At a recent “Roundtable on Microinsurance” held in Karachi, Pakistan, the Securities and Exchange Commission of Pakistan (SECP), in concert with the Financial Sector Reform and Strengthening (FIRST) Initiative, a program of the World Bank that funds technical assistance for financial sectors in low- and middle-income countries, released a diagnostic report on the demand for and supply of microinsurance in the country. It was found that the current market for life microinsurance is estimated at 3.7 million policies. For health microinsurance, the current market demand is FOR 31.5 million policies with a potential of 80 million people insured, including dependents. As of 2011, the insurance industry in Pakistan comprises 0.8 percent of gross domestic product (GDP) which stands at USD 211.1 billion.
Roundtable participants expressed the expectation that the development of the insurance sector would enable microinsurance firms to profit from safeguarding low-income people; ease the economic burdens on the government; and alleviate poverty in the long-term. Participants included government authorities, international donor organizations, insurance companies and microfinance institutions. SECP and its stakeholders are currently in the process of formulating a regulatory framework for the microinsurance sector.
By Jennifer Young, Research Associate
About Securities and Exchange Commission of Pakistan
The Securities and Exchange Commission of Pakistan (SECP) was established in 1997 under the SECP Act to serve as the financial regulatory agency in an effort to foster economic growth. SECP supervises the regulation of the corporate sector, capital markets, insurance companies, non-banking finance companies and private pensions. It also oversees external services providers to the corporate and financial sectors including chartered accountants, credit rating agencies, corporate secretaries, brokers and surveyors. Muhammad Ali has served as the Chairman of the Securities and Exchange Commission of Pakistan (SECP) since 2010, and he continues to serve in that capacity as of 2012.
About FIRST Initiative
Established in 2002, the Financial Sector Reform and Strengthening (FIRST) Initiative is a multi-donor trust fund managed by the World Bank that is aimed at delivering technical assistance to financial sectors in low- and middle- income countries. FIRST Initiative’s objectives are to finance technical assistance; provide support for the implementation and reformation of standards and codes in financial regulation; conduct research on best practices and tools related to financial sector development; and work with international standard-setting bodies in accordance with World Bank-International Monetary Fund Financial Sector Assessment Programs (FSAPs) and Reports on Standards and Codes (ROSCs). As of 2011, FIRST served 100 low- and middle-income countries, through approximately 400 country-based and regional projects valued at USD 73.5 million.
Sources and Additional Resources
Pakistan Today Story: “SECP to Issue Regulation Policy for Microinsurance”
http://www.pakistantoday.com.pk/2012/10/16/news/national/secp-to-issue-regulation-policy-for-microinsurance/
Securities and Exchange Commission of Pakistan Report: “Microinsurance in Pakistan, A Diagnostic Study”
http://www.secp.gov.pk/corporatelaws/pdf/MI_Report_16102012.pdf
MicroCapital Story: “MICROCAPITAL BRIEF: Securities and Exchange Commission of Pakistan (SECP) to Launch Microinsurance Regulatory Framework by June 2012,” December 12, 2011.
https://www.microcapital.org/microcapital-brief-securities-and-exchange-commission-of-pakistan-secp-to-launch-microinsurance-regulatory-framework-by-june-2012/
MicroCapital Story: “MICROCAPITAL BRIEF: Pakistani Microinsurance Providers Unveil Draft Regulation to Help Growth of Industry,” January 19, 2011
https://www.microcapital.org/microcapital-brief-pakistani-microinsurance-providers-unveil-draft-regulation-to-help-growth-of-industry/
MicroCapital Story: “MICROCAPITAL BRIEF: Pakistan Looking to Microinsurance to Increase Insurance Penetration in the Country,” April 22, 2010.
https://www.microcapital.org/microcapital-brief-pakistan-looking-to-microinsurance-to-increase-insurance-penetration-in-the-country/
MicroCapital Universe Profile: Securities and Exchange Commission of Pakistan
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Securities+and+Exchange+Commission+of+Pakistan
MicroCapital Universe Profile: First Initiative
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FIRST+Initiative
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