameworks, and enhancing institutional capacity.

She informed that unpaid insurance claims in the sector are currently around Tk 7,000 crore. Some of these issues are sector-wide, while others are company-specific, and work is ongoing to resolve them.

She also noted that many companies face complications in asset liquidation. She stressed the need for a risk-based supervision system. Considering Bangladesh’s vulnerability to natural disasters, she highlighted the importance of expanding microinsurance and improving service delivery channels.

BIA President Sayeed Ahmed (MP) said that the insurance commission must remain fully independent from business operations and irregularities. He also called for mandatory expansion of motor insurance and broader coverage in new sectors.

Karnaphuli Insurance Vice Chairman Nasir Uddin Ahmed (Pavel) highlighted key challenges in the non-life insurance sector, especially issues related to reinsurance commission and VAT. He said these practices are not aligned with international standards and require urgent reform.

He also commented that licensing 13 insurance companies at once in 2013 was not a proper decision. According to him, licenses should have been issued gradually, with proper regulatory oversight and capacity assessment.

BIF President BM Yusuf Ali said that some insurance companies in Bangladesh settle claims within 24 hours. However, such positive examples are not widely highlighted.

He said that claim delays and non-payment issues receive more attention, which affects the overall image of the sector. He stressed the need to promote positive practices more widely.

Zenith Islami Life Insurance Managing Director SM Nuruzzaman said that the life insurance sector faces more challenges than non-life insurance. He mentioned difficulties in asset liquidation and suggested that easier bank loan access and improved asset management could help reduce sectoral stress.

Professor Dr. Md. Shahidul Islam Zahid of the University of Dhaka said that although insurance is an important part of the economy, it remains underdeveloped in Bangladesh.

He pointed out that insurance penetration is still very low and must be increased urgently. Weak regulation, short-term profit thinking, and lack of sustainable planning are major barriers to growth.

He also emphasized the need to expand insurance coverage in climate-risk and agriculture sectors. Without improving governance and reducing financial ethical risks, the sector cannot become strong, he added.

Speakers at the seminar unanimously agreed that rebuilding trust, ensuring good governance, increasing digital transformation, and strengthening regulatory systems are essential for the development of Bangladesh’s insurance sector.

They also stressed that political commitment and coordinated efforts from all stakeholders are necessary to achieve sustainable growth in the industry.