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Pakistan, a potentially large market for insurers

Pakistan, a potentially large market for insurers but more education on the sector and products is required

Interview with Dr Syed Arif Hussain – CEO, Excel Insurance Company Limited

PROFILE:

Dr Syed Arif Hussain is a motivated person bringing to Excel Insurance Company Limited his expertise in management, resource development, marketing and execution of business strategies. His professional experience is spread over 20 years at progressive senior level positions and has the experience of underwriting, reinsurance, claims management and marketing with the State Life Insurance Corporation of Pakistan. He has been proactively involved in the operations of a Family Takaful Company, Dawood Family Takaful Limited since its inception and as a Chief Executive Officer; he also headed Takaful Pakistan Limited a Non-Life Takaful Company. His expertise includes Life, Health and project related Insurances/Takaful schemes. He has extensive experience in restructuring, insurance operations and automation. He holds M.B.B.S. and Master’s Degree in Business Administration. He has also attended a number of Insurance/Takaful and management related workshops and conferences conducted locally and internationally. Although, working in non-life General Takaful Company will be his first-ever experience in Takaful Pakistan Limited, however, his commitment and passion to perform in a challenging role would surely contribute positively in the progress and prosperity of the Company.

PAGE: YOUR VIEWS ON INSURANCE IN PAKISTAN:

DR SYED ARIF HUSSAIN: In Pakistan, the Life insurance takaful Companies are showing an increasing trend in business which was 27% and generated a premium of Rs155 billion in the year 2015. The non-life insurance takaful companies grew more sedately at 10 percent to generate a premium of Rs68 billion. The total penetration of insurance in GDP was 0.9 percent.

Health insurance is the basic need of middle, lower middle and poor families of the country. So a good product of health insurance will lead to take a major share of the market.

PAGE: KINDLY TELL US ABOUT THE EXISTING AND UPCOMING INSURANCE PRODUCTS:

DR SYED ARIF HUSSAIN: Following are the main products of Life and Non-Life insurance takaful companies:

Life:

Individual Life (With saving and non-Saving)
Group Life
Health
Personal Accident

Non-Life:

Fire and Engineering
Marine
Motor
Health
Miscellaneous including: Bond, Guarantee, Liability, Fidelity, Personal Accident
Traveller

There is a lot of room for new tailor-made products for both micro and macro-insurance takaful like Professional indemnity for Doctors, Lawyers and Engineers, Passengers coverage, Home Coverage, Crops and Live Stock coverage, Health insurance for Family members etc.

 

PAGE: HOW DO YOU SEE THE COMPETITION BETWEEN CONVENTIONAL AND ISLAMIC INSURANCE?

DR SYED ARIF HUSSAIN: The estimated 200 million population of Pakistan represents a huge market for takaful and insurance industry. With a large population shying away from insurance due to religious reasons and equally large population staying away from takaful due to lack of understanding, takaful provides with an alternate mechanism for taking care of some of the basic needs of fellow beings in the time of need. Mostly premium generated by the insurance companies both Life and Non-Life are from conventional banks like banc insurance. Whereas the Islamic banking sector’s market share is very low as compared to conventional banks, that’s why growth of takaful is very low as compared to conventional insurance. As well as Islamic financing increases the takaful business will also be increased, moreover the financial strength of takaful companies is weak as compared to conventional insurance companies, which is also a reason to capture the businesses of large organizations.

PAGE: YOUR VIEWS ON FUTURE OF INSURANCE IN PAKISTAN:

DR SYED ARIF HUSSAIN: The progress of insurance industry is directly related with the progress of economy of the country. Political uncertainty badly effects the growth of economy, which ultimately affects the insurance business. The potential of insurance growth in Pakistan is too much in all areas of insurance classes because the penetration of insurance is negligible as compared to the population of the country. To tap the huge market, injection of creative products is the need of the time. Some of the gaps in the market include Crop coverage and Livestock coverage or Professional indemnity for Engineers and Doctors. Needless to say it’s an uphill task and perhaps greater effort is needed to create awareness among the users. Given that wealth management is another aspect of insurance/takaful, the product plate may be expanded to tweak the existing model. With the current model, perhaps micro takaful /insurance is a far cry, but some program lending may be designed to work it out. Especially without a welfare or social security net, the need is immense with the lower middle class. At the community level, the low income household staff is provided protection in times of medical emergencies and health by their employers. However, the poor are in an invisible bonded labor as they are willing to work for barely sustainable salaries in the hope of getting bailed out when going gets tough.

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