State Life Insurance Corporation of Pakistan & Insurance Sector of Pakistan Presented by: Muhammad Ullah Class:MBA (B&F) Source: MohiuddinAazam The Dawn, March 22, 2010 S.M.AbbasZaidi Pakistan & Gulf Economist April 19, 2010. vol: XXIX
Summary Why I select this topic? The most significant measure of an industry or an activity is its contribution towards employment generation, strengthening linkages with other sectors of the economy in promoting growth and stability, and creating a sizeable impact on the national income of a country. In developed countries, the Insurance industry is a necessary part of daily life and serves all the above mentioned purposes.
INTRODUCTION Insurance: The equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. Parties involved Insurer: the company selling the insurance Insured or Policyholder: the person or entity buying the insurance policy
Insurance sector of Pakistan History: 77 foreign insurance companies were dominating the Pakistan market post partition when the strength of local insurers was only seven. In 1952 Government established Pakistan Insurance Corporation to promote the local insurance industry and number of local insurance companies increased to 60 while number of foreign companies reduced to seven.
In 1976 National Insurance Corporation (NIC) was formed, with the purpose of undertaking General Insurance business relating to any public property.
State Life Insurance Corporation of Pakistan The State Life Insurance Corporation of Pakistan (the corporation) was incorporated in Pakistanon November 1, 1972 under the Life Insurance Nationalization Order, 1972. The corporation's head office is located at Karachi, Pakistan. The corporation is engaged in the life insurance business. It is the biggest life insurance corporation in Pakistan.
International Perspective of Pakistan insurance industry Percentage of the GDP: Insurance penetration rate or insurance premium as percentage of the GDP is only 0.8 per cent—the lowest among comparable countries.
Insurance penetration in rural areas to gain the customers.
Insurance scheme for non-borrowing small formers.
Agriculture is a primary threat that is not insured
Banks should provide insurance services
New technology should used for selling insurance. In Pakistan a couple of Insurers are able to provide quotes through their websites.
The future looks very positive for the non-life insurance market in Pakistan. Although there are many challenges ahead, the low penetration in the non-life sector, and strong economic growth are two factors likely to lead to significant premium growth in the years
Conclusion & Recommendations The existence of a healthy insurance sector is an important condition for the well being of the population and for sustainable economic growth. The development of this sector should become a priority of governmental economic and social policy. In order to achieve this goal, we I have two recommendations. First, the supervisory body for insurance activity (the “State Commission”) should be provided by the government and by the insurance companies with significantly higher financial resources in order to be able to fulfill its extremely important job in a proper way. Second, consumer protection should be improved through the creation of a neutral arbitrator.