In 2023, Bangladesh's private insurance sector experienced sluggish growth, reflecting the broader economic challenges facing the country. The life insurance sector expanded by only 8.2%, reaching Tk 114.84 billion, which is a decline of over 2 percentage points compared to 2022. Meanwhile, the non-life insurance sector saw a meager growth of 1.74%, totaling Tk 42.351 billion, marking a significant drop of 8.56 percentage points from the previous year [8bf45231]. This slow growth has been attributed to high inflation, the devaluation of the local currency, and a general slowdown in business activities [8bf45231].
Since March 2022, the Bangladeshi Taka has depreciated by approximately 28% against the US dollar, exacerbating the financial strain on both consumers and businesses [8bf45231]. During the 37th annual general meeting of the Bangladesh Insurance Association (BIA), chaired by Nasir Uddin Ahmed (Pavel), industry leaders discussed these pressing issues. Narayan Chandra Rudra, CEO of Meghna Life Insurance, pointed out that rising prices of essential commodities and a lack of market confidence have severely impacted the sector [8bf45231].
Additionally, Md. Imam Shaheen, Managing Director of Asia Insurance, highlighted the correlation between the growth of non-life insurance and the overall economic performance of the country [8bf45231]. The report revealed that 46 non-life insurers generated Tk 59.533 billion in gross premiums, while 36 life insurers recorded Tk 122.735 billion in premiums [8bf45231].
This slow growth in the insurance sector is reflective of the broader economic challenges Bangladesh is currently facing, including a forecasted GDP growth of only 3.8% for FY 2024, as projected by the IMF [55074daa]. The combination of stagnant private investment, high inflation rates, and the depreciation of the Taka has created a challenging environment for businesses, including those in the insurance industry [3c33ae09]. As the country navigates these turbulent economic waters, the insurance sector's performance will be a critical indicator of overall economic health moving forward [7a48f311].