How to develop insurance culture?

Equity market of Pakistan How to develop insurance culture

Insurance has not been given the importance it deserves

By Atique Ahmed Chishti
July 02 - 08 , 2001

Role of the insurance industry in social and economic development cannot be denied. Exploring new ways, making innovations and doing business involve risks to man's life, goods and property. Insurance provides financial protection. In case of loss, a person recovers his financial position as before the incidence. Thus a man takes big risks to make innovations keeping in view the insurance support. In Pakistan insurance has made an immense contribution to the development of the economy, progress and prosperity of the country.

Unfortunately, insurance has not been given the importance it deserves. This is one of the neglected sectors in Pakistan. The government's attention has repeatedly been drawn towards problems being faced by the insurance industry. But all efforts have gone in vain. It is evident from the treatment of the government with the insurance sector. It is worth noting that in spite of this fact, insurance companies have constantly been making a substantial contribution towards the government's revenues.

The situation demands revolutionary steps to bring about a positive change in the insurance industry. Pakistan being a developing country can definitely be benefited with the development of insurance culture. The following are suggestions for the development of the insurance culture in Pakistan.

• To launch a collective movement to pressurize the government for the inclusion of insurance as a subject in the college syllabus.
• To design our own syllabus and establish an examination system to rid of dependence on foreign institutes. ;
• To force the government to spend sufficient funds on the insurance industry especially on education in return for various charges, taxes and fees they take from insurance companies.
• To restore all inactive insurance institutes as well as set up new ones in line with the modern age aiming at producing highly skilled professional man-power to meet the demands of the country.
• To open job avenues for new trained professionals.
• To create an atmosphere conducive to attract fresh and talented MBAs.
• To bring out an insurance journal on a monthly basis by improving its standards so as to keep the insurers abreast of the changes taking place in the insurance sector all over the world.
• To set up a media cell with the task to create an awareness among the general public about the importance of insurance through the media, both printed and electronic.
• To launch a web site on the Internet showing complete information about the insurance industry playing a significant role in the country.
• To introduce new insurance products especially in the area of health by joining together some insurance companies to give service at large to general public.
• To set up a monitoring cell provided with adequate powers to control malpractices in the insurance sector and stop insurers deviating from the right path.
• To hold regular seminars/conferences and training workshops in order to provide the insurers with opportunities to develop professional skills and upgrade their knowledge.
• To form an advisory council consisting of top executives as well as retired professionals to give feedback to all insurers to do business on the right lines.
• To strengthen the insurance industry to stand on its own feet enabling it to solve more and more problems without seeking help from the government.
• To explore new markets for the expansion of the insurance industry.
• To develop coordination among the insurance related sectors to share responsibility of preventing the increasing fraud in respect of Insurance claim so that profitability can be enhanced.
• To focus on placing the insurance industry high in a competitive market by providing the basic guidance to insurance companies to acquire ISO 9000 standards essential for facing the challenges of globalization in the new international environment.
• To create an independent credit rating agency for insurance companies to be classified and rated according to their financial position and service performance.

Only suggestions or forming rules do not serve the purpose. A lot of suggestions on the promotion of the insurance sector have already been made by the professional experts. The basic thing is to make sure their implementation and continuity.