SECP Report Emphasizes Importance of Inclusive Insurance in Pakistan

The Securities and Exchange Commission of Pakistan (SECP) has released a comprehensive report shedding light on the potential of micro and inclusive insurance in the country. Titled 'Unlocking the Potential of Micro and Inclusive Insurance in Pakistan,' the report was presented at the International Insure Impact Conference, 2023 in Karachi. It delves into the current state of inclusive insurance in Pakistan, comparing it with global practices and identifying areas for improvement.

The report reveals that out of 12.56 million insurance policies sold through microfinance institutions, a significant 89 percent are credit life insurance, primarily aimed at mitigating credit risks. Despite 20 insurers offering inclusive insurance, only 4 are actively engaged in digital distribution of small-ticket products, indicating a need for technological advancement in the sector.

Commissioner Insurance Aamir Khan emphasized the importance of inclusive insurance in driving overall insurance penetration and promoting financial inclusivity. He stressed the necessity for collaborative efforts to address regulatory gaps, enhance awareness, and improve product accessibility through digital channels.

The report suggests that by partnering with Mobile Network Operators, microinsurance providers can leverage existing digital infrastructure to reach a wider audience. It calls for amendments to the Microinsurance Rules 2014 and the strategic use of technology to make inclusive insurance more accessible to the target market.

In conclusion, the SECP's report highlights the critical role of inclusive insurance in fostering financial inclusivity in Pakistan and underscores the need for concerted efforts to unlock its full potential.