BSEC

Profits at most non-life insurance companies rose in the first quarter (January–March) of the current year compared to the same period last year mainly due to the introduction of zero commission in non-life insurance, cost cuts against the growth in marine insurance business.

Industry stakeholders attributed the increase to the introduction of zero commission in non-life insurance, companies’ efforts to reduce management expenses, and growth in marine insurance business. They also believe the sector could see further improvement if geopolitical tensions in the Middle East ease.

Stakeholders noted that regulators have long received complaints about irregularities involving individual agents, including excessive commissions, mis-selling of policies, misleading customers, unnecessary policy sales, and artificially inflated premium income shown on paper.

The Insurance Development and Regulatory Authority (IDRA) also have information that some companies used multiple software systems and undisclosed bank accounts to conceal commission-related transactions.

However, the removal of commissions is expected to reduce management expenses and lift profitability. As commission-based sales decline, unnecessary policy sales may also fall. Premium pricing could become more realistic and customer-friendly, artificial inflation of premium income may ease, and healthier market competition is anticipated.

According to Dhaka Stock Exchange (DSE) data, 39 of 43 listed non-life insurers have published their quarterly results so far. Of these, 31 reported higher profits in the first quarter compared to a year earlier, while eight reported lower profits. The remaining four companies have yet to release their results.

Non-life insurance companies primarily cover risks such as fire, health, motor, marine, engineering, and liability.

Strong performers

Desh General Insurance led the pack with profit growth of around 120%, posting a net profit of Tk44 lakh in the quarter against Tk20 lakh a year earlier. Its share price rose 2.54% to Tk24.20 today (2 June).

Peoples Insurance reported a 105% increase in profit, reaching Tk5.96 crore from Tk2.91 crore a year ago. The company said lower agency commission expenses, reduced operating costs, and fewer claim settlements helped cut costs, lifting profit, operating cash flow, EPS, and NOCFPS.

Phoenix Insurance recorded a 67% rise in profit, earning Tk2.62 crore compared with Tk1.57 crore in the same period last year. The company cited higher premium and other income for the growth, while investment gains improved NAV per share and stronger cash collections boosted NOCFPS. Its share price rose 4.36% to Tk43.10 today.

Pragati Insurance posted a 55% increase in profit, with EPS rising to Tk1.63 from Tk1.05 a year earlier. The company attributed the growth to higher operating and other income, improved premium cash collections, and gains in investments, dividend and interest receivables, and cash equivalents, all of which strengthened NAV per share. Its share price also rose 3.07% to Tk70.40 today.

Under pressure

Agrani Insurance reported a 48% decline in profit, with EPS falling to 17 paisa from 33 paisa a year ago. The company cited lower premium and other income alongside higher claim settlements as the key drivers of the weaker performance.

United Insurance posted a 46–47% decline in profit, with net profit falling to Tk1.07 crore from Tk2 crore, and EPS dropping to Tk0.24 from Tk0.45.

Speaking to TBS, Managing Director of United Insurance Khawja Manzer Nadeem said, around 15% of total income went towards claim settlements during the quarter, largely tied to a fire incident at the airport that required payouts to clients including Unilever. He noted that the company’s underlying business performance was otherwise positive, but the elevated claims overshadowed the gains.

Green Delta Insurance saw profit fall 29%, Mercantile Islami Insurance by 19%, and Rupali Insurance by 18% during the same quarter.

Overall, the majority of non-life insurers reported profit growth in the first quarter, though higher claims and softer investment income continued to weigh on a handful of companies.

https://www.tbsnews.net/economy/stocks/cost-cuts-commission-removal-drive-non-life-insurance-profits-higher-q1-1452771

The government is planning to form a capital market reform commission to bring transparency and restore investor confidence, according to officials at the Ministry of Finance.

The decision was taken at a recent budget-related meeting. It forms part of the ruling BNP’s broader commitment to reviving the capital market, which featured in the party’s election manifesto.

Ministry officials said the commission will work toward overall market reform, with the government also planning to focus on building a stronger bond and equity market.

Besides, the government is also planning to take steps towards ensuring the use of blockchain technology, create an investment gateway for non-resident Bangladeshis, and attract greater foreign investment.

The meeting was informed that Dhaka Stock Exchange’s (DSE) market capitalisation has dropped by Tk 33,000 crore, or 4.4 percent, between January 2024 and February 2026.

The bourse’s benchmark index, the DSEX, fell from 6,153 to 5,600 points in the same period.

The move follows reform efforts under the interim government, which had formed a five-member taskforce to recommend changes to the stock market.

The taskforce, after extensive stakeholder consultation, proposed amendments to several securities rules, many of which the Bangladesh Securities and Exchange Commission (BSEC) has since adopted.

In a successor note before leaving office, former finance adviser Salehuddin Ahmed said the BSEC was restructured after the interim government assumed office, and an external investigation committee was formed to look into 12 irregularities from the previous regime.

A taskforce was also formed that worked on reforming three major rules regarding margin loans, mutual funds and public offering issuance, he added.

Apart from these, another committee was formed to strengthen the BSEC and improve the capital market which also submitted a report including recommendations.

The recommendations were sent to relevant ministries to implement, Ahmed added in the note.

https://www.thedailystar.net/business/economy/news/govt-form-capital-market-reform-commission-4178086