December 14, 2023 (MLN): The private sector should leverage technology to digitalize distribution channels to tap the huge business potential in the areas of crop insurance, health insurance, and disaster risk insurance, Dr. Ishrat Husain, Chairman IBA-CEIF said in his keynote on the second day of 'International InsureImpact Conference 2023'.

Speaking to the delegates of IIC 2023, he advised regulators to adopt a two-track approach, including lighter regulatory oversight for running businesses and handholding for start-ups and new ventures.

He urged the Securities & Exchange Commission of Pakistan (SECP) to identify the stumping blocks and provide a supportive ecosystem for the development of the NBFC sector and the nurturing of new businesses.

Dr. Ishrat pointed out that the shares of banks and DFIs have increased from 73% in FY 2012 to 81%, whereas the share of the NBFC sector is static at 9.4%.

He urged SECP to take steps to raise the share of the non-banking financial sector, including the insurance sector, to achieve the objective of greater financial inclusion.

The chairman said that the SECP, being a unique regulator with dynamic jurisdiction, has a huge potential to mobilize households' savings as well as corporate savings by developing and energizing the NBFCs.

To note, Dr. Ishrat Husain is the Chairman of IBA-CEIF, an author, economist, former governor of SBP, and former advisor to the Prime Minister for Institutional Reforms and Austerity.

The President of Pakistan, Mr. Arif Alvi, also joined the IIC 2023 online.

He highlighted the importance of insurance in times of crisis. He asked SECP to focus on low insurance penetration and come up with schemes and products to cover the need for disaster risk financing in times of calamity. 

He also reviewed the risk calculations used by insurance firms and emphasized the importance of cost transparency.

Dr. Arif Alvi emphasized that the high cost of purchasing insurance coverage, as well as deceptive marketing methods, are key difficulties.

He stated that the insurance business must endeavor to improve its public image.

The president additionally stressed the importance of disaster insurance during natural calamities.

The government does its utmost to assist those affected by natural disasters, but the expense is borne by taxation.

The situation would have been considerably better if people had purchased insurance plans, he said.

President Arif Alvi praised SECP for taking the initiative and developing a five-year strategy with precise goals.

He stated that the five-year plan is a step in the right way, that the need and possibilities are great, and that it is critical to give social security coverage to Pakistanis through insurance penetration. 

He emphasized to create awareness among the masses regarding the importance but also advised the industry to adopt a swift complaint redressal mechanism and resolve the issue of misleading marketing practices by insurance agents.

The first session of the second day of the conference was a detailed dialogue about the potential of takaful sector in Pakistan, where a diverse panel discussed the current state of takaful in Pakistan in light of international case studies and the potential gaps to work on to increase its acceptability among the masses.

Moreover, the next session was kicked off with a presentation of concept paper on insurance pool dynamics by SECP namely “Demystifying the Complexities and Developing Collaborative Protection Structures”.

The panelists, in light of their experiences discussed the way forward for re-insurance optimization to ensure retention of large risks within the country through leveraging of pool structure.

Copyright Mettis Link News

Posted on: 2023-12-14T11:11:02+05:00