By Syed M. Aslam
Nov 04 - 10, 2002

Nasim-ul-Haq's association with the insurance business spans over four decades. He joined New Jubilee Insurance as a junior clerk soon after he passed his SSC examination back in 1960. This, however, was not Nasim's first job as family circumstances forced him to work in a textile industry even before he completed his secondary school education. He completed his Bachelors in Commerce from the Karachi University while working full time. He also managed to did LLB about a decade ago while still working for the company. Having served in various capacities, including administration and personnel, he rose up to the position of Vice President with the Company. He has been engaged with numerous social and welfare activities and has played an important role to help build Qubra mosque in Block 13-C Gulshan-e-Iqbal a Rs 10 million project over half of which has already been spent. He is the General Secretary of the Trust which oversees the project. He is also the President of Gulshan Branch of the Faran Club, a NGO engaged in social, welfare and education activities nationwide, and served as its Treasurer for many years. Faran Club runs IT centre in Karachi and also dialysis centres in Sukkur and Karachi. The NGO also runs a number of industrial homes to help girls from underprivileged section of the society supplement income for their family.

PAGE: The new Insurance Policy allows an insurance company to fix its own Motor tariff. Is it good for the industry and the insurance buyers?

NASIM-UL-HAQ: Certainly lower tariffs can help bring increased business to insurance companies. In a society such as ours where insurance still much remains an involuntary expense good only to meet certain legality, lower tariffs mean cutting many corners by the insurance companies thus having a direct impact on claim settlements. I feel that evaluation of risks is a more important issue than the tariff. Uneconomically low tariffs, no matter how attractive they look, seriously limits the financial performance of the company to pay the claims. It may be remembered that insurance is not gambling and that uneconomical low tariffs undermine the quality which becomes evident only when one files a claim.

PAGE: The leasing companies are playing a vital role to push car sales in the country. Has this translated in increased insurance business for the industry?

NASIM-UL-HAQ: Yes it has resulted in increased insurance business. However, this increase has been more or less neutralised by the rampant snatching and thefts of automobiles in all the urban centres of the country, particularly Karachi. The vast majority of expensive diesel cars are particularly targeted and this has pushed the loss-ratio to a level where companies see diesel cars, particularly the latest models, more like a liability than an asset. While diesel cars are hot with the snatchers and thieves all other new cars are only a little less hot with them. This has pushed the loss-ratio beyond the point where many insurance companies are incurring loss in this particular class of business. As Motor business is the top revenue generator for the insurance industry compared to Marine and Fire businesses the lawlessness is taking a heavy toll on the industry. We may say that any benefit of increased Motor business by the leasing companies is being neutralised by increased auto thefts and snatchings, the particular target of which are the high-priced new diesel vehicles.

PAGE: Why Third Party Motor insurance fail to offer any relief to the victims of road accidents in the country?

NASIM-UL-HAQ: Third Party Motor insurance all across the world is aimed at providing financial relief to victims of road accidents. While it still remains legally binding it fails to offer any relief to victims of accidents as unscrupulous elements are openly selling useless Third Party insurance under the very eyes of the law at unbelievably low prices. The insurance industry is losing millions of rupees worth of Third Party cover to fake insurance companies who sell the insurance only to fulfil a legality without offering any protection to the victims of accidents whatsoever. In addition, the government is also losing a substantial amount of revenue as all Third Party covers issued by genuine companies include 3 per cent Excise Duty and 1 per cent Federal Insurance Fee. The genuine Third Party cover is relatively more expensive than the fake counterparts but offers real protection. However, with the unscrupulous elements enjoying the biggest slice of the business under the protection of those who should be checking their nefarious activities in the first place the Third Party insurance would offer no protection to the victims of accidents.

PAGE: Can anything be done?

NASIM-UL-HAQ: I strongly feel that creating a public awareness about the importance of Third Party insurance is a must to help people encourage buy cover that offers real protection to victims of accidents. The menace of fake Third Party covers which offer no protection whatsoever only to fulfil a legality should be eradicated. This is not hard as the unscrupulous elements are carrying out their nefarious activities openly in front of the Vehicle Registration Offices all across the country. This would not only benefit the insurance industry but also help the government earn substantial revenue denied to it at present. In addition, the genuine Third Party insurance would also help cut government's expense on medicare.