Wealth Grows on Customers' Money Yet Claims Stay Unsettled

The total assets of companies in the country's life insurance sector have hit a record Tk51,000 crore. Yet, regular customers are not reaping benefits. Behind the grand statements of continuous financial growth and thousands of crores in premium income, the plight of nearly 1.2 million victim families remains obscured. An analysis of final financial statistics as of December 31, 2025, reveals that despite the companies holding a massive asset base of Tk51,447 crore and 55 lakh, legitimate insurance claims of customers worth Tk4,403 crore and 20 lakh are being left idle and unresolved.

Sector insiders state that while the average rate of claim settlement in terms of monetary value is only 66.54%, it stands at just 58.31% in terms of the number of policies. This means nearly 42% of customers are not receiving their rightful money on time upon policy maturity or even after the death of their family's sole breadwinner. While major institutions like MetLife Bangladesh or National Life maintain the sector's reputation by settling nearly 100% of claims, the entire sector is bearing the brunt of extreme irregularities and financial crises in a few companies like Fareast Islami Life, Padma Islami Life, and Sunflower Life.

A recent report by the international organization UNDP highlighted that the core reason behind this crisis is the companies' unchecked and excessive management expenses, which completely disregard regulatory norms. By spending hundreds of crores beyond the limits approved by the Insurance Development and Regulatory Authority (IDRA), regular customers' deposits or 'Life Funds' have been depleted. Even the state-owned Jiban Bima Corporation topped the list by spending an additional Tk246 crore and 7 lakh beyond the permitted limit for management expenses. Consequently, while assets remain visible, the sector suffers from a severe liquidity crisis when it comes to paying cash to customers upon maturity, shattering public trust in the entire insurance system.

Dr. Main Uddin, Professor at the Department of Banking and Insurance, University of Dhaka, told Agamir Somoy that looking at the financial statements of many insurance companies shows that their fixed assets, high-rise buildings, and investment volumes are increasing every year. However, it is tragic that after the maturity of ordinary customers' policies or in the event of an accident, the rate of claim settlements does not increase proportionally; rather, in many cases, it remains stagnant or is on the decline.

Urging strict intervention from the regulatory body, he said that IDRA should evaluate or renew licenses based not just on asset valuation, but also on the percentage of insurance claims successfully and timely paid. He added that unless strict legal and punitive actions are taken against companies that expand their assets but procrastinate on claim settlements, a resolution to this crisis is impossible.

When asked about the overall situation, IDRA spokesperson Saifunnahar Sumi told Agamir Somoy, "To address the trust crisis in the insurance sector, IDRA has strengthened its monitoring mechanism more than before. Strict directives with specific deadlines have been given to companies whose Claim Settlement Ratio (CSR) is unsatisfactory. If necessary, initiatives will be taken to liquidate fixed assets to pay off the customers' deposited money."