Insurance in Pakistan
Insurance in Pakistan is regulated under the Insurance Ordinance, 2000.[1] In the past few years, it has transformed into a developing and fast growing market that is generally divided into three components: life insurance,[2] general insurance and health insurance. The Government of Pakistan established the Department of Insurance in April 1948 as a department of the Ministry of Commerce; the aim of this department is to take care of affairs related to the insurance industry. Out of the 54% that Pakistan's service sector contributes to the national GDP, insurance, along with transport, storage, communications and finance occupy 24% of the sector.
Companies
List of notable insurance companies in Pakistan:
- State Life Insurance Corporation of Pakistan
- Alfalah Insurance Company Limited
- Adamjee Insurance Company Ltd
- EFU Life
- Jubilee Life Insurance Company Limited
- Askari General Insurance Company Limited
- Universal Insurance Company Ltd
- The United Insurance Company of Pakistan
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The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remained very modest as compared to other jurisdictions while the insurance sector remained underdeveloped relative to its potential. The Pakistani insurance market has undergone major structural changes in last few years through mergers of companies to meet the increased statutory requirement of minimum paid up capital as per Insurance Ordinance 2000. Some companies who were unable to raise this capital have been asked to close down their operations. The Security and Exchange Commission of Pakistan (SECP), Insurance Division, is trying to improve the image of Pakistan Insurance Industry by issuing directives on financial security and transparency, code of good governance and sound market practice. The year 2015 showed improvement in Pakistan’s overall economic indicators including containment of current account deficit, owing to continuing decline in international oil prices along with an uplift in remittances from abroad. The successful issue of Sukuk Bond in the international market also helped the foreign exchange reserves to swell to unprecedented levels. China and Pakistan have made agreements to establish China Pakistan Economic Corridor (CPEC) between the two countries. The corridor is expected to boost economy, trade and connectivity of Pakistan with the regional countries. As part of CPEC, Pakistan has also signed a series of energy projects with China, which will enable to overcome the energy crisis in foreseeable future. The economy grew by 4.24% in fiscal year 2015 which is highest achievement since 2008-2009. Inflation during the year has remained significantly low, achieving the lowest levels since 2003. The services sector registered a growth of 5 percent against the target of 5.2% but remained higher compared to the last year growth of 4.4%.