The Securities and Exchange Commission of Pakistan (SECP) has advised non-life insurance companies to grant a one-month free extension in insurance coverage to all motor insurance policyholders, due to the outbreak of COVID-19.
In a letter issued on Wednesday, the commission noted that the ongoing lockdown situation across the country has resulted in a significant decline in traffic density.
With intercity public transport halted and limited commute within the cities, it can be inferred that policyholder claims in relation to motor insurance will have significantly declined.
Taking into account the decline and/or the anticipated low claim ratio in motor business due to lockdown, insurance companies have been encouraged to take steps to facilitate and pass on the benefit of low claim ratio to motor insurance policyholders.
As the fight against the COVID-19 pandemic continues, it becomes imperative that the insurance industry in Pakistan continues to show commitment to serving its policyholders by providing maximum relief and facilitation in all operational aspects of insurance policies.
The Securities and Exchange Commission of Pakistan believes that such good gestures in these difficult times will further increase policyholder’s confidence in the insurance sector.