CCP Calls for Greater Competition in Insurance Sector

The Competition Commission of Pakistan (CCP) has called for increased competition, advancements in digitalization, and quicker claims processing to boost Pakistan's insurance industry, which currently stands at only 0.7% of the country's gross domestic product. This call was made during a meeting of the Competition Consultative Group aimed at enhancing competition within the Pakistani insurance sector.

The CCP reported that the country's insurance density is approximately $12 per capita, indicating a substantial potential for market growth. CCP Chairman Farid Ahmad Tarar emphasized that insurance plays a crucial role in risk management, long-term savings mobilization, and economic activity support. He argued that greater competition could foster innovation, elevate service quality, and broaden consumer options.

According to a CCP presentation, Pakistan currently hosts 44 insurers, comprising 36 conventional insurers, seven Takaful operators, and one reinsurer, with roughly 10.4 million policies issued. The commission pinpointed market dominance, entry barriers, concentration in bancassurance, limited awareness, information gaps, dispute-ridden and delayed claims, restricted innovation, and inadequate digitalization as significant hurdles.

Waseem Khan, Director and Head of the Life Policy and Approval Department at the Insurance Division, stressed the importance of digitalization, enforcing mandatory insurance coverage, expanding agricultural insurance, and implementing a risk-based solvency framework. During the meeting, the Insurance Bill, 2026, was also discussed.

Industry participants identified agriculture, small and medium-sized enterprises, retail, microfinance, health, Takaful, microinsurance, and rural markets as promising areas for expansion. They also advocated for improved products, a stronger reinsurance capacity, enhanced data infrastructure, and increased digital tool utilization.

Participants stressed the need for more convenient premium payments, faster claims settlement, responsible selling practices, transparent disclosures, and robust complaint handling mechanisms. They argued that reliable data could improve risk assessment, pricing, fraud detection, and claims management, while digitalization could enhance the customer experience from policy purchase to claims settlement.

CCP Chairman Farid Ahmad Tarar affirmed that the discussions would aid in identifying areas where competition advocacy, regulatory coordination, and policy interventions could fortify the insurance sector. He expressed the goal of promoting a competitive, contestable, and efficient market, aiming to improve consumer outcomes.