Life-insurance industry gasps under an unsettled claims buildup of Tk 44.12 billion by latest official count, with Fareast Islami Life Insurance alone accounting for more than three-quarters of the total.
Data from the Insurance Development and Regulatory Authority (IDRA) opens up the industry wounds and woes of policyholders, especially those from the far-flung backwoods.
The size of the backlog signifies a long-running problem of delayed claims, which has weakened confidence in the insurance industry, particularly among small and rural policyholders with limited means to pursue their claims.
Fareast Islami Life had Tk 33.10 billion in unsettled claims, or more than 75 per cent of the sector's total, as of last March.
Padma Islami Life had Tk2.60 billion, followed by Sunflower Life with Tk2.08 billion, Progressive Life with Tk1.59 billion and Baira Life with Tk 300 million.
The Financial Express has obtained an individual case involving Fareast Islami Life in which the policyholder has reportedly been trying for a long time to recover Tk 131,296 without success.
The backlog is particularly striking when compared with the amount settled during the latest quarter. Life insurers paid Tk 24.02 billion in claims between January and March 2026.
On part of the regulator, the IDRA has stepped up efforts to accelerate claim settlement and restore confidence in policyholders.
At a ceremony in the IDRA conference room on Thursday, IDRA chairman Mir Nadia Nivin handed over claim cheques to policyholders of seven life-insurance companies.
According to the IDRA, Tk145.10 million was paid to 2,549 policyholders by 94 cheques at the event.
The payments covered policyholders of Baira Life, Fareast Islami Life, Golden Life, Homeland Life, Padma Islami Life, Progressive Life and Sunflower Life Insurance.
"Ensuring timely payment of fair claims of policyholders is one of the main priorities of IDRA," Mir Nadia Nivin said at the cheque-distribution programme.
"To rebuild public confidence in the insurance sector, the speed and transparency of claim settlement must be further increased. IDRA will take all necessary steps to protect the interests of policyholders," she added.
The Tk145.1 million paid at the ceremony represents less than 1.0 per cent of the sector's Tk44.12-billion unsettled claims, signifying the scale of the challenge facing the regulator and insurers.
The regulator said faster settlement of claims would help protect policyholders' financial rights and rebuild public confidence in the life insurance sector.
The prolonged accumulation of unpaid claims reflects broader financial and structural weaknesses in Bangladesh's life-insurance industry, according to Afsar Ahmed, an actuary familiar with the country's insurance sector.
"The life-insurance industry in Bangladesh is not in its best shape. Many companies cannot meet the claims payments already due," he said.
Some insurers had recently struggled to pay staff salaries, while many companies had "top-heavy management and business acquisition structures", he said.
A major concern is the cost of acquiring new policies, which can exceed one and a half times the first-year premium in some cases, according to the actuary. Companies can then lose policies within a year, leaving them with high acquisition costs without enough time to recover the expense through future premiums. Such costs ultimately have to be absorbed through capital, profits or other income, he said.
Mr. Ahmed, who lives in Australia, also criticised the way life funds are invested, saying that there was little evidence of insurers matching expected future cash outflows with appropriate future income and liquid assets.
"Many companies have sufficient assets but do not have cash to pay claims," he said.
This mismatch between assets and liquidity can make it difficult for insurers to meet claims even when their balance sheets appear to contain sufficient assets, he added.
The cost of acquiring new business also remains high despite efforts by the IDRA and the government to reduce commissions.
The overall remuneration associated with procurement remains elevated because of multiple layers in the distribution structure and weak monitoring of the implementation of IDRA directives, he pointed out.
Mr. Ahmed said he had repeatedly advised companies for which he served as consulting actuary to stop selling policies that required partial payments within two or three years of inception. "Some heeded my advice and some did not," he said. Those that did not were now facing difficulties.
"To my knowledge, none of these companies also had an investment strategy matching projected income and outgo," Ahmed said.
The country has 36 life-insurance companies, including the state-owned Jiban Bima Corporation.
