Pakistan Insurance Industry Analysis 2012

  • November 2012
  • -
  • Business Monitor International
  • -
  • 61 pages

Pakistan’s profound security and political problems, together with the widespread poverty of many of its
households, have constrained the development of insurance over the years. In spite of the openness of both the non-life and the life sectors to foreign insurers, few multi-national groups have considered it worth their while to establish operations in Pakistan. As is the case with many very underdeveloped insurance industries, the majority of the (literally) dozens of players are very small by any standard.
Nevertheless, there are clear signs that the insurance segment is resilient. The life sector accounts for
about half of all premiums. The Pakistani households that use life insurance may be very small in number, but they do have enough confidence in the insurers (and the overall economic and financial environment) to engage in long-term contracts. Pakistan is a classic example of a country where the hype and excitement about takaful exceeds the reality. However, it remains the case that genuine takaful operators have established themselves over the last four years or so. Best of all, the life insurers (especially) have shown that they can be inventive in relation to products and distribution channels. There is a clear move towards bancassurance. Time will tell whether or not the life insurance product that Adamjee Life has developed in conjunction with mobile phone industry player ZONG is a success. Nevertheless, the venture could encourage many households to begin using insurance for the first time.
In the non-life sector, the claims arising from the massive floods of 2010 and early 2011 undoubtedly
represent a challenge, particularly for Pakistan Reinsurance (PakRe): for Pakistan’s (usually) tiny and lowly-capitalised non-life firms, retention ratios are low as many risks are laid off with reinsurers. However, it is clear that premiums are growing strongly (as are profits). Moreover, the government is actively encouraging the development of crop insurance and micro-insurance.

Table Of Contents

Executive Summary 5
Data : Pakistan’s Total Premiums, from 2008 to 2016 . 5
Key Insights And Key Risks 5
Industry SWOT Analysis 7
Pakistan Insurance Industry Environment and Risk Analysis .. 7
Pakistan Political Environment and Risk Analysis .. 8
Pakistan Economic Environment and Risk Analysis 9
Pakistan Business Environment SWOT ... 10
Life .. 11
Asia-Pacific Life Segment Overview ... 11
Data : Asia Pacific Life Premiums, from 2008 to 2016 (US$mn) ... 11
Pakistan Life Segment Update 14
Life Market Projection Scenario ... 15
Data : Pakistan’s Life Premiums, from 2008 to 2016 . 15
Growth Drivers And Risk Management Projections 16
Population .. 16
Data : Pakistan’s Insurance Segment Key Drivers - Demographics, from 2008 to 2016 ... 16
Non-Life .. 18
Asia-Pacific Non-Life Segment Overview 18
Data : Asia Pacific’s Non-Life Premiums, from 2008 to 2016 (US$mn) .. 18
Pakistan Non-Life Segment Update . 20
Non- Life Market Projection Scenario .. 21
Data : Pakistan’s Non-Life Premiums, from 2008 to 2016 . 21
Growth Drivers And Risk Management Projections 22

Macroeconomic Data . 22
Data : Pakistan Economic Activity, from 2011 to 2016 .. 24
Political Stability Outlook ... 24
Data : Asia Pacific Regional Security Ratings 26
Healthcare .. 26
Healthcare Insurance . 28
Epidemiology .. 28
Data : Insurance Key Drivers, Disability-Adjusted Life Years, from 2008 to 2016 . 30
Motor .. 32
Islamic Finance .. 33
Insurance Risk/Reward Ratings ... 34
Data : Pakistan’s Insurance Risk/Reward Ratings . 34
Data : Asia Pacific Insurance Risk/Reward Ratings ... 35

Competition Overview 36

Competition Overview Analysis .. 36
Major Players In Pakistan’s Insurance Segment . 39
Data : Ranking of Non-Life Firms, In 20 10 Gross Premiums (PKRmn) . 41
Data : Ranking of Life Firms, In 20 10 Gross Premiums (PKRmn) . 42
Company Profiles .. 43
Adamjee Insurance Firms . 43
Allianz . 44
EFU 46
MetLife ALICO ... 47
New Jubilee Insurance Firms 49
State Life Insurance Corporation of Pakistan . 50
BMI Methodology .. 51
Insurance Risk/Reward Ratings ... 53
Data : Insurance Risk/Reward Indicators And Rationale ... 54
Data : Weighting Of Indicators .. 55

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