Life insurance losing trust: Income, assets rise, claims fall

Total premium income of life insurance companies in the country has declined. The amount of insurance claims settled has also decreased. In contrast, investment in the life insurance sector increased in 2024 compared to the previous year. At the same time, both the size of the life fund and total assets have grown.

At present, Bangladesh has 36 life insurance companies, including state-owned, private, and foreign firms. According to data from the Bangladesh Insurance Association (BIA), these companies earned total premium income of Tk 113.9 billion in 2024, down from Tk 115.11 billion in 2023. This represents a year-on-year decline of Tk 1.21 billion in premium income.

This information was disclosed at the 38th Annual General Meeting of the BIA, the association of insurance company owners, held recently at the Dhaka Club.

The ability of life insurance companies to settle claims largely depends on the size of their life fund. According to BIA data, the life fund of the life insurance sector stood at Tk 319.18 billion in 2023, which increased to Tk 332.32 billion in 2024.

The life fund is a special fund maintained by life insurance companies. It is built from premiums collected from policyholders and income earned through investments in various sectors. Claims payable to customers upon the death of a policyholder or the maturity of a policy are settled from this fund. In company balance sheets, the life fund is shown as a liability.

BIA data also show that investments by life insurance companies amounted to Tk 334.61 billion in 2023, rising to Tk 342.93 billion in 2024. During the same period, total assets of all companies increased by approximately Tk 18.5 billion.

An opposite trend has been observed in the non-life (general) insurance sector. In 2024, total premium income of 46 non-life insurance companies increased by 2.9 per cent compared to the previous year. Premium income in this sector rose from Tk 42.35 billion in 2023 to Tk 43.49 billion in 2024.

However, investment in the non-life insurance sector declined by Tk 1.58 billion during the same period. Investments stood at Tk 57.72 billion in 2023 but fell to Tk 56.14 billion in 2024.

Commenting on the reasons behind the decline in premium income in the life insurance sector, Jalalul Azim, chief executive officer of Pragati Life Insurance, told Prothom Alo, “If there is delay in settling insurance claims, market expansion is bound to be hampered. We hope that the initiatives taken by the Insurance Development and Regulatory Authority (IDRA) will succeed and help the insurance sector recover.”

According to data presented at the Bangladesh Insurance Association’s (BIA) annual meeting, foreign insurer MetLife topped the list in premium income among the country’s 36 life insurance companies in 2024. The US-based company, which has been operating in Bangladesh since 1955, earned Tk 33.1 billion in premiums.

Among local insurers, National Life ranked highest, with premium income of Tk 21.06 billion. Other companies recorded the following premium income: Delta Life Tk 9.53 billion, Sonali Life Tk 8 billion, Jiban Bima Corporation Tk 7.03 billion, Pragati Life Tk 5.82 billion, Popular Life Tk 5.31 billion, Prime Life Tk 3.81 billion, and Fareast Life Tk 3.77 billion.

Among these top ten companies, premium income increased year-on-year for MetLife, National Life, Delta Life, Jiban Bima Corporation, Guardian Life, and Pragati Life, while it declined for Popular Life, Sonali Life. Prime Islami Life, and Fareast Life.

Md Kazim Uddin, chief executive officer of National Life, told Prothom Alo, “We give the highest priority to settling customer claims. Our experience shows that when one claim is settled, ten new customers come forward to purchase policies.”

Md Kazim Uddin added that National Life’s premium income has more than doubled over the past five years. While premium income stood at Tk 10.78 billion in 2019, it rose to Tk 21.06 billion in 2024.

In 2024, the overall claims settlement amount declined by 7.79 per cent. While claims worth Tk 91.66 billion were settled in 2023, the amount fell to Tk 84.52 billion in 2024. In 2022, claims settlement stood at Tk 102 billion.

MetLife settled the highest amount of claims, totaling Tk 29.36 billion, followed by National Life, which settled Tk 12.04 billion.

Out of the 36 life insurance companies, 17 recorded negative growth in claims settlement. Among them, Fareast Life, Shanta Life, Homeland Life, Progressive Life, Golden Life, Baira Life, and Swadesh Life reported only nominal claims settlements. Ten companies settled claims worth between Tk 10 million and Tk 100 million. Many of these companies have no funds in their life fund.

Main Uddin, a faculty member of the Department of Banking and Insurance at Dhaka University, told Prothom Alo, “A decline in premium income in the life insurance sector means that more policies have lapsed this year. When claims settlement falls, people lose interest in purchasing new policies. For the sake of the life insurance sector—and the insurance industry as a whole—the IDRA needs to be more proactive.”

Correction: In the report titled “Life insurance losing trust: Income, assets rise, claims fall” published online on 3 January and on the Business page of the print edition of Prothom Alo on 4 January, there were factual inaccuracies in the list of the top 10 premium-earning companies. The revised list now includes Sonali Life, Guardian Life and Far East Life, while Meghna Life, Sandhani Life and Rupali Life have been removed. The correct company names have also been updated in the section titled “Who leads in premium income.”