Bangladesh general insurance industry to reach over $800m by 2027

Written by Adam Cadle

02/06/2023

Bangladesh’s general insurance industry is projected to grow at a compound annual growth rate (CAGR) of 8.8%, from BDT64bn ($620.8m) in 2023 to BDT89.8bn ($809m) in 2027 in terms of gross written premiums (GWP), according to GlobalData.

According to GlobalData’s Insurance Database, the general insurance industry in Bangladesh grew at an estimated 9.6% in 2022. It is expected to grow at a similar rate over the next five years, supported by favorable regulatory developments to improve market practices aimed at enhancing customer confidence and increasing insurance penetration.

Aarti Sharma, insurance analyst at GlobalData, commented: “Bangladesh’s general insurance penetration stood at 0.15% in 2022, which is significantly lower compared to the penetration in regional economies such as India (0.95%), China (1.17%), and Japan (1.73%). To increase insurance awareness and attract new customers, the Government of Bangladesh and the Insurance Development and Regulatory Authority (IDRA) have proposed a series of steps to boost general insurance growth.”

The first major development towards increasing penetration is the introduction of a regulation on bancassurance in the country in 2023 to allow local banks to collaborate with life and general insurers to sell insurance products. The proposal is currently pending approval with the Ministry of Finance. Once implemented, Bancassurance will improve the financial literacy of the country’s population and increase awareness, which will support insurance growth.

Sharma continued: “In April 2023, the IDRA proposed changes in the solvency margins that the general insurers need to maintain their risk-bearing capacity. Insurance companies would be required to maintain the new solvency margins by establishing reserves from their profits or by injecting fresh capital. Once implemented, the amended limits will help in strengthening the solvency position of general insurers’ and improve risk management, thereby instilling consumer trust and supporting general insurance growth.”

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