Life insurers’ business premiums grow 25% in five years

Bangladesh’s life insurance business continues to grow steadily for the past five years by delivering a superior customer experience.

Life insurance businesses earned Tk10,260 crore in premiums in 2021, a 25.15 per cent increase from Tk8,198 crore in 2017, according to a financial report published by the Insurance Development and Regulatory Authority (IDRA).

And in 2021, life insurance premiums increased by 7.98 per cent to Tk10,260 crore, up from Tk9,501 crore the previous year.

Meanwhile, with almost 63 per cent of the market share, five companies currently dominate the country’s life insurance industry, indicating that the majority of such firms are yet to solidify their presence in this sector.

According to IDRA data, the industry’s all 33 life insurers collected Tk10,260.27 crore in premiums from January to December 2021, with five companies alone securing Tk6,492.17 crore.

The IDRA data – collected from unaudited financial reports submitted by the life insurance companies last year – shows that the top five industry players are MetLife, National Life Insurance, Delta Life, Fareast Islami Life Insurance and Jiban Bima Corporation.

People are becoming more receptive to purchasing life insurance for themselves and their loved ones, resulting in an increase in the number of companies entering this lucrative industry over time, according to industry insiders, who emphasize that only a few companies control the majority of the market.

The data shows that the multinational firm MetLife collected the highest amount of premiums reaching Tk2,932.34 crore as of December 2021, which is 28.57 per cent of the total premiums collected by life insurance companies during this period.

National Life Insurance is at the second position, collecting Tk1,377.58 crore in premiums as of December 2021  (13.42 per cent) of this sector. Delta Life and Jiban Bima Corporation collected Tk762.93 crore (7.43 per cent) of the sector.

Fareast Islami Life Insurance is next by collecting Tk757.22 crore in premiums in the same period (7.38  per cent) and Tk 662.10 crore (6.45 per cent) in premiums respectively as of December 2021.

The top companies are dominating the industry by providing superior customer service, especially by paying insurance claims on time, developing fresh products and offering modern insurance policies, industry insiders told The Business Post.

Speaking on the matter, IDRA Executive Director SM Shakil Akhter said: “Some companies are doing very well because they are focusing on upholding the customers’ trust. MetLife is particularly well-reputed for its various modern policies and customer service.

“Similar to MetLife, a number of other local companies have also developed a stellar reputation among their customers. Maybe this is why they are doing pretty well in the life insurance industry.”

Contacted, National Life Insurance’s Chief Executive Officer Md Kazim Uddin said: “Achieving and maintaining public trust is the most essential component of the life insurance sector. People currently lack trust in this industry.

“The key reason behind this issue is the companies who unnecessarily delay paying insurance claims. But some firms are upholding their hard-earned reputation by paying claims on time. This has helped their business get ahead of the competition.”

He continued: “The majority of life insurance companies are not paying claims. When a company refuses to fulfil ten customers’ claims, they share their negative experiences with a thousand others. Companies
upholding their reputation through good customer service are doing well, and those failing to do so are losing customers’ trust.”