Written by The Banking Post
Unsettled insurance claims in Bangladesh have surged to Tk 72.49 billion, exposing deep inefficiencies in claim settlement and mounting pressure on the sector’s credibility.
Data from the Insurance Development and Regulatory Authority (IDRA) shows that a significant portion of claims in both life and non-life segments remains unpaid, pointing to liquidity constraints and weak compliance among insurers.
In the life insurance segment, total claims stood at Tk 62.61 billion during the July–September quarter of the current fiscal year. Of this, only Tk 22.75 billion was settled, translating into a payout rate of 36.34 per cent. The remaining Tk 39.86 billion—nearly two-thirds—remains outstanding.
The situation is even more alarming in the non-life segment. Insurers settled just Tk 2.75 billion out of Tk 35.37 billion in claims, reflecting a settlement rate of only 7.76 per cent. As a result, Tk 32.63 billion—over 92 per cent—remains pending.
Combined, the backlog across both segments highlights a systemic failure in timely claim disbursement.
Industry insiders attribute the growing pile of unpaid claims to cash flow shortages, delayed documentation and cumbersome verification processes. Policyholders, meanwhile, report prolonged delays in receiving payments.
Regulators have acknowledged the risks and are stepping up oversight. Authorities have instructed insurers to submit detailed reports on claim settlement performance, while high-level review meetings are planned with state-owned insurers to address persistent delays.
The Financial Institutions Division has also directed the regulator to prepare a company-wise comparative report on unsettled claims. Officials say the worst-performing insurers may be called in to explain the backlog.
“Insurance is a promise to pay,” said a senior official. “When that promise is not honoured, it becomes not just a financial issue but a crisis of trust.”
Experts warn that unless insurers improve payout efficiency and strengthen governance, the growing backlog could further erode public confidence and hinder the sector’s long-term growth.
