Private companies in the life insurance sector have shown remarkable growth in the last five years. KARACHI:
If all countries of the world were ‘profiled’ from the perspective of an insurance agent looking to sell life policies, Pakistan should rank among the most lucrative markets. According to Swiss Re Group – a global wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer – life insurance in Pakistan was significantly small even when compared to its peers in the region. Life insurance penetration – defined as the collective share of gross premiums collected by all life insurance companies in the gross domestic product (GDP) of the country – was only 0.3% in Pakistan during 2010. However, for India, Sri Lanka and Bangladesh, life insurance penetration remained 4.4%, 0.6% and 0.7%, respectively, in the same year. Out of the seven life insurers operating in Pakistan, six belong to the private sector with a collective market share of 36% in 2011. The two largest private life insurers – EFU Life Assurance and Jubilee Life Insurance – had a combined market share of 26%, which left the remaining four private companies with a collective share of only 10%. Although the market share of the state-owned State Life Insurance Corporation of Pakistan (SLICP) had remained stable in the last five years, private companies in the life insurance sector have shown remarkable growth. For example, while total assets of the SLICP grew at an annualised rate of 14.5% during the last five years, the aggregate growth in the assets of private-sector companies for the same period had been a staggering 30.8% per annum. Speaking to The Express Tribune, EFU Life Assurance Chief Strategy Officer Mohammed Ali Ahmed said three factors differentiated private-sector life insurance companies from the state-owned insurance giant that controlled 64% market share. “I believe the differentiating factors are the product value and flexibility pre- and post-sales...
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