ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) is evaluating the concept of a centralized insurance information bureau to provide an overarching governance framework in the insurance sector and amend the Insurance Ordinance to improve the regulatory framework.
The survey titled “Mapping the Existing Digital Infrastructure of Insurance,” published by the SECP, provides critical insights into the current state of Pakistan’s insurance sector. It highlights that the majority of companies have yet to take significant steps toward digitalisation.
Drawing comparisons between Pakistan’s insurance industry and other jurisdictions, the survey identifies both areas of progress and those that are neglected. The SECP survey states that the insurance industry in Pakistan is still in the infancy stage of digitalisation, with only a few companies starting their digital journey, primarily focusing on the distribution side.
The SECP roadmap outlines Pakistan’s insurance sector’s digital infrastructure, integrating past and future initiatives with the national strategy. The commission is also evaluating the concept of a centralized insurance information bureau to provide an overarching governance framework for these initiatives and is working on amending the Insurance Ordinance to improve the regulatory framework and support digital infrastructure.
Commissioner Insurance SECP, Aamir Khan, has stated that the current state of digitalisation requires immediate attention from all stakeholders. This includes the development of mobile apps and other innovative distribution channels to develop new products and attract fresh policyholders.
According to the data collected under the survey, the total premium for insurance distributed through digital channels in 2023 was Rs842 million, out of a total premium of Rs553 billion. Of 29 non-life insurers, only 10 companies offer one or more insurance classes through their websites, while in the life insurance sector, 7 out of 11 life insurers offer digital distribution of their products through their websites. However, the number of products offered is very limited, and the overall process breaks down at multiple points, the SECP adds.
While insurance companies globally offer data-driven products, only two companies in Pakistan offer such products, and even then, at a very limited scope.
