KARACHI: President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and former provincial minister, Mian Zahid Hussain on Monday said the importance of insurance in national development cannot be overemphasized amid current depressing economic scenario.
The importance of insurance has increased manifold, therefore, the insurance sector needs to brace for the new challenges, he said.
Mian Zahid Hussain said that all the important sectors of the economy including industry and agriculture are going down, defaults and foreclosures have become order of the day while 1.5 million people have lost jobs renewing important of life, livestock, crop and all forms of general insurance.
Speaking at a seminar regarding the insurance industry, the veteran business leader said that masses, businessmen and farmers are facing heavy losses and insurance is the best tool to mitigate their losses.
The former minister noted that despite the risks the insurance penetration is very low, the insurance premium is just 0.7 percent of the GDP in Pakistan while it is 30 percent of the GDP in the US.
The insurance premium is 3.5 percent of the GDP in India, 0.9 percent in Bangladesh and 1.2 percent in Sri Lanka meaning thereby that we are well below the regional average.
He said that a major chunk of funds earned by the local industry finds its way in the coffers of major insurance companies located in Singapore, Malaysia, Germany and other countries which is disturbing.
Despite the potential of Rs800 billion, this sector is almost stagnant at Rs80 billion due to lack of initiative on the part of some companies, lax attitude of the regulator and lacklustre support by the government.