Insurance sector gains ground on four key indicators

Bangladesh’s insurance sector saw growth in premiums, assets, investments and policies in 2025, driven by improved political and economic stability, the end of agent commissions, higher premium rates and increased returns on fixed-income assets.

The gross premium income of life and non-life insurance companies in Bangladesh increased to Tk 19,485 crore in 2025, from Tk 18,355 crore in 2024, according to a publication by the Financial Institutions Division.

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The sector’s total assets rose from Tk 68,435 crore in 2024 to Tk 71,694 crore in 2025, while investments increased from Tk 51,569 crore to Tk 53,509 crore during the same period.

Meanwhile, the number of life insurance policies increased significantly, from 70.89 lakh in 2024 to 76.04 lakh in 2025.

The modest growth in premiums, assets and investments in 2025 can be attributed to improved political and economic stability and an easing of the dollar shortage compared with 2024, said AKM Monirul Hoque, chairman of Nitol Insurance PLC.

The growth was driven mainly by life insurers through new and renewed policies, continued premium payments, group life renewals, endowment policies and a small contribution from bancassurance, he said.

According to him, the non-life sector’s contribution was negligible due to intense competition, high business-production commissions, thin premium rates and pressure on underwriting margins.

Meanwhile, Ahmed Saifuddin Chowdhury, managing director of Bangladesh General Insurance Company PLC, attributed the company’s improved performance partly to the discontinuation of agent commissions, which he said had reduced costs and unhealthy competition.

The company’s overseas market also contributed, as support from overseas insurers enabled it to settle claims quickly despite lower premium rates, he said.

He cited a total loss claim of around Tk 64 crore involving Indian company VIP Industries, which the company settled through the overseas market before receiving the corresponding amount from Sadharan Bima.

The swift settlement improved client satisfaction and helped increase the company’s share of VIP Industries’ business from around 30 percent to almost 60 percent, Ahmed said.

The increase in business, combined with savings from the elimination of commissions, contributed to growth in policies, premiums and investments, he added.

Adeeba Rahman, sponsor director at Delta Life Insurance Company and first vice-president of the Bangladesh Insurance Association, said higher premium rates, driven partly by inflation, and customers opting for higher sums assured had boosted premium income.

Asset growth was largely a result of higher premium collection, while increased interest rates on fixed-income assets such as government bonds and FDRs improved investment returns, she said. Insurers are also making investment decisions in a more compliant and planned manner, improving both the quality and volume of investments, she added.

Adeeba attributed the rise in new policies partly to greater financial awareness among customers. Training has also enabled agents to sell products based on customers’ needs, encouraging new policy uptake, she added.

Alpha Islami Life Insurance’s business grew by nearly 20 percent from 2024 to 2025, largely because business activity was severely disrupted by the turbulent political climate in 2024, said Nura Alam Siddikie Ovee, chief executive officer of the company.

He said the company was unable to operate normally for three months -- June, July and August -- as employees could not travel to the field and customers were affected by widespread uncertainty and unrest.

According to Nura Alam, the improvement in 2025 was primarily driven by a more stable business environment, with no major protests.

The difficult financial conditions experienced in 2024 also encouraged him to focus more strongly on business and income generation in 2025, he added.

Ala Ahmad, chief executive officer at MetLife Bangladesh, said the life insurance industry’s positive momentum highlights an important reality: more people are recognising insurance as an essential safeguard against uncertainty.

As this trust grows, it becomes even more important for insurers to honour the promises made to customers through swift claims settlement and a continued commitment to building confidence in the industry, he said.

Md Main Uddin, professor of the Department of Banking and Insurance at the University of Dhaka, said the improvement in economic indicators could partly reflect greater public confidence following the country’s democratic transition.

He said Bangladesh’s population remains deeply divided along political lines, with most people identifying with one of the major political parties, and argued that political stability can influence investment and economic activity.