Bangladesh: Low returns obtained from insurance fund investments – Asia Insurance Review

The insurance sector’s returns on investments, including securities and fixed assets such as land and
buildings, have been minimal. Thirty-two life insurance companies invested BDT139.49bn in government
securities, from which the return was 2.62%, or BDT3.65bn, in the first quarter of this year, according to
a report in The Daily Star citing the Insurance Development and Regulatory Authority (IDRA).
In the first quarter of the year, life insurance companies invested BDT24.7bn ($294m), or 8.48% of their
total funds in fixed assets. The return was only BDT100m, which is 0.40% of the investment. Life
insurance companies had a total BDT291.18bn invested in a range of different sectors. The highest
portion of the insurance funds— about 48%—was invested in government securities as insurers are
mandated to invest at least 30% of their funds in such instruments, said Mr. MohammodiKhanam, CEO of
Prime Insurance.
Life insurers had also placed BDT90.28bn in fixed deposits, which was 31% of their total funds as of
March this year. The return from the investment was almost 2% in the January-March quarter. The life
insurers had invested BDT24.2bn in the stock market, from which the return was BDT130m, or 0.54%, in
the first quarter. These returns have left the regulator concerned and it has asked insurance companies
to invest policyholders’ money wisely and boost the return on investment. Read More

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