Insurance sector reform must begin with settling Tk7,000cr claims: IDRA

Bangladesh's insurance sector is facing deep-rooted
structural weaknesses, weak governance and declining public confidence,
prompting calls from policymakers and industry leaders for stronger regulation,
wider insurance coverage and comprehensive reforms.
The issues were highlighted at a
seminar titled "Challenges, Prospects and the Way Forward for Bangladesh's
Insurance Sector" organised by the Insurance Reporters Forum (IRF) today
(27 June).
Speaking at the event, Prime
Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir said
many insurance companies lack strong asset management and investment
capabilities, with the life insurance segment facing particularly serious
challenges.
He stressed the need to expand agricultural and health insurance, noting that
despite Bangladesh's vulnerability to natural disasters, crop insurance remains
underdeveloped while health insurance coverage is largely confined to
higher-income groups and salaried employees.
Titumir also called for greater use
of technology to improve customer services and operational efficiency, saying
weak regulatory oversight, poor accountability and declining public trust have
become major obstacles to the industry's growth.
"The insurance sector needs a
strong, effective and market-friendly regulatory framework to ensure
accountability, protect policyholders and expand insurance coverage," he
said.
Addressing the seminar, Insurance
Development and Regulatory Authority (IDRA) Chairman Mir Nadia Nivin said
restoring policyholders' confidence, establishing insurance as a major source
of long-term investment and strengthening institutional capacity would be the
regulator's three key reform priorities.
He said settling around Tk7,000
crore in outstanding insurance claims is IDRA's immediate priority.
The regulator will work with
individual insurance companies to identify financial and operational
weaknesses, recover trapped funds, facilitate asset sales where necessary and
explore other measures to clear pending claims.
"If a significant liability
remains after exhausting all available options, the government may be
approached for a one-time bailout package," Nivin said, adding that
insurers and the regulator must first complete their own reform initiatives
before seeking government assistance.
He also announced plans to expand
microinsurance through microfinance institutions, develop a regulatory
framework for Islamic insurance (Takaful) and strengthen insurance education to
build a skilled workforce.
Bangladesh Insurance Association
President Saeed Ahmed, MP, said the insurance regulator should remain
independent of business interests and called for expanding mandatory motor
insurance and introducing new insurance products for emerging sectors.
Bangladesh Insurance Forum
President BM Yusuf Ali said coordinated efforts by the government, regulator
and insurance companies are essential to modernise the industry and make it
more transparent and customer-friendly.
Professor Dr Md Shahidul Islam
Jahid, chairman of the Department of Banking and Insurance at the University of
Dhaka, identified weak regulation, poor governance and a short-term profit
mentality as the sector's main challenges, while emphasising the need to expand
agricultural and climate-risk insurance.
Zenith Islami Life Insurance
Managing Director SM Nuruzzaman said the life insurance industry faces greater
challenges than the general insurance sector and called for easier asset
disposal procedures and improved access to bank financing.
Presenting the keynote paper, Monir
Hossain said modernising the insurance industry, strengthening governance,
accelerating digitalisation and ensuring customer-centric services are
essential to support Bangladesh's growing economy.
















