The real test for the new government will not be political rhetoric, but whether it can convert reform promises into measurable economic delivery.
“Every turning point in a nation’s history begins not with comfort, but with courage.”
With these words, B M Yousuf Ali, President of the Bangladesh Insurance Forum (BIF), set a reflective yet urgent tone at the National Print Dialogue of The Daily Observer.
Welcoming the emergence of the new government led by Tarique Rahman following what he described as a “decisive national mandate”, Yousuf Ali portrayed the political transition as a rare opportunity to restore economic confidence, institutional credibility and strategic direction after years of turbulence, financial distress and governance failures.
According to him, the new government’s starting phase has already created “a ray of light at the end of a long and uncertain tunnel” �" reviving hopes of rebuilding a nation weighed down by weakened institutions, eroded public trust, banking fragility and allegations of entrenched corporate and financial irregularities.
Yet optimism, he warned, must now be matched by execution.
“History has a tendency to repeat itself when reform remains rhetorical rather than institutional,” he observed, cautioning that without decisive governance reform and credible enforcement, public expectations could rapidly dissolve into frustration.
Yousuf Ali described the new administration’s maiden journey as both ambitious and consequential, noting that the government has prioritised restoring the rule of law, combating corruption, stabilising the economy, strengthening energy security, modernising infrastructure, expanding regional connectivity and rebuilding confidence in state institutions.
“The administration has already demonstrated intent through price stabilisation initiatives, anti-corruption drives, infrastructure modernisation, education reform and investment-oriented growth strategies,” he said.
However, he stressed that Bangladesh continues to confront formidable structural pressures: persistent inflation, liquidity stress in the banking sector, rising unemployment, energy insecurity, declining investor confidence, institutional fragility, urban congestion, climate vulnerability and widening governance deficits after years of political polarisation.
“The real test for the new government will not be political rhetoric, but whether it can convert reform promises into measurable economic delivery,” he remarked.
According to Yousuf Ali, sustainable recovery will require strengthening independent institutions, enforcing transparent financial governance, modernising the banking and insurance sectors, decentralising economic development beyond Dhaka, accelerating industrial recovery and establishing a rules-based administrative culture free from partisan influence.
“If political stability can be combined with economic discipline and institutional accountability, Bangladesh may enter a new phase of resilient growth. Otherwise, expectations could quickly turn into disillusionment in an increasingly demanding economic environment,” he warned.
Insurance Sector Demands Immediate Attention
“The more developed a nation becomes, the stronger its insurance sector tends to be.”
For Yousuf Ali, this reality carries profound implications for Bangladesh’s future.
He argued that the new government must recognise insurance not merely as a financial service, but as a strategic pillar of poverty reduction, rural development, social protection and long-term economic resilience.
Reviving Bangladesh’s struggling insurance industry, he said, will be indispensable to achieving sustainable growth, financial stability and inclusive national development.
The BIF president welcomed the government’s early welfare-oriented initiatives �" including rural infrastructure schemes, canal re-excavation projects, employment generation programmes, subsidised food distribution and family assistance measures aimed at vulnerable communities.
“These initiatives reflect an encouraging shift towards people-centred governance,” he noted. “But meaningful transformation will remain incomplete unless core financial institutions are reformed with equal urgency.”
Despite having more than 80 insurers, Bangladesh remains one of the least insured economies in Asia. Insurance penetration stands at barely 0.4�"0.5% of GDP �" dramatically below India’s 3.7% and far beneath the global average exceeding 7%.
According to Yousuf Ali, this reflects not a lack of market opportunity, but deep-rooted structural dysfunction.
“In every advanced economy �" from the United Kingdom and United States to Germany and Japan �" insurance serves as a pillar of economic stability, protecting households, industries, agriculture, healthcare systems and investments from financial shocks,” he observed.
He explained that strong insurance sectors mobilise long-term domestic savings, deepen capital markets, reduce post-disaster poverty and enable businesses to invest with confidence.
Bangladesh, by contrast, remains severely underinsured. Millions remain exposed to floods, fires, health emergencies, industrial accidents and business losses without any meaningful financial protection.
Yousuf Ali therefore urged the government to gradually introduce mandatory insurance coverage in strategic sectors such as healthcare, transport, factories, construction, agriculture and labour protection.
“A modern economy cannot achieve sustainable industrialisation, investment security or social protection without a strong insurance culture,” he argued.
According to him, mandatory coverage would widen financial inclusion, reduce the fiscal burden during disasters, protect vulnerable households from sudden economic collapse and strengthen Bangladesh’s attractiveness as an investment destination.
The crucial question he has raised: Will Insurance Anchor Bangladesh’s Economic Rebirth �" and Will the Government Act?
Reform Is No Longer Optional
Finance Minister Amir Khosru Mahmud Chowdhury on Thursday unveiled a people-centred national budget, which, according to Yousuf Ali, is expected to give greater prominence to the insurance sector�"now at a defining crossroads. “In the revised budget, we hope insurance sector reform will finally be accorded the national priority it clearly warrants,” he said.
Despite a population of nearly 180 million and acute vulnerability to climate-induced disasters, the BIF president noted that Bangladesh’s insurance industry remains one of the weakest pillars of its financial architecture.
The sector, he said, continues to suffer from chronic governance failures, political interference, delayed claim settlements, weak regulation, unfair competition, poor public confidence and limited rural outreach.
By 2025, unsettled insurance claims reportedly exceeded Tk 6,900 crore, while insured population coverage declined significantly despite expensive reform initiatives.
To reverse the decline, he called for sweeping structural reform: modernising the Insurance Development and Regulatory Authority, enforcing strict corporate governance, accelerating claim settlements, digitising insurance services, expanding bancassurance and introducing mandatory coverage across strategic sectors.
“Strengthening insurance would not only shield citizens and businesses from economic shocks and climate disasters, but also mobilise long-term domestic capital for infrastructure, industrialisation and investment-led growth,” he said.
Insurance: Bangladesh’s Overlooked Economic Catalyst
At a moment of political transition, Yousuf Ali believes Bangladesh has a rare opportunity to transform insurance into a major economic catalyst through reform, digitisation and stronger public-private collaboration.
“The insurance industry provides the risk protection that allows businesses to operate with confidence and economies to absorb shocks,” said B M Yousuf Ali, Managing Director and CEO of Popular Life Insurance Company PLC.
“Supportive policies, technological innovation and a modern regulatory framework can dramatically increase the sector’s contribution to national development.”
Despite persistent instability, gross premium income reportedly rose by more than 9% last year �" marking the third consecutive annual increase since 2020.
Yet Bangladesh remains dangerously underinsured.
While the country has achieved remarkable progress in garments, remittances and agriculture, its insurance sector continues to occupy the margins of economic policymaking.
This neglect is increasingly difficult to justify.
Bangladesh faces intensifying climate risks, rapid urbanisation, rising healthcare costs and expanding industrial exposure �" conditions that should naturally drive insurance growth. Instead, the sector has been constrained by regulatory inertia, governance failures, weak public awareness and recurring financial irregularities.
The Alarming Reality
A closer examination of Bangladesh’s insurance sector reveals a deeply troubling picture marked by structural fragility, chronic stagnation and weak regulatory enforcement.
The industry currently contributes only around 0.27% to GDP �" far below India’s nearly 4% and the global average approaching 7%.
Insurance penetration stood at barely 0.5% in 2022, while only around 19 million people out of a population exceeding 170 million possessed any form of coverage.
The contrast with regional peers is stark. Insurance penetration stands at approximately 5% in Malaysia, 2.3% in Vietnam and 1.9% in the Philippines.
Bangladesh’s insurance density remains exceptionally low at roughly US$12 per capita despite growing urbanisation, rising incomes and increasing climate vulnerability.
Health insurance �" a major contributor to premium income globally �" accounts for just 7% of the domestic market.
The sector’s deterioration, according to analysts, has been driven by years of politically motivated licensing, systemic irregularities, weak governance and ineffective regulation.
Critics allege that many insurance licences were distributed not to strengthen the market, but to facilitate private profiteering under political patronage.
The result has been declining public trust, delayed claims, poor innovation, weak competition and widespread exclusion from financial protection.
Millions of Bangladeshis therefore remain outside the safety net of life, health, agricultural and property insurance �" leaving the country increasingly exposed to both economic and climate-related shocks.
Yousuf Ali stressed that meaningful reform will remain impossible unless the Insurance Development and Regulatory Authority is granted genuine legal and operational independence.
“Unless the regulator is fully empowered to enforce accountability, reform will remain confined to paper and fail to address the sector’s deep-rooted crisis,” he warned.
A Turning Point �" Or Another Missed Opportunity?
Bangladesh’s insurance industry now stands at a decisive crossroads.
It can remain underdeveloped, underutilised and trapped in a cycle of mistrust �" or it can emerge as a cornerstone of national resilience, financial inclusion and sustainable economic growth.
The evidence from advanced economies is unequivocal: nations with strong insurance sectors are better equipped to protect citizens, mobilise domestic savings, absorb economic shocks and sustain long-term investment.
The question confronting the new government is no longer whether insurance reform is necessary, but whether it possesses the political courage and institutional resolve to deliver it.
If comprehensive reform is pursued with seriousness and integrity, insurance could evolve from one of Bangladesh’s weakest financial sectors into one of its most powerful engines of economic transformation.
