Pakistan: Regulator promotes risk sharing through insurance pools
Source: Asia Insurance Review | Sep 2024
The Securities and Exchange Commission of Pakistan (SECP) has underscored the necessity of establishing insurance pools in the country.
This is to meet the objectives of the five-year ‘Insured Pakistan strategic plan, says the regulator as it releases a comprehensive report, titled ‘Insured Pakistan: Pools Dynamics’.
Pakistan is exposed to multiple risks such as disaster risks, energy and power sector risks, agriculture risks, etc., and yet the country remains largely uninsured, says the SECP. In the event of an undesired event, heavy reliance is placed on budgetary allocations for loss and recovery financing.
The insurance pools will serve as risk pooling mechanisms for managing large and specialised risks, the coverage of which an individual insurance company would not be able to handle both in terms of expertise and financial strength.
The pools shall not only help in managing these varied risks optimally and efficiently but also assist the insurance sector in expanding coverage and protection to the country.
The report provides an evaluation of the current insurance landscape and existing official insurance schemes. It discusses international case studies and examples, evaluates domestic legal and regulatory frameworks, and proposes an action plan for creating insurance pools in Pakistan, and emphasises the collective responsibilities of involved stakeholders. A