Feb 8 - 14, 2010

The insurance industry of Pakistan constitutes a meager part of its GDP as compared to other developed as well as developing nations.

With penetration of around 0.6%, the insurance industry is still in its nascent stage because of low demand in the market. The concept of insurance in Pakistan is not acceptable on account of many reasons most prominently being the positioning, marketing, and distribution related issues.

Nevertheless, the demand for insurance depends on real disposable income of the prospective policyholder, the individual's preference about the need for financial security, economic environment, interest rates, inflation and insurance premium rates.

Pakistan's insurance sector is reaping the benefits of a growing economy coupled with the insurance sector reforms, soaring trade activities, improving per capita income, and competition among insurance sector companies, which are driving the current growth in the insurance sector. Further, higher interest rates and tax exemption on capital gains also supported the investment income of the companies, which provided further impetus to the insurance bottom line.

At present, there are 54 insurance companies out of which 49 companies offer non-life insurance and 5 offer life insurance services. The non-life insurance industry also includes six companies that provide health insurance coverage as well.


There is low competition within the non-life insurance (NLI) sector in Pakistan . The promulgation of insurance ordinance 2000 and subsequent regulatory changes strengthened the regulatory and supervisory infrastructure for NLI companies. The enhancement in paid-up capital requirement improved the equity structure and reduced the number of non-profitable companies.

The non-life insurance sector's profitability has slightly increased in the current fiscal. The demand for auto insurance, marine insurance, and fire insurance was 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 areas. However, the structure of the NLI sector is still skewed.

Those associated with insurance industry were of the view that since the time Pakistan came into being, insurance industry never received attention it deserved as an important segment of the financial sector. The first significant policy change that we witnessed was in 2000 when Insurance Ordinance 2000 was promulgated. This insurance ordinance primarily aims to ensure the protection of insurance policyholders' interest and to promote sound development of the insurance industry.

Insurance industry in Pakistan is underdeveloped. However, it has shown a promising growth in premiums over the past few years. They said that insurance industry has huge potential and the government must play the role of facilitator to make the industry grow.

Established in 1953, New Jubilee Insurance (NJI) is one of the most reputable names in the country's insurance sector. Sustained growth over half a century has secured NJI a place among the "Big Three" Pakistani insurance companies in terms of gross direct premium and financial base. NJI that is listed on the Karachi & Lahore Stock Exchanges has an extensive branch network in all major cities and towns of Pakistan that guarantees prompt service at the customer's doorstep, a spokesperson of NJI said.

According to her, at NJI, diversity is maintained through underwriting all classes of general insurance including fire, marine, motor, engineering, health and general accidents. NJI not only offers wide risk coverage, but also provides related risk management services delivered by highly qualified and experienced risk managers. NJI has developed unique and innovative insurance solutions to meet the growing consumer financing trends of economy. From auto financing to personal loans, mortgages to plastic cards, and trade finance to capital investment finance, NJI has the customized solutions to secure entire operations.

As pioneers in Group Health Insurance, NJI continues to develop new, flexible and customized plans to suit the diverse need of many blue chip Pakistani companies and multinational clients, the spokesperson said. With a broad spectrum of services available, NJI's client-base comprises prominent national and multinational corporations operating in pharmaceutical, chemical, textile, cement, services (hospital & hotels), oil & energy, manufacturing, FMCG, engineering, banking and financial sectors.

NJI's business philosophy can be summed up as customer protection, customer satisfaction and customer trust, she said. This is acquired largely by ability to handle claims effectively. The customer focus and proactive management approach in all areas of business, allow NJI to underwrite and handle claims in an expeditious and efficient manner, she added. The true test of soundness of insurance coverage is the duration of client relationships. This is proven by the fact that many clients have been with us for over 40 years. Clients are satisfied knowing that NJI is their best security.

New Jubilee Insurance that is one of the leading players in corporate health insurance for over two decades, is widely recognised for its innovations in the field of consumer insurance. Rising to the challenge, New Jubilee Insurance Company has also introduced the solution to take care of the financial burden one may go through in times of a medical emergency, through its new product, Family Sehat Care.

NETSOL has posted a unconsolidated profit after tax of PKR395.61m (EPS: PKR5.08) for the half year ended December 31, 2009.







(OCT-DEC. 09)

(JUL-SEPT. 09)


PAT (PKR Billion) 395.61 307.35 29% 195.97 199.64 -2%
EPS PKR (Actul) 5.08 4.29 18% 2.52 2.56  
EPS PKR (Dialuted)* 5.08 3.94 29% 2.52 2.56  
(4Qtr- Oct-Dec)
n.p** n.p**        


77.91 HY-FY09-10 HY-FY08-09 CHANGE% 2QFY09
(OCT-DEC. 09)
(JUL-SEPT. 09)
PAT (PKR Billion) 421.95 309.83 36% 205.02 216.94 -5%
EPS PKR 5.25 4.07 29% 2.57 2.68 -4%
*Profit after tax/ outstanding shares
**No payout announced
Last Closing: 33.99