DAILY EXPRESSTHE EXPRESS TRIBUNEURDU E-PAPER TUESDAY, 18 FEB 2014 SUBSCRIBE The Express Tribune Industry to create awareness on benefits of insurance cover By Our CorrespondentPublished: April 17, 2013 KARACHI: A day after an earthquake measuring 7.8 on the Richter scale hit parts of Iran and Pakistan, the Karachi Insurance Institute organised a meeting at the local press club to mark Insurance Day, which will be celebrated on April 18 (today) every year henceforth. “Allah saved us yesterday,” proclaimed Ayaz Hussain M Gad, executive director of the Pakistan Reinsurance Company, a public-listed reinsurance firm that works under the federal Ministry of Commerce, while addressing the gathering on Wednesday. Noting that there could not have been a more appropriate time to hold a public awareness session on insurance matters, Gad said the board of the Insurance Association of Pakistan (IAP) – which is the representative body of the country’s insurance sector – decided in one of its recent meetings that April 18 be celebrated as Insurance Day every year. EFU General Insurance Chief Executive and Managing Director Hasanali Abdullah said there has been “no tangible growth” in Pakistan’s non-life insurance sector. He attributed the dismal performance of non-life insurance companies in Pakistan to a lack of awareness and sluggish economic growth. Compared to nine life insurers, 39 non-life insurance companies operate in Pakistan, which include three general Takaful operators and one state-owned company. In the calendar year 2011, the non-life insurance sector grew 16%, with total premiums of over Rs54 billion. About 65% of the market share in gross written premium rests with three players: namely EFU General Insurance, Adamjee Insurance and Jubilee General Insurance. In contrast, growth in the life insurance sector was almost twice that of the non-life insurance sector, with total premiums of Rs70 billion. According to IAP Chairman Tahir Ahmed, who also serves as managing director and CEO of Jubilee General Insurance, insurance companies paid next to nothing in claims after an earthquake devastated large swathes of Pakistan in 2005. “There was no insurance penetration in the areas that were hit by the 2005 earthquake. So, while the government had to seek money from all available international and domestic sources, we received few insurance claims,” Ahmed said. “But after the riots following the assassination of Benazir Bhutto in December 2007, insurance companies paid approximately Rs8 billion in claims in Karachi alone,” Ahmed said. He said that the claims pointed to higher insurance penetration in Karachi, compared to the rest of Pakistan. Insurance penetration as a percentage of gross domestic product is only 0.7% in Pakistan. In contrast, it is 1.2% in Bangladesh, 2.5% in Malaysia and about 4.5% in India, according to Ahmed.
Posted on: Tue, 18 Feb 2014 09:48:26 +0000