A newly signed trade deal between the US and Bangladesh requires Bangladesh to remove the 50% mandatory cession to national reinsurer Sadharan Bima Corporation and opening the market to full competition.
The Bangladesh government under a new trade deal with the US has agreed to remove the 50% mandatory cessions by non-life insurers to state-owned Sadharan Bima Corporation (SBC). Currently, all non-life insurers are required to cede half of their reinsurance portfolio to SBC, that guaranteed the reinsurer a steady stream of premium income.
The changes are expected to create a structural shift in Bangladesh's insurance and reinsurance market, as international reinsurers will now freely operate in the market and help the insurance industry to strengthen risk management practices, improve service quality and enhance resilience.