Page 42 - Digital Edition SIRC Supplement
P. 42
MARKET REPORT – PAKISTAN
Opportunities available
to boost growth
Despite the challenges facing Pakistan’s insurance market, there are opportunities
to be tapped on many fronts, says Mr Saifuddin N Zoomkawala of EFU.
With the global economic challenges and the need Insurance density
to meet local regulations and produce profitable As per statistics available, 2013 insurance premium contributes
returns, the only thing that remains constant is only 0.7% of Pakistan’s GDP. This shows very low penetration
“change”. Insurance Industry in Pakistan has seen several of insurance market as compared to India (3.1%), Bangladesh
peaks and troughs in recent years. (0.9%) and Sri Lanka (1.2%).
It is evident that the insurance industry has kept pace with One of the reasons for low penetration is due to checkered
the development of the economy and other sectors of the history of Pakistan insurance market as the country was
industry. partitioned in 1971 giving birth to Bangladesh.
Industry developments
According to Insurance Association of Pakistan data, 28 non- Further, it took steam out of insurance players when the life
life insurance companies are operating in private sector with sector was nationalised in early 1970’s; and after that, part of
written premium of PKR55 billion (US$550 million) in 2014 as non-life insurance business barred private insurance companies
compared to PKR49 billion in 2013, an increase of 12%, which from writing government interest.
is acceptable keeping in view global economic indicators and
law and order situation in Pakistan. Other factors which contribute to low penetration are
disparity of income; and the middle class having low disposable
The retained premium of the market was PKR27 billion income with a mindset that insurance is against the teachings
in 2014 as compared to PKR23.5 billion in 2013, showing of Islam, Pakistan being a Muslim State.
an increase of 15%. The underwriting profits were PKR4.75
billion (17%) against PKR3 billion (13 %) over last year, due Despite the shortcomings, Pakistan’s insurance industry has
to improvement in net claims ratio of 50% in 2014 against proved itself to be very dynamic and flexible in meeting the
54% in 2013. requirements of the market in providing insurance coverages
as needed.
Three players Adamjee Insurance, EFU General Insurance Market opportunities
and Jubilee General Insurance, share 57% of the market. The market has opportunities to tap on many fronts:
Agriculture and Livestock
Rising above the ordinary, soaring high to scale newer Pakistan being an agricultural country, its major crops is prone
heights is a way of life at EFU. Our credo is “Always give to the danger of Nat CATs like flood and rain on an annual basis.
our clients the best”. This has helped EFU to increase its lead There are several measures taken by the government to support
market share to 26.4% in 2014, writing premium volume of the farmers, such as providing them Crop Loan Insurance.
PKR14.5 billion. The retained premium was PKR6.5 billion Several companies are already supporting this venture and
with underwriting profit PKR1.3 billion. The total pretax profit hence fulfilling their corporate social responsibility.
worked out to PKR2.26 billion.
40 SIRC Supplement • November 2015 • www.asiainsurancereview.com
Back to Contents
