Securities and Exchange Commission of Pakistan pushes digital insurance expansion

Islamabad, Pakistan - The Securities and Exchange Commission of Pakistan (SECP) emphasized the importance of digital transformation in the country's insurance sector during a recent Talk Series session. Chairman Dr Kabir Ahmed Sidhu highlighted that the expansion of insurance coverage, improved claim settlement, and accessibility of affordable insurance products to the public can be achieved through digital transformation.

Addressing the current state of the industry, Dr Sidhu shared that the insurance sector possesses assets worth approximately Rs4 trillion and generates annual premiums worth Rs708 billion. However, the penetration of insurance remains low at just 0.7% of GDP, with only 0.85% of insurance premiums generated through digital channels. Dr Sidhu pointed out that this indicates both the magnitude of the challenge and the vast opportunities available to the industry.

During the session, SECP officials and industry leaders—including TPL Insurance CEO Muhammad Aminuddin, State Life Insurance Corporation of Pakistan CEO Shoaib Javed Hussain, and EFU Life Assurance CEO Muhammad Ali Ahmed—discussed the need for regulatory reforms to ensure timely, transparent, and fair claim settlements. They also acknowledged that emerging technologies like artificial intelligence are reshaping businesses globally, and Pakistan's insurance industry must adapt to remain competitive.

A critical issue Dr Sidhu addressed was the limited implementation of mandatory third-party motor insurance, with an estimated 97% of vehicles in Pakistan operating without insurance coverage. To tackle this issue, the SECP is working with the Punjab government to strengthen enforcement through digital verification and enforcement, which could potentially increase third-party motor insurance coverage by up to 2,000%.

Shoaib Javed Hussain, the CEO of State Life Insurance Corporation, provided an overview of the insurance sector in Pakistan. The country has 42 insurers, with a total of Rs450 billion in claims paid. Life insurance and family takaful account for Rs462 billion in annual premiums, claims, and assets of Rs3.30 trillion. In contrast, the non-life insurance and general takaful segment has premiums of Rs245 billion, claims of Rs70 billion, and assets of Rs720 billion.