More than a year since bancassurance was introduced in Bangladesh, the benefits have proven uneven across the insurance industry.

Some 8,413 insurance policies have been sold through bank branches as of December 2024, according to the Insurance Development and Regulatory Authority (IDRA), but since then sales have increased. 

Under bancassurance, life insurers have dominated sales, with 6,544 policies sold, compared to just 1,869 by non-life insurance firms.

Since its launch in December 2023, 15 insurers and 12 banks have received regulatory approval so far to operate bancassurance businesses.

Of these, National Life Insurance PLC alone have sold 4,554 policies through bancassurance channels.

At the other end of the spectrum, City Insurance PLC said it has yet to sell a single policy through this route.

The introduction of selling insurance products through bank branches was meant to extend insurance coverage in Bangladesh, where penetration remains among the lowest in the world.

More than 1.89 crore people in Bangladesh now have some form of insurance coverage, according to IDRA.

Although bancassurance is still in its early stages, some industry leaders are optimistic. 

Although still in its infancy, bancassurance is slowly gaining ground as banks and insurers navigate early challenges, with industry leaders betting on trust, digital integration, and regulatory reform to unlock future growth.

"Insurance is a relatively new product for banks to offer, so our priority has been on alignment, support and understanding," said Ala Ahmad, chief executive of MetLife Bangladesh. "While it is still early days, the response has been encouraging."

SM Baki Billah, head of bancassurance at National Life Insurance, said that as of April we have sold 34,981 policies have been sold under the bancassurance. All their policies so far had been sold in Dhaka. 
"But we'll soon expand policy sales through banks to district towns as well," he said, adding that the model could also help curb corruption in the sector.

Initially, low awareness and a preference for traditional sales channels hindered adoption.

But industry insiders say rising financial inclusion and growing trust in banks have helped shift perceptions.

The long-term success of bancassurance, they believe, will depend on continuous customer education, transparent operations, and the smart use of technology.

Guardian Life Insurance Ltd has sold more than 5,100 policies to date. 

"Bancassurance holds immense potential to transform Bangladesh's insurance sector by offering customers trusted and convenient financial protection through banks," said Sheikh Rakibul Karim, acting chief executive of Guardian Life Insurance.

However, Karim pointed to a regulatory cap on partnerships that is limiting growth. 

"Many banks are showing interest in partnering with us but haven't been able to meet their quotas due to the limited number of eligible insurers. Unfortunately, we are unable to accommodate additional banks as we are already working with three," he said.

At present, each bank is allowed to partner with up to three life and three non-life insurers. Officials said a proposal has been submitted to the Bangladesh Bank to raise this cap to six in each category.

Delta Life Insurance Company has also seen traction, having sold over 1,093 policies through banks so far.

"Sales will increase further in the coming days," said its CEO Uttam Kumar Sadhu.

Requesting anonymity, a senior official at Green Delta Insurance PLC said, "The number of policies sold isn't very high yet, but the growth trajectory is promising."

Md Shamim Hossain, managing director of City Insurance PLC, said, "Currently, only health, motor, weather, and crop insurance can be sold through bancassurance. With motor insurance no longer mandatory, sales have declined." "Moreover, we don't offer weather or crop insurance products, so our potential through this channel remains minimal."

City Bank, which has sold 15,145 policies, has seen a generally positive response as of April this year. 

"Customers generally trust banks more than insurance companies, which has contributed to a positive response," said Ashanur Rahman, the bank's deputy managing director. "This trust could significantly improve insurance penetration in Bangladesh."

Rahman added that continued success would require public education, transparency, and digital integration.

BRAC Bank said it is tapping into digital platforms for the bancassurance business. 

"To change the perception of insurance as an expense, we are embedding it into products like credit cards, personal loans, home loans, remittance accounts, and DPS," said Syed Abdul Momen, the bank's deputy managing director.

The bank is leveraging its digital platform, Astha, to offer integrated insurance services. It has sold 4,562 policies to date.

As of now, Eastern Bank PLC has sold 1,426 non-life and 204 life insurance policies under its bancassurance channel.

Md Raquib, acting head of bancassurance at the bank, said that as banks are not permitted to sell major non-life products, such as fire and marine insurance, the business has been challenging.

"This restriction is a challenge for banks with an established base of SME and corporate clients who require such coverage as part of their business operations," he added.

Md Solaiman, deputy director of IDRA's non-life department and acting spokesperson for the regulator, described the current numbers as encouraging. 

"Bancassurance has helped improve public perception of insurance," he said. "With more promotion and awareness campaigns, policy sales could rise further."