Performance analysis of Insurance Companies in Bangladesh: A Focus on Credit Rating

Abstract

Credit rating is an independent third-party evaluation that subjects all companies to the same rigorous criteria, providing a valuable benchmark for comparing companies, regardless of their country of domicile. Credit rating first originated in the financial market of the United States since the beginning of the 19th century and this service is now offered to the financial and capital market of all developed and almost in all developing economies of the world. This paper is an attempt to conceptualize credit rating of insurance companies’ procedure in Bangladesh and its importance. It has emphasized the comparative performance analysis between general insurance companies and life insurance companies in Bangladesh applying credit rating. The findings reveal that life insurance companies are in better position than general insurance companies. Finally it suggests some measures for eradicating the problems of credit rating.