​”SECP’s Five-Year Plan: Targeting Rs 1.22 Trillion in Insurance Premiums by 2028″

iturn0image0turn0image1turn0image2turn0image4The Securities and Exchange Commission of Pakistan (SECP) has unveiled an ambitious five-year strategic plan aimed at significantly expanding the nation’s insurance sector. The plan targets increasing the total insurance premium from approximately Rs 533 billion to Rs 1.22 trillion by 2028, representing a 129% growth. citeturn0search0

Key Objectives of the SECP’s Five-Year Plan:

• Increase the Number of Insured Individuals: The plan aims to raise the number of insured individuals to 15 million by 2028. citeturn0search3
• Enhance Insurance Penetration: The SECP seeks to improve the insurance penetration rate from the current 0.87% to 1.5%. citeturn0search4
• Expand Coverage in Various Sectors:
  • Motor Insurance: Increase the coverage of Motor Third-Party Liability (MTPL) insurance to more than 20%.
  • Takaful Contribution: Raise the contribution of Takaful to over 30%.
  • Private Health Insurance: Grow private health insurance premiums to represent more than 15% of the total premium.
  • Agriculture Insurance: Facilitate the availability of agriculture insurance for non-loanee farmers.
  • Disaster Insurance Products: Promote the introduction of disaster insurance products.
  • Annuity Products: Facilitate the availability of annuity products for Voluntary Pension Scheme (VPS) investors and individual retirees. citeturn0search4
• Modernize Regulatory Framework:
  • Risk-Based Capital (RBC): Implement RBC standards.
  • International Financial Reporting Standards 17 (IFRS-17): Successfully implement IFRS-17.
  • Amend Insurance Ordinance: Revise the Insurance Ordinance to align with modern practices.
  • Digitalize Regulatory Approvals: Facilitate digitalized regulatory approvals. citeturn0search4

Strategic Priorities:

To achieve these objectives, the SECP has identified several key priorities:

• Ease of Doing Business: Rationalize regulatory returns, approvals, licensing requirements, solvency limits, and management expense limits. citeturn0search4
• Digital Transformation: Promote the use of digital platforms for regulatory processes and insurance services.
• Collaboration with Fintech: Encourage collaboration through effective use of fintech, data sharing, and alternate delivery channels. citeturn0search4

Current Insurance Landscape in Pakistan:

• Insurance Penetration: Pakistan’s insurance penetration rate is below 1%, placing it among the lowest in the region. citeturn0search3
• Existing Coverage: Out of 30 million registered vehicles, only 3% are insured. Less than 8 million people have life insurance, and less than 500,000 of 32 million registered properties are insured. citeturn0search3

Conclusion:

The SECP’s five-year strategic plan represents a comprehensive effort to transform Pakistan’s insurance sector by 2028. Through targeted initiatives aimed at increasing coverage, modernizing regulations, and fostering digital innovation, the SECP seeks to enhance insurance penetration and contribute to the nation’s economic growth.