Tk 7,000cr insurance claims unpaid as settlement rate stands at only 57pc: IDRA Chief

Around Tk 7,000 crore in insurance claims remain unpaid in Bangladesh, while the overall claim settlement rate stands at only 57 per cent, said Insurance Development and Regulatory Authority (IDRA) Chairman Mir Nadia Nivine.

She made the remarks on Monday at an event organised at the IDRA office to inaugurate the second phase of payment of outstanding claims to policyholders through the sale of assets of insurance companies.

“The overall claim disposal rate is 57 per cent. Naturally, an industry with such a disposal rate has a large amount of outstanding claims. According to IDRA estimates, around Tk 7,000 crore is due across the sector,” the IDRA chairman said.

She said the regulator is adopting a two-pronged strategy to address the backlog. IDRA is holding regular meetings with insurance companies to identify and resolve obstacles and compliance-related issues affecting claim payments. At the same time, seven to eight troubled companies are being monitored separately.

“We want to raise the 57 per cent claim settlement rate to at least 75 per cent. If we can achieve at least 75 per cent at the sector level, we will reach a significant milestone,” she said.

According to IDRA, the activities of around 72 insurance companies, excluding about eight life insurers, are being regularly monitored. Companies facing moderate difficulties are being engaged through regular meetings, while their financial capacity and claim settlement performance are being reviewed.

Meanwhile, in the second phase, claims of 5,868 policyholders from five life insurance companies will be paid within a week. The total amount is Tk 23.03 crore.

Padma Islami Life will pay Tk 12 crore to 3,600 policyholders, Homeland Life Tk 4.98 crore to 1,145, and Fareast Islami Life Tk 5 crore to 580 policyholders. Sunflower Life and Sunlife will pay Tk 55.30 lakh to 300 and Tk 50.18 lakh to 243 policyholders, respectively.

Earlier, on September 3, IDRA facilitated payment of Tk 14.51 crore to 2,549 policyholders of seven life insurers.

With the two phases combined, claims worth Tk 37.55 crore have been initiated for settlement to 8,417 policyholders.