Pakistan is unusual in that the total premiums continued to grow at double-digit rates over the last two years despite the global financial crisis and the absence of a clear improvement in the overall political and security situation in the country. In the non-life segment, premiums had been growing by 15-20% per year over 2005-2007. Growth slowed to 6% in 2008 and just 2% in 2009. On the basis of the figures that are available to us at the time of writing, we estimated non-life premiums tracked sideways in 2010. By the standards of developing countries, this is an outcome that is more than respectable. Even if one assumes, as BMI does, that nonlife penetration will rise only slightly over the coming years, it is easy to see how Pakistan could be one of the world's fastest growing insurance markets over the next five years. The situation of the life segment is even more encouraging. The life segment is underdeveloped in terms of our main metric, density (ie: premiums per capita), but has sustained steady double digit growth over the last five years and is expected to continue doing so. Importantly, the life segment accounts for well over half of the entire insurance sector. In this respect, Pakistan differs markedly from countries such as Kazakhstan or Ukraine, where persistent financial and social instability have discouraged people from long-term saving through insurance. The implication is that there is a small minority of the population who are risk tolerant and understand the benefits of life insurance. As is the case in a number of countries whose insurance sectors are surveyed by BMI, the life segment is dominated by a state-owned former monopoly, State Life Insurance Company (SLIC). The gradual loss of market share by SLIC to ALICO and the other life insurers, most of which are offshoots of local non-life companies, suggests to us that competition is causing the creation of attractive products. This process could well account for the very impressive growth trend. The Pakistani non-life segment also suffered as a result of the extreme flooding in the country in 2010, which affected margins. Munich Re reported that H110 was the warmest period since meteorological records began in 1880. The devastating floods in Pakistan and other severe weather events are being attributed to the effects of climate change by some commentators. Munich Re also said that based on its data and records, the number of extreme weather events has tripled since 1980 and that the trend is expected to continue.

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Pakistan Insurance Report 2011
Published on November 2010
Report Summary
Pakistan is unusual in that the total premiums continued to grow at double-digit rates over the last two years despite the global
financial crisis and the absence of a clear improvement in the overall political and security situation in the country.
In the non-life segment, premiums had been growing by 15-20% per year over 2005-2007. Growth slowed to 6% in 2008 and just 2%
in 2009. On the basis of the figures that are available to us at the time of writing, we estimated non-life premiums tracked sideways in
2010. By the standards of developing countries, this is an outcome that is more than respectable. Even if one assumes, as BMI does,
that nonlife penetration will rise only slightly over the coming years, it is easy to see how Pakistan could be one of the world's fastest
growing insurance markets over the next five years.
The situation of the life segment is even more encouraging. The life segment is underdeveloped in terms of our main metric, density
(ie: premiums per capita), but has sustained steady double digit growth over the last five years and is expected to continue doing so.
Importantly, the life segment accounts for well over half of the entire insurance sector. In this respect, Pakistan differs markedly from
countries such as Kazakhstan or Ukraine, where persistent financial and social instability have discouraged people from long-term
saving through insurance. The implication is that there is a small minority of the population who are risk tolerant and understand the
benefits of life insurance. As is the case in a number of countries whose insurance sectors are surveyed by BMI, the life segment is
dominated by a state-owned former monopoly, State Life Insurance Company (SLIC). The gradual loss of market share by SLIC to
ALICO and the other life insurers, most of which are offshoots of local non-life companies, suggests to us that competition is causing
the creation of attractive products. This process could well account for the very impressive growth trend.
The Pakistani non-life segment also suffered as a result of the extreme flooding in the country in 2010, which affected margins.
Munich Re reported that H110 was the warmest period since meteorological records began in 1880. The devastating floods in
Pakistan and other severe weather events are being attributed to the effects of climate change by some commentators. Munich Re
also said that based on its data and records, the number of extreme weather events has tripled since 1980 and that the trend is
expected to continue.
Table of Content
The Sector At A Glance .... 5
Table: Pakistan's Insurance Sector At A Glance .. 5
Key Insights On Pakistan's Insurance Sector . 6
Table: Development Of Non-Life Segment Premiums, 2005-2009 (PKRmn) ... 7
Key Features Of This Report .. 7
SWOT Analysis 8
Pakistan Insurance Industry SWOT .... 8
Pakistan Political SWOT .. 9
Pakistan Economic SWOT .... 10
Pakistan Business Environment SWOT ... 11
Asia Pacific Market Overview ..... 12
Table: Premium's In Asia Pacific's Non-Life Segment (US$mn) . 12
Table: Premiums In Asia Pacific's Life Segment (US$mn) ... 13
Pakistan Insurance Report 2011 Page 1/4

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MetLife's Acquisition Of ALICO .. 15
Table: ALICO At A Glance ... 16
Table: ALICO's Pre-Tax Profits By Segment And Region Contribution, Year To November 30 2009 (%) .... 17
Table: ALICO ' A Market Leader In Japan .. 17
Table: MetLife's Acquisition Of ALICO . 18
Table: MetLife And ALICO Combined .... 19
Islamic Insurance Overview .. 20
Projections And Forecasts .... 26
Table: Insurance Premiums, 2007-2015 . 26
Projections And Drivers Of Growth.. 26
Table: Growth Drivers, 2007-2015 ... 27
Country Update ... 28
Macroeconomic Outlook . 28
Table: Pakistan ' Economic Activity, 2007-2014 ..... 29
Political Outlook . 29
Long-Term Political Outlook 30
Insurance Business Environment Ratings .. 32
Table: Pakistan's Insurance Business Environment Ratings . 32
Table: Asia Pacific Insurance Business Environment Ratings ..... 33
Regional Context . 34
Table: Non-Life Premiums In A Regional Context, 2009 34
Table: Life Premiums In A Regional Context, 2009 .. 35
Analysis Of Competitive Conditions 36
Table: Ranking Of Non-Life Insurers By Premiums, 2009 .... 38
Table: Ranking Of Life Insurers By Premiums, 2009 39
Company Profiles 40
Adamjee Insurance Company ..... 40
ALICO .... 41
Allianz ..... 43
EFU .. 45
New Jubilee Insurance Company 46
State Life Insurance Corporation of Pakistan ..... 47
Country Snapshot: Pakistan Demographic Data .... 48
Section 1: Population 48
Table: Demographic Indicators, 2005-2030 . 48
Table: Rural/Urban Breakdown, 2005-2030 49
Section 2: Education And Healthcare ..... 49
Table: Education, 2002-2005 ..... 49
Table: Vital Statistics, 2005-2030 ..... 49
Table: Employment Indicators, 2001-2006 ... 50
Section 3: Labour Market And Spending Power . 51
Table: Consumer Expenditure, 2000-2012 (US$) ..... 51
Table: Average Annual Manufacturing Wages, 2000-2012 .. 51
BMI Methodology 52
Insurance Business Environment Ratings ..... 53
Table: Insurance Business Environment Indicators And Rationale ... 53
Table: Weighting Of Indicators .. 54
Pakistan Insurance Report 2011 Page 2/4

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