In 1972, Bangladesh nationalized its insurance industry, except for postal life and foreign life insurance. In 1984, the government allowed private insurance companies to operate. Since then, Bangladesh’s insurance sector has shown significant growth. According to the most recent data from the Insurance Development and Regulatory Authority (IDRA), the nation currently accommodates 81 insurance companies, encompassing 35 life insurance firms and 46 non-life insurance entities. These insurers collectively extend coverage to approximately 18.97 million individuals across a diverse range of policies. The IDRA was established in 2011 to oversee the insurance industry and protect policyholders’ interests.

In the life insurance sector, the leading companies by market share are MetLife (American Life Insurance Company) at 27.10%, National Life Insurance Company Limited at 14.10%, and others. In the non-life insurance sector, the prominent companies with the largest market share are Sadharan Bima Corporation at 11.03%, Green Delta Insurance Company Limited at 9.12%, and others. The total assets of insurance companies by the end of 2022 rose to Tk 63,629.05 crores, reflecting a notable increase of 3.34% from the previous year. Additionally, the investment amount for 2022 reached Tk 46,484.32 crores, showing a growth of 1.15% compared to the previous year.

The insurance sector in Bangladesh exhibits significant potential attributed to economic expansion, industrialization, heightened per capita income, and increased life expectancy. Nonetheless, apprehensions arise concerning the minimal insurance penetration ratio, presently resting at a mere 0.5 percent. Reasons for this include trust issues, a shortage of trained professionals, and lack of awareness programs. The claim settlement ratio decreased to 68% in 2021 from 88% in 2020, contrasting the global average of 98%. Additionally, there are issues with the monitoring and supervision of private insurance companies, leading to investment losses and liquidity crises due to corruption and financial irregularities.

The insurance sector needs modernization to address distrust. Companies must attract new policyholders and satisfy current consumers. It’s important to incorporate insurance education into school curricula. The government must oversee the sector, ensuring timely claim settlement to build trust. Diversified products should be designed based on customer demand, and liquidity constraints minimized. Regulatory authorities should continuously monitor insurance companies. In December 2023, the Bangladesh Bank and the Insurance Development Regulatory Authority introduced Bancassurance agreements and guidelines, potentially transforming the traditional insurance landscape in Bangladesh.