President of Pakistan Dr. Arif Alvi said the insurance companies are facing challenges, including high insurance costs and deceptive marketing methods, which need to be addressed to enhance the penetration of the sector within the country.
Speaking online at the International InsureImpact Conference 2023 organized by The Securities and Exchange Commission of Pakistan (SECP), he e asked SECP to focus on low penetration and come up with schemes to cover the need for disaster risk financing in times of calamity.
Alvi stated that the five-year plan is a step in the right direction as it is critical to give social security coverage to Pakistanis through insurance penetration. Dr. Alvi emphasized the need to create awareness among the masses regarding the importance of insurance but also advised the industry to adopt a swift complaint redressal mechanism and resolve the issue of misleading marketing practices by insurance agents.
Dr. Ishrat Hussain while addressing the keynote speaker advised regulators to adopt a two-track approach: Lighter regulatory oversight for running businesses and handholding for start-ups.
He urged SECP to identify obstacles and establish a conducive environment for nurturing new business. Dr. Ishrat said that the SECP being the unique regulator with dynamic jurisdiction, has a huge potential to mobilize households’ savings as well as corporate savings by developing and energizing the NBFC. He urged the private sector to leverage technology to digitalize distribution channels to tap the huge business potential in the areas of crop insurance, health insurance, and disaster risk insurance.
On the conference’s second day, prominent experts and professionals from the insurance and financial sectors discussed crucial issues within the insurance industry to outline a strategic roadmap for the future trajectory of the country’s insurance sector. The first session of the 2nd day of the conference was a detailed dialogue about the potential of the Takaful sector in Pakistan, where a diverse panel discussed the current state of takaful in Pakistan in light of international case studies and the potential gaps to work on to increase its acceptability among the masses.
In the session about the adoption of International Financial Reporting Standards and Risk-Based Capital Regime, the speakers discussed the limitations being faced by the industry players in the implementation of IFRS-17 and the possible approach for its smooth adoption. The speakers also discussed the synergies to be achieved in the adoption of Risk-Based Capital Regime, post-implementation of IFRS-17. During the second half of the day, SECP presented its draft report on the topic of “Unlocking the Potential of Micro and Inclusive Insurance in Pakistan”.
This was followed by a panel discussion about the budding market of small ticket insurance products and how such products can prove to be a game changer for the sector. Among other suggestions, the panelist also recommended taking steps to include microinsurance under the overall umbrella of the compulsory insurance regime.
The last session of the day was a grand session on collaboration, technology, and innovation where industry practitioners from various sectors assessed the possibility of association and collaborations between different sectors for the achievement of the ultimate vision of increased insurance penetration in Pakistan.
During the closing remarks, Andres McCartney from the Asian Development Bank (ADB) briefed about ADB’s program of supporting the initiative of increasing insurance coverage in Pakistan. Summing up the conference, Commissioner of Insurance, Aamir Khan, said that insurance is the social and financial safety net and through better perception building and collective efforts of the insurance sector can be taken forward.
Chairman SECP Akif Saeed in his concluding remarks asked the participants to carry forward the knowledge gained, the connections made, and the inspiration received during the conference to propel the insurance industry to new heights. He also thanked the sponsors for supporting the conference and the attendees for taking time out to participate. The closing ceremony of the conference was graced by the Chief Minister of Sindh, honorable Justice (Retired) Maqbool Baqir.
Justice Baqir congratulated SECP for the successful organization of the International Insureimpact Conference 2023. He acknowledged that the valuable insights shared throughout the conference have the potential to shape the future of the insurance sector of Pakistan. He further highlighted the importance of discussions held on the topic of crop insurance, microinsurance, insurance pool, takaful, collaboration, and technology.
Justice Baqir also appreciated the five-year strategic plan developed by the SECP and hoped for the successful implementation of this plan. Baqir assured that the Government of Sindh will work closely with SECP and industry to improve crop and livestock insurance and form some strategy for disaster risk insurance in Sindh.
