Delays in Claim Settlements Raises Concern in Bangladesh’s Non-Life Insurance Sector

Dhaka – Bangladesh’s non-life insurance sector saw significant delays in claim settlements in 2024, with around 68% of submitted claims remaining unresolved, according to unaudited data submitted by 46 insurers to the Insurance Development and Regulatory Authority (IDRA).

Out of total claims amounting to BDT3,582.89 million during the year, only BDT1481.63 million (41%) were settled, leaving outstanding claims worth approximately BDT26,350 million (USD 217 million). The situation marks a slight improvement from 2023, when only 32% of claims were settled.

IDRA has expressed concern over the low settlement rate and announced plans to take action against underperforming insurers. A governance review meeting with company directors is expected soon.

Insurers attribute part of the delay to Sadharan Bima Corporation (SBC), the state reinsurer that handles 50% of the non-life business, claiming that slow reimbursements from SBC hinder their ability to pay clients on time. In contrast, foreign reinsurers, who cover the remaining 50%, are said to release payments more promptly.

SBC, in its response, pointed to incomplete documentation and delayed premium payments by insurers as reasons for the settlement lag.

Regulations require claims to be settled within 90 days, but this standard is frequently unmet. Delayed settlements have led to prolonged financial distress for many policyholders awaiting compensation.