Q2 findings reveal a mixed performance in the general insurance sector, with marine insurance showing signs of recovery
Bangladesh's Marine Insurance Industry Shows Signs of Recovery Amidst Challenges
The marine insurance industry in Bangladesh has faced a tumultuous first half of 2025, with most listed general insurance companies experiencing a decline in profits. This contraction is primarily attributed to the country's dollar crisis and the subsequent reduction in imports and letters of credit (LC) openings.
According to a review of financial statements from 43 insurance companies listed on the Dhaka Stock Exchange (DSE) for the April-June 2025 quarter, 22 out of 37 general insurance firms experienced profit declines compared to the same period a year earlier. However, 15 firms recorded profit growth, with Reliance Insurance Limited posting the highest profit of around Tk 57 crore (a 17% year-on-year rise).
The marine insurance sector has been heavily impacted by the drop in marine insurance policies, correlating with the decrease in import activities and LC openings. In June 2025, LC openings hit a 58-month low at $4.14 billion.
Competitive pressures have also strained profitability, with excessive agent commissions far above the regulatory cap of 15% being paid by some insurers up to 60-70%. This practice has squeezed margins and profits among the listed insurers.
Despite these challenges, there are signs of a gradual recovery in the marine insurance segment. Reliance Insurance, for instance, has reported a 17% year-on-year profit growth, driven by higher premium income and investment returns. Similarly, Meghna Insurance recorded a 500% year-on-year profit surge in Q2 2025, with an EPS of Tk0.30.
Khawja Manzer Nadeem, managing director of United Insurance, stated that the company achieved strong growth in the April-June quarter of 2025, with over 60% of their business coming from marine insurance. He expects this segment to expand further now that the tariff issue has been resolved.
Sonar Bangla Insurance, Phoenix Insurance, United Insurance, Peoples Insurance, and Sena Kalyan Insurance also reported significant profit growth in the April-June quarter of 2025, compared to the same period of the previous year.
It's important to note that marine insurance provides financial protection against losses or damages to ships, cargo, and other marine assets during transportation by sea or river.
Broader insurance industry challenges persist, including low insurance penetration (only 0.5% compared to neighbors) and trust deficits related to claim settlement ratios, which can indirectly affect marine insurance demand and insurer financial health.
In summary, after the dollar crisis in Bangladesh reduced import activity and LC openings, the marine insurance segment suffered notable contraction, significantly impacting the profitability of most listed insurance firms on the Dhaka Stock Exchange in early 2025. Nevertheless, some firms have managed to grow profits, and recent data suggest a tentative marine insurance recovery in the second quarter of 2025. Competitive commission practices and regulatory challenges continue to affect overall insurer profitability.
[1] Source: The Financial Express (Bangladesh) [2] Source: The Daily Star (Bangladesh) [3] Source: The Business Standard (Bangladesh) [4] Source: The Dhaka Tribune (Bangladesh) [5] Source: The Financial Express (Bangladesh)
The marine insurance industry's gradual recovery, as evidenced by certain companies like Reliance Insurance and Meghna Insurance, offers promise for business development in the face of challenges posed by the dollar crisis and import reductions. However, the broader finance industry still grapples with issues such as low insurance penetration and trust deficits, which may indirectly impact the marine insurance sector. In order to fully recover, it's crucial for the industry to address these challenges and foster an environment conducive to growth in both the marine and overall insurance businesses.
