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A majority of Bangladesh’s listed general insurance companies witnessed a decline in profits during the January–June period of 2025, largely due to a slowdown in marine and fire insurance sales as business activities across sectors continued to face headwinds.

Of the 37 general insurance firms listed on the capital market, 22 reported lower earnings, while 15 posted year-on-year profit growth, according to company disclosures. Their combined net profit stood at Tk 294 crore, marginally down from Tk 295 crore in the same period last year.

“The economy is going through multiple challenges, and the insurance industry is inevitably affected,” said Md Rezaul Karim, adviser at Pragati Insurance Ltd, speaking on Tuesday.

He noted that declining business volumes have significantly impacted the sale of marine and fire insurance policies. “Even those purchasing policies are opting for reduced coverage,” Karim said. “Where companies once insured assets worth Tk 1 crore, they are now insuring for half that amount—raising their risk exposure.”

Economic Backdrop

Bangladesh’s economy recorded 3.97% GDP growth in FY2024–25—the slowest in 34 years, excluding the Covid-19 period—due to weakened performance in the agriculture and service sectors, according to the Bangladesh Bureau of Statistics (BBS).

Meanwhile, inflation cooled to 8.48% in June, dropping below 9% for the first time in over two years.

Top Performers

Despite the overall sluggishness, a few companies managed to outperform:

• Reliance Insurance Ltd posted the highest profit, earning Tk 57 crore, up 17% year-on-year.
• Green Delta Insurance PLC followed with Tk 28 crore,
• Pioneer Insurance Co. Ltd with Tk 21 crore, and
• Pragati Insurance Ltd with Tk 18 crore.

However, only six firms posted profits above Tk 10 crore, while most others recorded earnings between Tk 1 crore and Tk 4 crore—indicating stagnation in the sector’s overall size.

Drop in Import-linked Insurance

The decline in letter of credit (LC) openings significantly affected marine insurance business. In June, LC openings fell to $4.14 billion—the lowest in nearly five years—according to Bangladesh Bank data.

“When LC activity falls, marine insurance sales automatically decline,” said SM Ibrahim Hossain, acting director of the Bangladesh Insurance Academy. He added that many local firms have shut down or are struggling post-election, further reducing demand for insurance coverage.

Unhealthy Competition Hits Bottom Line

According to Rezaul Karim, unregulated agent commissions are also eroding insurers’ profitability.

Though the Insurance Development and Regulatory Authority (IDRA) capped agent commissions at 15% of the premium, “many insurers are now offering 60–70%, especially amid fierce competition,” he claimed.

“This leaves very little margin to cover operational and administrative costs, let alone turn a profit,” Karim added. “While earlier only smaller firms engaged in this practice, now even large insurers are doing the same.”

Sector Still Oversized, Underperforming

Bangladesh has the highest number of insurance companies relative to the size of its economy, with 80 insurers operating in the country. By contrast:

• India has 58 insurers,
• Pakistan 54,
• Vietnam 53,
• Nigeria 57,
• Nepal 34,
• Sri Lanka 27,
• and Thailand 74.

“Some firms continue to perform well, backed by competent leadership and efficient teams,” said Hossain. “But many others have limited capacity and have been struggling year after year.”