Pakistan's 1st Insuretech Summit

Unleashing the Power of Technological Innovation in Pakistan's Insurance Industry

Theme: Insurtech Accelerate

1. Insurance Industry in Pakistan:

The insurance industry in Pakistan has witnessed significant growth and development in recent years. It plays a crucial role in mitigating risks, promoting financial stability, and supporting economic growth. The regulatory authority for insurance in the country is the Securities and Exchange Commission of Pakistan (SECP).

a.     Market Size and Penetration:

The insurance industry in Pakistan has been growing steadily, albeit from a relatively low base. According to the latest available data, the insurance penetration rate (premiums as a percentage of GDP) in Pakistan stood at around 0.85% in 2020. The total gross written premiums reached PKR 288 billion (approximately USD 1.8 billion) in the same year.


b.    Types of Insurance:

The insurance sector in Pakistan covers various types of insurance, including life insurance, general insurance (property and casualty), health insurance, and takaful (Islamic insurance). Life insurance dominates the market, accounting for a significant portion of the total premiums.


c.     Market Players:

The insurance industry in Pakistan consists of both public and private sector players. There are several insurance companies operating in the country, including State Life Insurance Corporation of Pakistan (the largest life insurer), EFU Life Assurance Ltd., Jubilee Life Insurance Company Ltd., and TPL Insurance Ltd., among others.


2. Insurtech Landscape in Pakistan:


Insurtech, a combination of “insurance” and “technology,” refers to the integration of innovative technologies within the insurance sector to enhance efficiency, customer experience, and product offerings.

In Pakistan, Insurtech is still in its early stages but has been gaining traction in recent years. Technological advancements and increased digitalization have created opportunities for insurtech startups and traditional insurance companies to innovate and provide more efficient and customer-centric services.


a)    Digital Transformation:

Insurance companies in Pakistan are increasingly adopting digital technologies to streamline their operations, improve customer experience, and enhance underwriting and claims processes. Digital platforms and mobile apps are being used to facilitate policy purchases, renewals, and claims settlements.


b)    Online Aggregators:

Online insurance aggregators in Pakistan are allowing consumers to compare and purchase insurance policies from multiple providers on a single platform. These aggregators provide transparency and convenience to customers, helping them make informed decisions.


c)    Insurtech Startups:

There has been an arrival of a number of insurtech startups focusing on various aspects of the insurance value chain. These startups leverage technologies such as artificial intelligence (AI), data analytics, and blockchain to offer innovative insurance products, improve risk assessment, and streamline claims processes.


d)    Regulatory Framework:

The SECP has recognized the importance of fostering innovation in the insurance sector and has introduced regulatory initiatives to support insurtech development. The regulatory sandbox framework allows insurtech startups to test their innovative products and services in a controlled environment. The regulator (SECP) and the government also have a significant role to play in creating an enabling environment to increase insurance penetration in Pakistan.


According to State Bank of Pakistan report, in 2021, insurance premiums for both the life and non-life sectors increased following a resumption of economic activities. Gross premiums for life registered a significant jump due to a doubling of group premiums as the national health insurance program expanded. With more health insurance policies being underwritten, claims for life also increased resulting in an overall increasing claims ratio. Nevertheless, the life sector posted higher profits on the back of an increase in premiums.


The next 10 years in Insurtech & Challenges for Insurance Industry in Pakistan

Despite the progress made, there are still challenges and opportunities for the insurtech and insurance industry in Pakistan. These include;

a. Awareness and Trust:

Increasing awareness about insurance and building trust among consumers remain key challenges. Education campaigns and efforts to enhance transparency can help overcome these barriers and encourage more people to avail insurance products.

b. Regulatory Environment:

While the regulatory environment is evolving, there is a need for further regulatory reforms to encourage innovation, protect consumer interests, and ensure cybersecurity in the digital insurance landscape.

c. Collaboration and Partnerships:

Collaboration between traditional insurance companies and insurtech startups can foster innovation and drive growth. Partnerships with technology firms, data providers, and financial institutions can further accelerate the adoption of insurtech solutions.

d. Microinsurance and Financial Inclusion:

There is a significant opportunity to promote microinsurance and extend insurance coverage to underserved populations, contributing to financial inclusion and social welfare.


The Insurtech landscape in Pakistan is gradually evolving, driven by technological advancements, regulatory support, and changing consumer expectations. With continued efforts to promote innovation, collaboration, and awareness, the insurance industry in Pakistan has the potential to unlock new opportunities and deliver improved products and services to a broader customer base.

Insurtech disruption[1] has the potential to reshape the insurance landscape, challenging established business models and creating new opportunities. It involves the use of innovative technologies, such as artificial intelligence, big data analytics, machine learning, blockchain, and Internet of Things (IoT), to disrupt and revolutionize various aspects of insurance operations, customer experience, and product offerings.

Overall, insurtech disruption represents a transformative force within the insurance industry, reshaping traditional practices, and unlocking new possibilities. While it presents challenges for established insurers, it also brings opportunities for innovation, improved customer experience, and enhanced efficiency, ultimately benefiting both insurers and policyholders.

Insurtech disruption has had a significant impact on the insurance industry in Pakistan. Some specific ways in which insurtech has influenced the Pakistani insurance market are;

  1. Enhanced Customer Experience: Insurtech solutions have improved the customer experience in the insurance industry. Digital platforms and mobile apps allow customers to research, compare, and purchase insurance policies conveniently. Online aggregators provide transparency and ease of policy comparison, empowering customers to make informed decisions. Additionally, digital claims processing and customer support tools have streamlined interactions, reducing response times and enhancing overall customer satisfaction.


  1. 2. Increased Access to Insurance: Insurtech has played a role in increasing access to insurance in Pakistan. Through digital channels, insurtech startups and traditional insurance companies have been able to reach a broader customer base, including previously underserved populations. The use of technology has made insurance more accessible, convenient, and affordable, enabling more individuals and businesses to avail insurance coverage.


  1. Product Innovation: Insurtech disruption has driven product innovation in the Pakistani insurance industry. Startups and traditional insurers are leveraging technology to introduce new types of insurance products and coverage options. This includes microinsurance solutions tailored for low-income individuals and small businesses, as well as parametric insurance policies that utilize real-time data for coverage determination. The introduction of innovative products helps address evolving customer needs and emerging risks.


  1. Process Automation and Efficiency: Insurtech solutions have automated manual processes and improved operational efficiency within the Pakistani insurance industry. This includes digitizing policy administration, underwriting, and claims management processes. By leveraging artificial intelligence and data analytics, insurers can automate repetitive tasks, streamline workflows, reduce paperwork, and expedite policy issuance and claims settlement. This automation leads to cost savings, faster turnaround times, and improved efficiency for insurance providers.


  1. Risk Assessment and Pricing: Insurtech disruption has facilitated more accurate risk assessment and dynamic pricing models. By utilizing data from various sources, such as IoT devices, social media, and telematics, insurers can gather insights on customer behavior, lifestyle, and risk factors. This data-driven approach enables insurers to assess risks more accurately and tailor insurance premiums to individual policyholders’ specific circumstances. Dynamic pricing models based on real-time data help ensure fair pricing and promote risk awareness among customers.


  1. 6. Regulatory Framework and Support: The regulatory framework in Pakistan has recognized the potential of insurtech and has taken steps to support its development. The Securities and Exchange Commission of Pakistan (SECP) has introduced a regulatory sandbox framework that allows insurtech startups to test their innovative products and services in a controlled environment. This supportive regulatory approach encourages innovation, fosters collaboration between traditional insurers and startups, and promotes the growth of insurtech in Pakistan.

[1] Insurtech disruption refers to the transformative impact of technology on the traditional insurance industry.

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