The GWP of the Pakistani industry - which consists of 47 players, of which 38 are nonlife and nine are life companies - has increased by 11.2% to PKR259 billion (US$2.47 billion) in 2016 from PKR233 billion in 2015.
“The industry has performed fairly well in terms of growth in gross written premium and asset size with the major contribution coming from life insurance sector where GWP increased from PKR162 billion to PKR174 billion, showing 7% growth on a year-on-year basis,” said Mr Fida Hussain Samoo, SECP’s Insurance Commissioner.
The non-life sector saw a 19% increase in GWP increasing from PKR71 billion in 2015 to PKR85 billion in 2016. The asset size of the overall insurance industry as of 31 December 2016 stood at PKR1,159 billion which included life insurance sector assets of PKR929 billion and non-life sector assets of PKR230 billion.
Concurring with views that the insurance industry performed satisfactorily in 2016 because there were no major catastrophes, Mr Hasanali Abdullah, MD & CEO, EFU General Insurance and also Chairman of the Insurance Association of Pakistan, said that industry growth came and will come from investments in power plants, expansion in cement plants, new infrastructure projects and the increasing number of motor vehicles on the roads.
The China-Pakistan Economic Corridor (CPEC) trade corridor, which includes the building of roads, ports, power plants and dams, has provided a much needed booster dose to the economy which will bring benefits to the insurance industry too. “The China-Pakistan Economic Corridor which is part of China’s One Belt, One Road (OBOR) project, is bringing in US$46 billion in investments, and this has given a boost to the local construction industry and will also benefit the non-life industry which is poised for high growth in the near future,” said Mr Tahir Ahmed, MD & CEO, Jubilee General Insurance Company.
Life sector growing rapidly
The life insurance industry has been growing at 15% y-o-y for the last few years and this trend is expected to continue in 2017.
Mr Javed Ahmed, MD & CEO, Jubilee Life Insurance Company, said: "Increasing awareness of insurance and improving economic conditions are paving the way for a growing life insurance business.” He, however, was concerned about the government’s efforts to impose various taxes on the life and health insurance industry, which he feels were giving rise to uncertainty among insurance companies about their future.
At the same time, with the increase in the use of smart phones and mobile technology, the life insurance sector is just beginning to move towards digital.
The full version of this article appears in the April 2017 edition of the Asia Insurance Review. Get your copy today!