Research Analyst
May 11 - 17, 2009

Pakistan's insurance sector is reaping the benefits of insurance regulations, soaring trade activities, improving per capita income, and rising competition within the sector. The insurance sector of the country forms a meager part of the GDP as compared to other nations of the world. The concept of insurance in Pakistan is not acceptable because of many reasons most prominently being the positioning, marketing, and distribution related issues.

The gross premiums and net premiums of the insurance industry have shown an increasing trend, thanks to the better marketing environment. In addition, the percentage of gross premium to GDP showed an increasing trend over the period. This trend is indicative of growth for insurance penetration in the economy. Furthermore, the demand for insurance depends on real disposable income of the policyholder, the individual's preference about the need for financial security, economic environment, interest rates, inflation and insurance premium rates factors, which are all missing in the Pakistan. Currently, there are 54 insurance companies out of which 49 companies offer non-life insurance and 5 offer life insurance services. The non-life insurance segment also includes six companies that provide health insurance coverage as well.


There is a competition within the non-life insurance (NLI) sector in Pakistan as there are around 49 non-life insurance companies. The non-life insurance sector's profitability has jumped by 17% in the first half of current year over the same period last year. The demand for auto, marine, and fire insurances augmented owing to availability of consumer financing at low interest rates, unprecedented rise in trade volumes, and increased uncertainty due to terrorist attacks in many regions, surge in industrial activity, and high growth of construction business. The structure of the NLI sector is still skewed.

( RS MN)
  2007 2006
ACE Insurance Ltd. 19.54 13.99
Adamjee Insurance Co. Ltd. 4,201.25 1,576.50
Agro General Insurance Co. Ltd. 35.53 4.58
Alfalah Insurance Co. Ltd. 24.69 1.50
Alpha Insurance Co. Ltd. 84.02 27.67
Asia Insurance Co. Ltd. 9.49 11.27
Askari General Insurance Co. Ltd. 51.73 57.09
Atlas Insurance Ltd. 409.85 300.72
Capital Insurance Co. Ltd. 23.90 00.94
Central Insurance Co. Ltd. 2,747.98 750.09
Century Insurance Co. Ltd. 167.99 95.80
Cooperative Insurance Society of Pakistan 0.62 0.18
The Crescent Star Insurance Co. Ltd. 24.03 8.58
East West Insurance Co. Ltd. 326.26 60.44
EFU General Insurance Ltd. 14,536.31 761.98
Excel Insurance Co. Ltd. 19.50 15.91
Habib Insurance Co. Ltd. 420.38 600.95
IGI Insurance Ltd. 2,930.27 7,342.37
New Hampshire Insurance Co. Ltd. 45.30 205.53
New Jubilee Co. Ltd. 588.45 839.88
The Pakistan General Insurance Co. Ltd. 24.81 9.52
PICIC Insurance Ltd. (93.89) 28.14
Premier Insurance Ltd. 478.93 715.42
Reliance Insurance Co. Ltd. 70.74 58.32
Saudi Pak Insurance Co. Ltd. (29.82) (16.76)
Security General Insurance Ltd. 6,262.35 186.37
Shaheen Insurance Co. Ltd. 60.21 50.97
Silver Star Insurance Co. Ltd. 70.17 49.61
Trakker Direct Insurance Ltd. 34.08 (23.82)
UBL Insurers Ltd. (129.98) (15.52)
The United Insurance Co. of Pakistan Ltd. 100.34 95.08
Universal Insurance Co.Ltd. 57.34 29.87
American Life Insurance Co.(pak) Ltd. 32.07 40.44
EFU Life Assurance Ltd. 1,207.09 235.97
East West Life Assurance Co. Ltd.
(former: the Metropolitan)
79.63 14.46
New Jubilee Life Insurance Co. Ltd. 125.45 82.65


During the last 4 years, gross premium of general insurance companies in Pakistan grew by approximately 15% annually while the penetration of the sector reached 0.4% (Rs 33 bn) of GDP by the end of 2007. The growth in the gross premium was mainly attributable to the decent economic growth during this era. The gross premium of the general insurance in Pakistan was projected to end at Rs 35 bn mark in 2008. While this would be a growth of 6% over 2007, insurance penetration is projected to be lower at 0.33% at the end of 2008 versus that of 0.4% a year earlier.

The decline in insurance penetration is attributable to the overall economic slowdown, particularly to the bleak auto sector performance.

Undoubtedly, the motor segment has been regarded as the major growth propeller for the insurance sector in last 5 years. This was mainly attributable to abundance of financing facilities and rise in personal income. The growth of the sector however, remained stagnant in 2008 because of subdued car sales and industrial production. Moreover, slowdown in the trade activities amid global economic crisis also affected the marine insurance.


The insurance sector of Pakistan has relatively low penetration that stands currently at 0.5% versus 1.3% in the emerging markets. Curbing of economic derailment along with stable law and order situation will provide impetus to the mainstay fire and marine insurance businesses.