FDI IN INSURANCE SECTOR

SHAMIM AHMED RIZVI, Bureau Chief, Islamabad
Dec 11 - 17, 2006

Despite a general upsurge in direct foreign investment (above 3.52 billion US dollars) during the financial year 2005-06, insurance sector in Pakistan has failed to attract foreign investors, rather it cast a negative impact as the disinvestments exceeded the fresh investment during the year, according to sources in the Board of Investment (BOI)

As per data provided the BOI only four insurance companies, namely, Adamji Insurance Company, Beema Pakistan Co. Ltd. AEC Insurance and Union Des Insurance attracted FDI from USA, Austria, Luxemburg, Hong Kong and Qatar of about 19 million dollars. Adamji alone suffered a disinvestment of about $ 22 million by investors from Ireland, Qatar and Singapore. As a result foreign investment in the country's insurance sector declined by over $ 3 million during the year. There has been no visible improvement during the 5 months (July-Nov 2006) of the current financial year.

Adamji Insurance Company attracted fresh investment from Austria ($9,11,450), Luxemburg ($20,41,956), Hong Kong ($3,50,000), UK ($25,91,469) and Singapore ($90,62,335). Beema Pak Insurance attracted a fresh FDI during 2005-06 of $ 4,99,946 from USA, ACE Insurance a sum of $ 57,37,700 from USA and Insurance Des $ 6178 again from USA.

Following is the industry-wise details of FDI made in the financial sector in Pakistan (which includes insurance sector) during the financial year 2005-06.

Company wise detail of FDI in 2001 - 02
(Companies Attracting More Than 0.09 Million US$)

S.#

Sector

Company Name

Country

US $ Total

58

Financial Business

International Finance Inv & Commerce Bank Ltd

Bangladesh

1,670,000

59

Financial Business

Albarka Islamic Bank

Bahrain

3,150,000

60

Financial Business

Oman International Bank SAOG

Oman

2,700,000

61

Financial Business

Doha Bank Ltd

Qatar

1,000,000

62

Financial Business

Bank Al-Falah Ltd

U.A.E

1,729,798

63

Financial Business

Khadim Ali Shah Bukhari & Co

Switzerland

416,625

64

Financial Business

Bank of America N.A

U.K

137,342

65

Financial Business

ACE Insurance Ltd

U.S.A

289,442

66

Financial Business

Islamic Investment Bank

U.S.A

1,598,900