History of insurance in Bangladesh

History of insurance sector development in Bangladesh

  • The British rule ended in the Indian sub-continents in the year 1947 from when Bangladesh (the then East Pakistan) was a part of Pakistan (the then west Pakistan). During that period, there were 49 insurers operating in then East Pakistan with offices in Dhaka and Chittagong; but their reporting was to the principal offices located in the West Pakistan.
  • Subsequently Bangladesh achieved independence in 1971 from Pakistan. Just after 02 years of independence, abolishing all insurance companies of the country under the provisions of Insurance Corporation Act 1973, the government of Bangladesh has set up two corporations i.e. Sadharan Bima Corporation (SBC) and Jiban Bima Corporation (JBC) to deal with non-life and life Insurances respectively.
  • Thereafter; Insurance Corporations Act 1973 was amended to allow private insurance companies to operate side by side with these two state-owned corporations, providing direct insurance to the policyholders, and reinsurance to private insurers being functional under the auspices of Insurance (Amendment) Ordinance, 1984.
Insurance company in Bangladesh (2019)
Ownership Non-life Life Total
Govt. Owned 1 1 2
Private Sector 45 29 74
Foreign 0 2 2
Total 46 32 78
  • Besides; 1984 ordinance has compelled private companies to seek 100% reinsurance from corporations, and also reserved the public sector business (approximately accounting for 80% of the then market premium) to be underwritten exclusively by corporations. This limitation creates operational difficulties for private insurers.
  • Thereafter; for facilitating private companies, the Government modified the insurance business procedures with the introduction of the Insurance Corporations (Amendment) Act 1990, which allows private insurers to underwrite 50% of the public sector business through a national coinsurance scheme, and to reinsure 50% of the re-insurable amount with state-owned reinsurers.
  • In the March 2008, the supervision of insurance industry has been shifted from Ministry of Commerce to the Ministry of Finance, to which IDRA itself report.
  • In 2010, Bangladesh Parliament passed two acts for strengthening the regulatory framework for the insurance industry. The new laws, came into effect on 18 March 2010, are Insurance Act 2010, and Insurance Development and Regulatory Authority (IDRA) Act 2010 (InsuranceNews, 2018).

History of life insurance in Bangladesh

The history of life insurance business in the country dates back in 1900.  In the year 1947 when the British went back to the pavilion there were 03 insurers operating in the Bangladesh region. 

  • Habib Insurance Company Limited.
  • Eastern Federal Union Insurance Company Limited,
  • Muslim Insurance Company Limited and

In the Pakistan period, more or less 10 dedicated life insurers transact business. 

In the Bangladesh period, the then government has nationalized the insurance sector for the benefit of the market stability. Five companies were established to soak up, own and management corporations} of the seventy five existing insurance companies and these new companies were Jatiya Bima Corporation, Karnafuli Bima Corporation, Tista Bima Corporation, Surma Jiban Bima Corporation and Rupsa Jiban Bima Corporation. These four companies were in business from one Gregorian calendar month 1973 to fourteen could 1973.

Jiban Bima Corporation( JBC) is the state– run life insurance  established in Bangladesh under the Insurance Act 1938, Insurance Rules 1958, and related other laws enforceable in Bangladesh in Bangladesh Corporation Act 1973. The JBC started on 14 May 1973. The function and activities of JBC is significant for the economy of the country.

Subsequently the private life insurers came into the picture in 1985.

In the year 2022, there are 34 private life insurers in Bangladesh. 


History of General insurance in Bangladesh

After independence back in 1971, the general insurance business was also nationalized and fianally in the year 1973, Sadharan Bima Corporation (SBC) was established for non-life insurance. Afterwards the private insurers came into the picture in 1985.

Insurance Premium growth map

  • In the year 2018, 78 insurance company has earned the gross premium amount of BDT 103.84billion equivalent to USD 1.22billion. The premium development diagram from 2012-2016, is as under:
Year Total premium (life) Growth rate (%) Total premium (Non-life) Growth rate (%) Total premium (million taka) Increase rate
2012 65,869.60 5.32 2,2116.10 14.25 87,542.70 7.40
2013 66,006.00 0.21 2,2927.43 5.79 88,933.43 1.59
2014 70,784.10 7.24 2,4456.90 6.67 95,241.00 7.09
2015 73,236.44 3.46 2,6386.50 7.89 99,622.94 4.60
2016 75,861.98 3.59 2,7971.80 6.01 103,833.78 4.23
Average   3.86   8.12   4.98


A comparison with insurance markets in the SAARC region

Geographically Bangladesh is located in the South Asia where insurance sector is emerging due to modest GDP growth rate and high density of population in the ‘SAARC’ region.

  • In the last decade, the insurance sector of the South Asian market has been rapidly emerging, particularly in Sri Lanka and in India. There is a significant insurance penetration rate i.e. 3.69% in India despite the fact that the Indian growth has been occasioned by agriculture and health insurance. However; their highest premium generating premium portfolio, is automobile insurance.

                   Source: Swiss Re- sigma -3/2018

  • In comparison with Sri Lankan market, Bangladesh insurance has a lot of scopes to expand. The market premium in Sri Lanka is higher than that of Bangladesh through Sri Lankan population is about one-third of Bangladesh.
  • Talking about Pakistan insurance market, it has been improving in the last 5 years particularly the Life Insurance sector with a tremendous growth of 30 to 35% annually (Pakistan Economist, 2018). Nevertheless; insurance penetration rate is less than 1% in Pakistan.
  • Talking about the insurance market in Nepal, the total size of the insurance market has reached to Rs. 57.53 billion (USD 517m) in the year 2017, according to a report of the Himalayan Times (HimalayanTime, 2018). Beema Samiti (BS) is the regulator of the Nepalese Insurance sector. Currently there is neither insurance premium tax nor composite insurance company in Nepal.
  • According to India Brand Equity Foundation, the countries insurance industry is expected to reach USD 280 billion by 2020 (IBEF, 2018). In the year 2017, the insurance penetration rate was 3.69%, which was 2.71% in 2001. The main driving force of Indian market, is mainly of the increase in insurance awareness among the potential customers, and partly of availability of products through multiple distribution channels. In the recent past, non-life sector has experienced an overall growth rate of 17.50% year-on-year. With 48% market share of in the life, and 89% in the non-life segment, the private insurance companies still have huge growth potentials.


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