SECP chief highlights importance of digital transformation

Islamabad: SECP Chairman Dr Kabir Ahmed Sidhu emphasized the critical role of digital transformation in expanding insurance coverage, enhancing claim settlements and making affordable insurance products available to the public. Speaking at an SECP Talk Series session on the development and digitalization of Pakistan's insurance market, Dr Sidhu noted that despite the sector's substantial assets and premiums, insurance penetration remains low at just 0.7% of GDP.

He pointed out that only 0.85% of insurance premiums are currently generated through digital channels, highlighting the significant challenges and opportunities in the industry. The session convened senior SECP officials and insurance industry leaders, including TPL Insurance CEO Muhammad Aminuddin, State Life Insurance Corporation's Shoaib Javed Hussain, and EFU Life Assurance's Muhammad Ali Ahmed.

Dr Sidhu announced the establishment of an "Insured Pakistan" digital platform to improve public access to insurance products and information. He also highlighted the introduction of important regulatory reforms to ensure timely, transparent, and fair claim settlements. Artificial intelligence and other emerging technologies were identified as transformative forces reshaping global businesses, urging Pakistan's insurance industry to adopt them for competitiveness.

Dr Sidhu pointed out that only 2.85% of vehicles in Pakistan are insured, with an estimated 97% uninsured, and SECP efforts were underway with the Punjab government to strengthen enforcement and digital verification, potentially increasing coverage by up to 2,000%. TPL Insurance CEO Muhammad Aminuddin advocated for coordinated regulatory and provincial action to insure all vehicles by 2030 through integrating insurance records with vehicle registration systems.

Shoaib Javed Hussain, CEO of State Life Insurance Corporation, provided an industry overview, stating Pakistan has 42 insurers with Rs450 billion paid in claims. Life and family takaful insurers manage Rs462 billion in premiums, Rs373 billion in claims, and Rs3.30 trillion in assets. Non-life and general takaful segments have Rs245 billion in premiums, Rs70 billion in claims, and Rs720 billion in assets.

Hussain suggested the insurance industry could mobilize between Rs200 billion and Rs500 billion for infrastructure development, showcasing its potential as a long-term economic capital source. Muhammad Ali Ahmed emphasized the growing need for retirement protection, noting pension fund assets reached Rs156 billion by August 2026, a 333% increase since January 2021.

However, only 143,000 active voluntary pension accounts existed as of December 2025, despite a work force of 134.4 million. He stressed the importance of developing retirement plans, voluntary pension schemes, annuities, and insurance-based long-term savings products, and the role of long-term securities in strengthening Pakistan’s pension market.

The participants concurred that digitalization, artificial intelligence, stronger enforcement, efficient claim settlements, and innovative retirement products could significantly boost insurance coverage and enhance the industry's contribution to economic resilience.