Written by The Banking Post
Bangladesh’s major cities are witnessing rapid growth in megaprojects and high-rise buildings, yet most of these structures lack insurance coverage against earthquake damage, industry executives and disaster-risk experts have warned in the wake of Friday’s tremor.
A 5.7-magnitude earthquake struck Dhaka and nearby areas on Friday morning, damaging multiple buildings and causing at least six quake-related deaths. The incident has renewed concerns about the country’s preparedness for a major seismic event.
Insurance executives say key public infrastructures—including Dhaka’s MRT lines, elevated expressways, and major flyovers in both Dhaka and Chittagong—do not carry dedicated earthquake insurance. This leaves billions of taka worth of assets exposed.
Despite the rapid transformation of urban skylines with metro-rail corridors, elevated expressways, flyovers, commercial towers, and dense residential complexes, financial safeguards have not kept pace. Industry leaders say Bangladesh remains dangerously underprepared for the economic fallout of a significant quake.
“Many people do not realise that earthquake insurance is both available and affordable,” said Khaled Al Mamun, chief executive of Reliance Insurance PLC. He noted that premiums are relatively low, yet property owners show little interest due to misconceptions that disasters are unavoidable and compensation unlikely.
Executives explain that earthquake protection can be included as an add-on to fire and allied-perils insurance policies, providing coverage for structural damage to buildings, bridges, flyovers, and other infrastructures. Such policies can play a crucial role in financing repairs and speeding post-disaster recovery.
Bangladesh sits near multiple active fault lines, making even moderate quakes potentially devastating. Yet uptake remains extremely low.
Md Imam Shaheen, managing director and chief executive of Asia Insurance PLC, said only a small number of clients—mostly large industrial conglomerates—opt for earthquake coverage. “Those who take coverage generally include it under industrial all-risk policies. At the individual level, earthquake insurance uptake is almost zero,” he said.
Urban planners warn that the risk is compounded by weak enforcement of building codes and the construction of high-rises without adequate seismic design. Many older structures, particularly in densely populated areas of old Dhaka, are also vulnerable.
Despite repeated calls from seismologists and risk-management experts, Bangladesh’s insurance penetration remains below 1.0 per cent of GDP—far lower than regional and global averages—leaving the nation exposed to major financial shocks in the event of a strong earthquake.
