By Qumber Rizvi
Pakistan’s insurance sector, like many others across the globe, has continued to serve as a fundamental factor driving economic stability. Facilitating individuals and businesses in their quest to find a sustainable footing, especially after the last couple of years, this segment has substantially contributed to various aspects of life. Over the past year, total premiums of the industry increased by 17%, showcasing significant growth.
However, the true contributions of the industry are depicted in the claims that were processed over the past year. Life insurance companies alone paid out more than PKR 186 billion in claims to individuals, corporations, and a host of other customers. The 8 privately owned life insurance companies that form Pakistan’s insurance landscape have been facilitating a diverse range of claims including but not limited to death, disability, and health claims as well as surrenders and maturities.
The collective claims disbursement saw an increase of 40.6% over the previous year when the total claims facilitated by the industry were PKR 132 billion with key players including Adamjee Life, Askari, Dawood Family Takaful, EFU Life, IGI Life, Jubilee Life, Pak Qatar Family Takaful and TPL Life completing the private sector.
Results from the year 2021 illustrate that Jubilee Life paid 41 billion and was followed by EFU Life in the private sector with PKR 23 billion in claims. Adamjee Life processed PKR 9.5 billion, Pak Qatar Family Takaful facilitated PKR 6 billion, IGI Life PKR 5 billion, and Askari Life, Dawood Family Takaful, and TPL Life together furnished PKR 2 billion in claims across the country.
Over the past decade, insurance claims in Pakistan have grown significantly. From a modest PKR 32 billion in 2012, the industry has expanded thanks to increased awareness about insurance products and easier access to a variety of products and services. Organizations and individuals alike have benefitted from the extensive claims being paid out by insurers which is ultimately contributing to a stable as well as sustainable economic cycle.
These amounts served as critical offerings, especially during a time when most families and business entities continued to drive efforts of recovery from the impacts of a global pandemic. Monetary claims from insurance agencies not only provided immense support for businesses but people as well who were battling medical costs, or even daily expenditures in the presence of dwindling incomes.
For many people, insurance companies are simply entities that provide protection against unanticipated financial troubles that businesses or individuals may face at any point during their life. However, their contributions are more diverse especially when it comes to benefitting the overall industry and local economies as well.
From playing a role as risk mitigators that promote knowledge that ensures the safety of life and property to serving as capital protectors, insurance companies like Jubilee Life adorn numerous hats. They are partners in social policies while at the same time, claims that these organizations furnish enable supply chains to be sustained and capitals to be infused into organizations. Together, these elements pave the way for the development of prosperous economies.
Insurance companies also have a part in building robust communities as insurers are amongst the biggest investors in the world, holding more than $8 trillion in assets worldwide. Pakistan’s life insurance sector held approximately $8.6 billion or PKR 1.8 trillion in assets at the end of CY21 according to the State Bank of Pakistan’s Insurance and Takaful Companies Report for the year.
These firms also serve as infrastructure enables, innovation catalysts, and credit facilitators especially today when economies are globally battling a plethora of challenges. Through a variety of products and services, simplified processes, and technological advancements, insurance companies are a crucial piece within the equation of financial stability, particularly in Pakistan.
As economies continue to revitalize and stabilize themselves, the insurance sector is fuelling the journey by paving a path towards sustainability. With diverse prospects on the horizon, Pakistan’s insurance landscape is bound to develop in a robust manner aiding customers in a multitude of ways.
The writer is a technology researcher who closely follows developments in the fintech, banking, and insurance space.
