The life and non-life insurance industry in Pakistan witnessed continued growth momentum in 2016, and is forecast to show similar growth this year that is expected to be carried forward into 2018, says Milliman which is among the world's largest providers of actuarial and related products and services.
In 2016, the both life and non- life insurance sectors as a whole grew by more than 13% measured in terms of annual gross written premium (GWP). For the past five years, both life and non-life insurance sectors, measured by GWP, have been growing at an average compound annual growth rate of 13%, increasing insurance penetration and insurance density, albeit from a low base. During 2016, the industry’s total premium revenue generated stood at PKR265 billion (US$2.54 billion), with total assets of PKR1,165 billion.
At present, in the life insurance sector there are nine life insurers, including two family takaful operators and one state-owned insurer. In 2016, the life insurance market GWP grew by 11%, and the total 2016 GWP stood at PKR180 billion.
There are currently 41 non-life insurers operating in the market, including three general takaful operators and one state-owned insurer. In 2016, significant GWP growth of more than 18% was observed in non-life insurance, which can be mainly attributed to the China-Pakistan Economic Corridor (CPEC) and related infrastructure development. The total GWP of the non-life insurance sector in 2016 was PKR85 billion, excluding reinsurance.
The CPEC investment of $46 billion is likely to benefit the non-life sector, and with increasing awareness and improving economic conditions, life sector growth is also expected to continue in the future. The government has taken steps to increase insurance penetration by launching the National Finance Inclusion Scheme (NFIS) with the stated vision that “individuals and firms can access and use a range of quality payments, savings, credit and insurance services which meet their needs with dignity and fairness”. With the appropriate regulatory environment and increasing awareness, there are significant future growth opportunities for insurance business in Pakistan, says Milliman.