The total assets of the insurance industry witnessed 14 percent growth, reaching Rs. 2,634 billion in comparison to the previous year’s figure of Rs. 2,305 billion, according to the annual report issued by the Security and Exchange Commission Pakistan.
Concurrently, the industry achieved remarkable revenue growth of a 27 percent increase, with the direct gross underwritten premium amounting to Rs. 579 billion, compared to Rs. 455 billion in 2021, up by Rs. 122 billion which reflected the number of customers availing insurance or Takaful is growing unabatedly.
According to the sector-wise breakdown, the life insurance industry’s assets amount to Rs. 2,177 billion, while the non-life insurance sector holds assets worth Rs. 457 billion. In revenue terms, the life insurance sector underwrote premiums of Rs. 374 billion, whereas the non-life insurance sector recorded premiums of Rs. 205 billion for the year 2022.
This figure includes the premium from the sole reinsurance company in Pakistan, owned by the Government of Pakistan, amounting to Rs. 25 billion during the same period.
The insurance sector plays an important role in the financial industry by providing various types of insurance products and services to individuals, businesses, and other entities. Its primary function is to manage risk and provide financial protection against potential losses or unforeseen events like accidents, natural disasters, theft, health issues, etc.
Insurance helps spread the risk across a larger pool of policyholders, reducing the financial burden on any single entity when a loss occurs. The insurance sector also contributes to capital market liquidity through investments in its capital reserves.
On the intermediary side, the insurance sector includes 22 insurance brokers, 2 reinsurance brokers, 4 third-party administrators, 249 surveying companies, and 393 authorized surveying officers, all duly registered with SECP.
New Entrant in the Insurance Sector On the intermediary front, SECP issued a total of 29 fresh licenses to new market entrants i.e. 2 insurance brokers, 1 reinsurance broker, 25 insurance surveying companies, and one third-party administrator for health insurance. In 2022, a total of 100 new life insurance products were successfully registered, including twenty-eight (28) unit-linked products, eight (08) health insurance, and sixty-four (64) other products.
Notably, these offerings included various small ticket products focused on protection components, providing coverage to the masses through innovative distributive channels including mobile applications of financial institutions and mobile network operators.
To minimize the potential of mis-selling insurance policies through corporate insurance agents, the life insurers have commenced recording audio/video clips for the sale of regular premium life insurance policies, according to the SECP’s report.
