Govt targets 3% insurance penetration in 5 years

July 21, 2026 (MLN): The government has called for expanding Pakistan's insurance sector, setting a target to increase insurance penetration from below one percent to 2–3% of GDP over the next five years to strengthen economic resilience, climate preparedness and sustainable growth.

Speaking at the 1st IAP & PSOA International Insurance Conference 2026 in Karachi, Adviser to the Federal Minister for Finance and Revenue Adnan Pasha said Pakistan's improving macroeconomic stability provides an opportunity to pursue structural reforms focused on resilience and risk management.

The conference was jointly organized by the Insurance Association of Pakistan (IAP) and the Pakistan Society of Actuaries (PSOA).

Sindh Chief Minister Syed Murad Ali Shah attended the inaugural session, while around 800 delegates, including policymakers, insurance industry representatives, foreign reinsurers, actuaries, development partners and financial sector experts, participated in the event.

Pasha said sustainable long-term growth would depend on developing stronger mechanisms to protect businesses, households and the economy from climate-related and other emerging risks.

Referring to Pakistan's growing vulnerability to climate events, he urged the insurance industry to work with the government to expand insurance coverage to 2–3% of GDP within five years through innovation, improved access and a supportive policy environment.

He identified agriculture as a priority sector and encouraged insurers to introduce parametric area-yield insurance products that could be integrated with the government's digital agricultural financing platform, Zarkhez-e.

According to him, technology-driven insurance solutions can improve farmers' resilience, expand access to finance and provide timely protection against climate-related losses.

The adviser also proposed the development of a sovereign parametric climate insurance framework to strengthen Pakistan's disaster risk financing system.

He called on insurers, reinsurers and development partners to collaborate on innovative products capable of providing rapid financial assistance during floods and other climate-induced disasters.

Pasha invited the insurance industry to work with the government in identifying legislative and regulatory reforms needed to encourage innovation and accelerate the sector's growth.

He reaffirmed the government's commitment to creating an enabling environment and urged industry stakeholders to invest in human capital, expand insurance coverage and promote product innovation by integrating existing data layers, similar to how banks aligned with NADRA, SUPARCO and LIMS.

Stressing the need for implementation, he urged conference participants to conclude the event with time-bound action plans and dedicated working groups to advance the recommendations discussed.

He expressed hope that measurable progress and practical reforms would be evident at next year's conference.

Pasha reiterated the government's commitment to working closely with the insurance industry, saying a stronger insurance ecosystem would play a key role in improving climate resilience, expanding financial inclusion and access to finance, supporting investment and promoting sustainable economic development.

He urged all stakeholders to work together to unlock the sector's potential and build a more resilient future for Pakistan.

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