Unsettled insurance claims have swelled to a staggering Tk 72.49 billion, highlighting deep-rooted inefficiencies in claim settlement and intensifying pressure on Bangladesh's insurance sector, sources say.
The latest data from the Insurance Development and Regulatory Authority (IDRA) shows a substantial portion of claims across both life and non-life segments remains unpaid, raising concerns over liquidity stress and weak compliance among insurers.
The life insurance sector recorded total claims of Tk 62.61 billion during the July-September quarter of the current fiscal year.
Of this, only Tk 22.75 billion was settled, yielding a settlement rate of 36.34 per cent.
As a result, Tk 39.86 billion remains outstanding, accounting for nearly two-thirds of total claims.
The backlog is even more pronounced in the non-life segment, where insurers settled just Tk 2.75 billion of Tk 35.37 billion in claims, reflecting a dismal 7.76 per cent settlement rate.
A massive Tk 32.63 billion - over 92 per cent - is still pending.
Combined, the two sectors have accumulated more than Tk 72.48 billion in unsettled claims, underscoring a systemic failure to ensure timely payouts to policyholders.
Sector insiders attribute the growing backlog to a mix of cash flow constraints, delayed documentation, and cumbersome verification processes, while policyholders increasingly complain of prolonged waiting periods.
Regulators have acknowledged the mounting risks.
Officials concerned say the IDRA is stepping up oversight by mandating detailed reporting on claim settlement performance and pushing for structural reforms within the authority to improve enforcement.
High-level review meetings are also planned with state-owned Jiban Bima Corporation and Sadharan Bima Corporation as part of efforts to address persistent settlement delays.
Experts caution that unless insurers significantly improve their payout capacity and efficiency, the ballooning unsettled claims could further erode trust in the sector and impede its expansion in a market still struggling with low insurance penetration.
The Financial Institutions Division (FID) under the Ministry of Finance has issued an urgent directive to IDRA to provide a "company-wise comparative statement" of these amounts.
The government is expected to summon the managing directors of the worst-performing insurance companies to explain why over 72.49 billion in policyholder money has not been disbursed, a senior IDRA official says.
"Insurance is a promise to pay," said a senior official of the FID.
"When funds of that promise remain unfulfilled, it is not just a financial issue; it is a crisis of national trust."
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