The government is considering allowing more insurance companies although the chief controller of insurance (CCI) opposed letting any fresh company start operation in the already saturated market.
According to sources, the government is seriously contemplating allowing another 20 general and life insurance companies.
Around 120 companies and individuals seeking insurance licences have submitted applications to the insurance department, which is under the commerce ministry. And majority of these applicants is interested in life insurance business with Islamic principles, sources said.
Some lawmakers, former bureaucrats, corporate houses, and expatriate Bangladeshis having close link with the government high-ups are desperately lobbying for new licences for insurance business.
Presently, there are 43 general and 17 life insurance companies in business with state-run Sadharan Bima Corporation and Jiban Bima Corporation leading players in the market.
The CCI in a report last month opposed allowing any fresh company explaining that the existing firms are facing stiff competition.
The CCI recently submitted the report to the commerce ministry but the ministry asked it to submit another report with detail information about the strength of the insurance sector.
"It is really not a good move for the insurance sector as there are lots of companies facing severe competition," said an experienced insurer preferring not to be named.
Some of the companies are already planning to be merged to sustain business, he added.
Opposing the idea of allowing any new company, Chairman of Bangladesh Insurance Association Shamsul Alam said there is no need for any new company in the general business but there are some chances for life insurance business.
Life insurance business still holds tremendous potential with 140 million population in the country, he felt.
Presently, paid-up capital of Tk 15 crore is required for general insurance and Tk 7.50 crore for life insurance business.
