Agri, health insurance expansion key to restoring public confidence in sector

Bangladesh’s insurance sector suffers from significant shortcomings in fairness, policyholder rights and effective regulation, said Prime Minister’s Adviser on Finance and Planning Dr Rashed Al Mahmud Titumir.

He said restoring public confidence will require expanding agricultural and health insurance, introducing innovative products, accelerating digitalisation and strengthening the regulatory framework.

Speaking as chief guest at a seminar titled “Challenges, Prospects and the Way Forward for the Insurance Sector”, organised by the Insurance Reporters Forum (IRF) on Saturday, Dr Titumir said insurance penetration remains extremely low despite Bangladesh’s large population.

He urged insurers to diversify products and expand coverage, particularly for farmers and the healthcare sector, noting that health insurance is currently limited mainly to affluent groups and a small segment of salaried employees.

Titumir also said inadequate use of technology has deprived customers of quality services while increasing operational inefficiencies. Digitalisation, he added, would improve transparency, accountability and protection of policyholders’ rights.

Speaking as a special guest, Insurance Development and Regulatory Authority (IDRA) Chairman Mir Nadia Nivin said the sector’s reform agenda would rest on three pillars: restoring policyholders’ confidence, establishing insurance as a major source of long-term investment and strengthening institutional capacity.

She said settling around Tk7,000 crore in outstanding insurance claims is IDRA’s top priority. The regulator will hold separate discussions with insurers to identify financial and operational challenges and facilitate claim settlements by recovering blocked funds, selling non-core assets or liquidating treasury bond investments where necessary.

If significant liabilities remain after all available options are exhausted, IDRA may propose a one-time government bailout package. However, she said both insurers and the regulator must first complete necessary reforms and demonstrate that similar crises will not recur.

Mir Nadia Nivin said a strong insurance industry is essential for sustaining Bangladesh’s economic growth and achieving its ambition of becoming a trillion-dollar economy. As insurance companies are major institutional investors in many countries, a stronger sector would also deepen Bangladesh’s capital market and provide a stable source of long-term investment.

She also announced plans to formulate laws and regulations for microinsurance, establish a dedicated regulatory framework for Takaful (Islamic insurance), and introduce insurance-related departments, majors, minors and certification programmes at universities to develop skilled professionals.

Meaningful reform, she added, will require political commitment from the government, sincerity from insurance company owners and effective regulatory oversight.

Bangladesh Insurance Forum (BIF) President BM Yusuf Ali said many insurers can settle claims within 24 hours, but such achievements receive little attention, while delayed or disputed claims dominate media coverage. He called for greater recognition of the industry’s positive contributions to improve public perception.

S M Nuruzzaman, managing director and chief executive officer of Zenith Islami Life Insurance PLC, said the life insurance segment faces greater challenges than the non-life sector. He suggested easing asset management procedures and facilitating bank financing to address liquidity shortages and improve the financial health of struggling life insurers.

The seminar was chaired by Golam Mawla, president of the Insurance Reporters Forum.