Potential for Growth: Transforming Bangladesh’s Insurance Sector
Published onJune 1, 2019
The role of insurance in managing risks in an economy cannot be overstated. At a micro level, insurance safeguards households and companies from a myriad of risks. From a macro perspective, it reduces the financial burden on a government and creates a stable environment in which businesses can thrive and succeed. While Bangladesh has taken gigantic strides on the path to economic prosperity, its insurance sector is a vital area that requires considerable attention and can benefit significantly from regulatory reforms.
Currently, Bangladesh’s insurance sector comprises 46 general insurance companies and 32 life insurance companies. In addition, there are two state-owned insurance corporations―one in the general segment and the other in the life segment. According to a sigma report of the Swiss Re Institute, as of 2017, the gross premium volume of life insurance in Bangladesh stands at USD 974 million and that of non-life stands at USD 371 million.
Life insurance constitutes 73.5% of Bangladesh’s insurance market and non-life insurance, 26.5%. Micro-insurance and Islamic insurance (takaful) are also a part of Bangladesh’s insurance sector. In 2017, 2.20 million new life and 2.36 million and new non-life insurance policies were issued. Further, the number of active life insurance policies was 10.78 million in 2017. The assets of all insurance companies in Bangladesh stood at USD 5,810.61 million by the end of 2017, with an average growth rate of 13.83% from 2009. Investments in both life and non-life insurance companies have grown at an average rate of 14.95% during 2009–2017, with returns increasing from 8% to 11.5% during the same period. The life insurance sector has a competitive landscape, with market share being closely distributed among multiple players.Download File