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Bangladesh Insurance Market Report 2018-2019

Insurance Sector of Bangladesh – The Ultimate Guide 

The page is lastly updated on 17TH OF FEBRUARY 2019.

Bangladesh insurance market is in an upward trend despite the low penetration rate. It has potentialities to growth and advancement as opined by the insurance expert from home and aboard. Quite often the insurance professionals of the country require insurance information associated with Bangladesh insurance market. In this page (a 3,000-word guide) we have just attempted to compile information from reliable sources. You will get enough food for knowledge in your way to know about the Bangladesh insurance industry.

Bangladesh Insurance Market: An Introduction

The Economy of Bangladesh has rapidly been shifting from agricultural to the services sector. The role so played by the service sector is burgeoning as well. Insurance is one of the ingredients of the financial services industry has a lot to play if it is promoted properly. In this comprehensive and ultimate guide on the insurance sector of Bangladesh, we will walk you through the itineraries of the market. Let’s delve into the insurance market of Bangladesh.

Country Report 2017-2018


# Life insurance market premium is BDT. 77,484 million

# Non-Life insurance market premium is BDT. 26,899 million

# World market share is 0.02 percent

# Per capita spending on insurance is US$ 6.00

In spite of the stable growth rate (around 4%) of the Bangladesh insurance industry in the last few years, the expansion of the insurance business, particularly the non-life sector, has experienced a downward trend in the year 2016 because of poor investment and slowdown of economic activities led by the political unrest. The experts have the fear of what the industry was likely to have the similar experience in 2015.

According to the statistics of Bangladesh Insurance Association (BIA), the total premium income of private sector life insurance companies rose from Tk. 62,429 million in 2013 to Tk. 66,879 million in 2014. The gross premium income of non-life private sector insurance companies increased from Tk. 21,038 million in 2013 to Tk. 22,670 million in 2014 with a growth rate of 7.76%. In Bangladesh, marine insurance is considered to be the lifeguard for the non-life insurance business. Marine insurance completely depends on imports which have continuously being disturbed by the political unrest but the market is expected to improve in 2015.

Historical Background of Insurance Market in Bangladesh

Birth of Sadharan and Jibon Bima Corporation

Just after Liberation of Bangladesh in 1971, Sadharan Bima Corporation (SBC) and Jiban Bima Corporation (JBC) have been established under the Insurance Corporation Act 1973 as the state-owned organizations to deal with non-life and life Insurances respectively. SBC and JBC are the state-owned reinsurance service provider. Thereafter the permission was given to Private Insurance Companies to operate in accordance with the provisions of the Insurance (Amendment) Ordinance, 1984.

Insurance Admin -Switching from Commerce to Finance Ministry

Bangladesh Government has taken the decision to modernize the insurance law both Life and Non-Life insurance sector. In this context, on 27th July 2008 the cabinet approved two ordinances Insurance Regularity Authority (IRA) Ordinance 2008 and insurance Ordinance (IO) 2008. This two Ordinances will promulgate shortly after president’s assent. Also, Insurance Sector in Bangladesh transferred to Finance Ministry of Commerce Ministry by an executive order of Bangladesh Government.

Capital Requirement for Insurers in Bangladesh

Company Registered in Bangladesh (Non-Life):

A minimum Paid Up Capital of BDT 400 Million is required to be registered for insurance operation.

Company Registered in Bangladesh (Life):

Private Life insurers must have a minimum Paid-up Capital of BDT 300 million /USD 4.31 million of which the sponsor must pay 60% at the outset and the balance 40% by public subscription within three years.

Company Registered Outside Bangladesh:

Private Non-Life insurers must have a minimum Paid-up Capital of BDT 300 million /USD 4.31 million which has to be deposited in Bangladesh through remittance.

Legal Provisions for Insurance Operator in Bangladesh

Section 43 of the Insurance Act 2010 as specifies that:

Non-Life insurers must have assets invested in Bangladesh exceeding their liabilities by at least BDT 1 million or 20% of the net premium income whichever is higher.

Section 22 of Insurance Act 2010 specifies that:

Foreign Investors can hold or purchase shares of a company up to the prescribed limit by the Government and it won’t be higher than the prescribed limit

Legal Reserve for Unexpired Risks:

100 % is required for Marine Hull and Aviation Hull

40 % for all other classes. Some insurers carry over 50 percent

Compulsory Insurances in Bangladesh

  • Auto Third Party Liability for bodily injury and property damage (limited cover) is compulsory.
  • Aviation liability
  • All Imports must be insured in Bangladesh with state-owned Sadharan Bima Corporation or a private insurer, unless an exemption is obtained.

Insurance Companies in Bangladesh as of April 2018

Following the independence of Bangladesh in 1971, the insurance industry was nationalized in 1972 and the Government established 4 (Four) insurance corporations and in the year 1973 the structural arrangement of nationalization was changed into two corporations: (a) Sadharan Bima Corporation – For transacting non-life insurance business; (b) Jiban Bima Corporation– for transacting life insurance business.


In 1984, following changes in Government policies, it has allowed Private insurers.

But the insurance penetration in comparison with neighboring countries is still near to the ground owing to the fact that industry is faced with the challenges of creativity in need-based product design, determining affordable prices, delivering excellent claims services and above all, an acute lack of skilled insurance professionals across the sector.

Insurance Acts in Bangladesh

There are Acts related to insurance and current regulation are done by IRDA. The brief summary of each act can also be read here.

  • The Insurance Act 1938
  • The Insurance Rules 1958
  • The Insurance (Amendment) Ordinance 1984
  • Insurance Regulations 1990
  • Insurance Ordinance 2008
  • Insurance Act 2010
  • Insurance Development and Regulatory Authority Act 2010
  • Asian Reinsurance Corporation Act 2013
  • Insurance Corporation Act 2018 (The latest)

Regulatory Control of Insurance in Bangladesh

  • Just after Liberation of Bangladesh in 1971, Sadharan Bima Corporation (SBC) and Jiban Bima Corporation (JBC) have been established under the Insurance Corporation Act 1973 as the state-owned organizations to deal with non-life and life Insurances respectively.
  • SBC and JBC are the state-owned reinsurance service provider.
  • And thereafter the permission was given to Private Insurance Companies to operate in accordance with the provisions of the Insurance (Amendment) Ordinance, 1984.
  • Additionally, the supervision of the Insurance Sector has been shifted to the Ministry of Finance from the Ministry of Commerce by an executive order of Bangladesh Government.
  • On March 03, 2010 the Parliament has passed two insurance laws in a bid to further strengthen the regulatory framework for the insurance industry and make the industry operationally vibrant.
  • The new laws came into effect on 18 March 2010, are Insurance Act 2010 and Insurance Development Regulatory Authority Act 2010.
  • So far 08 Regulations have been formed in support of Insurance Act 2010.
  • In 2013, the Asian Reinsurance Corporation Act has been implemented in connection with Insurance Corporation Act 1973 in order to set up the state-owned insurance institutions.
  • Labor Act 2006 and 2016 guides the workers’ compensation insurance in Bangladesh.

Insurance Tariff in Bangladesh

Bangladesh is a Tariff Market for Fire Marine Cargo and Hull, Motor, Personal Accident Money Insurance, Workmen’s Compensation business are subject to Tariff.

  • Insurers of Bangladesh are bound by Insurance Tariff regulations in the country.
  • On the other hand; Engineering Insurances are so far a non-tariff business

Central Rating Committee

  • The Central Rating Committee headed by the Chairman of the Insurance Development Regulatory Authority (IDRA) is the highest Tariff Regulatory Body who also produces new Tariffs.
  • Under the Central Rating Committee, there are three sub-Committees for Fire Marine and Miscellaneous business.
  • To the cost of Insurance, there is government tax in the form of 15% VAT (Value Added tax) on payment paid by the insured.

Penetration Rates

  • Combined Premium in proportion to GDP is 0.09% (Life -0.07% and Non-life -0.02%)
  • Bangladesh ranks 76th in the world
  • World market share is 0.02 percent

Premium Income:

Combined life and non-life insurance market premium is BDT 76,785 million and Per capita, spending on insurance is USD 2.6

Taxation and Investment Regulation for Insurers in Bangladesh

Corporation Tax

Insurance Corporation Tax is between 42.5%. Value Added Tax 15%. There is also a nominal stamp duty on most classes of business. No Taxes are withheld from Premiums Paid overseas for Insurance and Reinsurance. Note: 100% export oriented organization as in the case of Insurance, enjoys VAT exemption.

Compulsory Cession to SBC
  • 50% of the re-insurable general insurance business of every insurer shall be reinsured with the State-owned Non-life Corporation-SBC and the remaining 50% percent of such business may be re-insured either with the Corporation or with any other insurer /reinsurer whether in or outside Bangladesh.
  • About 70% of premium income from the general insurance business in Bangladesh is retained locally and the rest 30%goes to reinsurers abroad.

Local Retention

  • Law prohibits fronting business
  • Local insurers are obligated to retain a portion of each and every risk
  • Reinsurance programme is guided by the objective of maximizing retention within the country

Reinsurance Pool

Currently, there is no reinsurance pool in Bangladesh.

Foreign Direct Investment in Bangladesh Insurance

Metlife (ALICO) is the only foreign insurance operator in Bangladesh. ALICO has earned the record-breaking gross premium in the life insurance sector. In April 2015, the regulator has approved another two joint venture life insurance companies in Bangladesh.

The new companies are Taiyo Summit Life Insurance Company, a joint venture with local summit group and another one -Life insurance corporation of INDIA. But there are still huge opportunities for overseas insurers in Bangladesh market.

With the advent of two newly established companies in 2015, the number of foreign insurers will reach at three who are supposed to make use of their international experiences to local policyholders. Resultantly the existing insurers will leave no stone unturned to retain their market share through innovation and professionalism.

Potentialities For Investors:

As the customer currently gets no risk improvement advice other than conventional and non-focused insurance solution based upon the premium rate set by Central Rating Committee (CRC), a wing of IDRA, the expectations of the customers exclusively revolves around the cost-effective as well as tailor-made products and the prompt settlement of claims. There is huge potentiality for social insurances in Bangladesh.

Customers’ Satisfaction in Insurance

Nowadays policyholders want online services such as online policy issuance, online complaint submission, online claim handling as well as a settlement as has already been in place in the banking sector. Innovative marketing methods and distribution channels i.e. Bancassurance can also be introduced as the existing penetration rate indicates the huge opportunity for professional insurers.

Regulatory Framework for Insurance

Insurance Development and Regulatory Authority Act 2010

In the year 2010, the Insurance Development and Regulatory Authority (IDRA), has been set up by the government, some ten months after The Insurance Development & Regulatory Act 2010 providing for such a body was passed by the Bangladeshi parliament. The new authority replaces the office of the Chief Controller of Insurance.

Regulatory Changes in 2013

With an eye to boosting the non-responsive life insurance sector of Bangladesh, the initiatives so far taken by the Government since the independence, has not been able to drive any radical change, other than a few steps successfully enacted in the last four year or so by IDRA, which has come into force under the auspices of the Insurance Development and Regulatory Authority Act – 2010.

However; the news of implementation of the 2013 regulatory order for allowing 60% Foreign Direct Investment (FDI) in the insurance sector is optimistic enough for the nation’s financial services industry because new entrants will introduce competitively priced need-based products for easy acquisition and/or retention of consumers and thus service standard will get better a lot.

National Insurance Policy -2014

Bank and Financial Institution Division have recently drafted the National Insurance Regulation -2014. The recommendation of the said regulation will surely improve the insurance market of Bangladesh as it has defined long-term and short-term goals.

Approval of Two Foreign Life insurers -2015

One Japanese and one Indian insurance companies have won the approval for insurance operation in Bangladesh.

Natural Catastrophes in Bangladesh: Note for Insurers


  • Floods are annual phenomena with the most severe occurring during the months of July and August.
  • Regular river floods affect 20% of the country increasing up to 68% in extreme years.
  • The floods of 1988, 1998 and 2004 were particularly catastrophic, resulting in large-scale destruction and loss of lives.
  • Approximately 37%, 43%, 52% and 68% of the country is inundated with floods of return periods of 10, 20, 50 and 100 years respectively (MPO, 1986).


  • March-April and October-November is the Cyclone time in Bangladesh
  • Flood hits normally in July-September which is a common feature of Bangladesh
  • Bangladesh is located in the Catastrophe region and Flood and Cyclone are the main catastrophes.
  • Devastating Cyclone occurred in 1970 where about one million people died.
  • In 2007, 2010 & 2011 we have experienced severe Landslide due to Rain / Flood water in Chittagong

If you have the suggestion for the improvement or enrichment of “Insurance Sector of Bangladesh – The Ultimate Guide”, you can send your valuable advice to our panel of editors.

Please spend two minutes by writing your comment in the comment box below.

(Lastly updated on December 2018)


Abdul Kadir ACII
Abdul Kadir ACII

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  1. M M Monirul Alam M M Monirul Alam

    -The regulatory information is helpful
    – The report covers mostly non-life business with focusing on potential of business with statistical data
    – Though report was published in 2018 but it covers the financial figures and data of 2013 & 2014.
    – Expecting more up to date statistical data and potential market in Bangladesh

    • Editorial Team Editorial Team

      Hi Monir,

      The updated date is under review.

  2. How Many Types Of Insurance Companies Are There 2018 - BDNarsingdi.Life How Many Types Of Insurance Companies Are There 2018 - BDNarsingdi.Life

    […] Bangladesh Insurance Market Report 2017 […]

  3. M M H Moon M M H Moon

    Dear Mr Kadir

    Thank you for sharing the regulatory key facts of BD Non-Life Insurance and BD market analysis.

    1. If you can also share link of original sources of your provided information, it would bring more authenticity to your report;

    2. My understanding is that this report does not provide enough enticing information to foreign investors as the market appears quite strict with extremely high corporate tax compared to other leading countries in insurance; and

    3. I believe adding some more genuine positive factors of BD Non-Life insurance market in your next addition, would be ideal.

    M H

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