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Pakistan’s insurance evolution

Pakistan’s insurance evolution

Interview with Syeda Nuzhat Afreen — CEO, Damsel Consulting and Damsel Surveyors (Private) Limited

PAGE: Tell me something about yourself, please:

Syeda Nuzhat Afreen: I have done MA Philosophy, M.Phil and doing PhD in Rule of Law in Pakistan. Currently I am working as CEO Damsel Consulting , and Damsel Surveyors (Private) Limited. I have around 15 years of experience of corporate sector.

PAGE: What is your standpoint about health, life, auto and property insurance in Pakistan?

Syeda Nuzhat Afreen: In Pakistan, the insurance industry has been growing steadily over the years, offering various types of insurance products to meet the diverse needs of the population. Health insurance helps individuals cover medical expenses, life insurance provides financial support to families in the event of the policyholder’s death, auto insurance protects against losses due to accidents or theft involving vehicles, and property insurance safeguards against damage or loss of property due to unforeseen events like fire, theft, or natural disasters. However, like in any other country, the effectiveness of insurance in Pakistan depends on factors such as the regulatory framework, market competition, consumer awareness, and the financial stability of insurance companies. It’s essential for individuals and businesses to carefully assess their insurance needs, understand policy terms and conditions, and choose reputable insurance providers to ensure they have adequate coverage when they need it most.

PAGE: How could an individual assess the risks faced in personal or professional life?

Syeda Nuzhat Afreen: Assessing risks in personal or professional life involves identifying potential threats or uncertainties that could negatively impact one’s goals, objectives, or well-being. Here are some steps an individual can take to assess risks effectively:

1- Identify potential risks:

Begin by identifying and listing all possible risks that could affect your personal or professional life. These risks could include health-related issues, financial setbacks, career challenges, legal concerns, or any other factors that may disrupt your plans.

2- Analyze probability and impact:

Once you have identified the risks, assess the likelihood of each risk occurring and the potential impact it could have. Some risks may have a high probability but low impact, while others may have a low probability but high impact. Understanding this balance is crucial for prioritising risk management efforts.

3- Evaluate risk tolerance:

Consider your risk tolerance level, which is your willingness to accept and deal with uncertainty or potential losses. Your risk tolerance may vary depending on the situation, so it’s essential to assess your comfort level with different types of risks.

4- Mitigation strategies:

Develop strategies to mitigate or manage identified risks. This could involve taking preventive measures to reduce the likelihood of risks occurring, implementing contingency plans to minimise the impact if a risk does materialise, or transferring some of the risk through insurance or other financial instruments.

5- Regular review and monitoring:

Risks are dynamic and may change over time due to various factors such as market conditions, personal circumstances, or external events. It’s essential to regularly review and update your risk assessment to ensure that your mitigation strategies remain relevant and effective.

6- Seek Professional Advice:

For complex or specialised risks, consider seeking advice from professionals such as financial advisors, insurance agents, or legal experts. They can provide valuable insights and guidance tailored to specific needs and circumstances.

By following these steps, individuals can develop a comprehensive understanding of the risks they face in their personal and professional lives and implement strategies to manage them effectively.

PAGE: What is your perspective about state-run health insurance programmes?

Syeda Nuzhat Afreen: State-run health insurance programmes can play a significant role in providing access to healthcare services and financial protection for citizens. Here are some perspectives on the benefits and challenges of state-run health insurance programmes:


1- Universal access:

State-run health insurance programmes can help ensure that all citizens have access to essential healthcare services, regardless of their income level or employment status. This can contribute to improving overall population health and reducing disparities in healthcare access.

2- Financial protection:

Health insurance programmes offered by the state can provide financial protection against high medical expenses. By spreading the financial risk across a larger pool of individuals, these programmes help alleviate the burden of healthcare costs on individuals and families.

3- Preventive care:

State-run health insurance programmes often emphasise preventive care and wellness initiatives, which can lead to better health outcomes and reduced healthcare costs in the long term. By covering preventive services such as vaccinations, screenings, and wellness programmes, these programmes promote early detection and management of health conditions.

4- Risk pooling and cost efficiency:

By pooling resources from a large and diverse population, state-run health insurance programs can achieve economies of scale and negotiate lower prices for healthcare services and medications. This can help control healthcare costs and make services more affordable for participants.


1- Funding and sustainability:

One of the primary challenges faced by state-run health insurance programmes is securing adequate funding to sustain operations and provide comprehensive coverage. Balancing costs with coverage expansion while ensuring financial sustainability can be a complex task for policymakers.

2- Administrative complexity:

State-run health insurance programmes often involve complex administrative processes, including eligibility determination, enrollment, claims processing, and provider reimbursement. Managing these administrative tasks efficiently and effectively requires robust infrastructure and resources.

3- Political and policy considerations:

The design and implementation of state-run health insurance programmes can be influenced by political considerations, leading to changes in programme eligibility, benefits, and funding over time. Shifting political priorities and budget constraints may impact the stability and continuity of these programs.

4- Provider participation and access:

Ensuring an adequate network of healthcare providers willing to participate in state-run health insurance programmes is essential for ensuring access to care for beneficiaries. Limited provider participation or uneven geographic distribution of providers can pose challenges to accessing timely and high-quality healthcare services.

Overall, state-run health insurance programmes have the potential to expand access to healthcare, improve financial protection, and promote population health. However, addressing funding challenges, streamlining administrative processes, and ensuring provider participation are critical for the success and sustainability of these programmes.

PAGE: The insurance sector penetration has stagnated for years at less than one per cent of GDP, while several categories, including micro insurance, livestock insurance, and insurance against losses due to disaster and terrorism, were almost nonexistent. Your views:

Syeda Nuzhat Afreen: The stagnation of insurance sector penetration, particularly at less than one per cent of GDP, reflects a significant gap in providing financial protection to individuals and businesses in Pakistan. Several categories such as micro-insurance, livestock insurance, and insurance against losses due to disasters and terrorism being almost nonexistent further exacerbate this issue.

Here are some views on this situation:

1- Limited awareness and understanding:

One reason for the low penetration could be limited awareness and understanding of insurance products among the population. Many people may not fully comprehend the benefits of insurance or how it can mitigate financial risks, leading to underutilization of insurance services.

2- Challenges in product development and distribution:

Developing tailored insurance products that meet the specific needs of various segments of the population, such as micro-entrepreneurs or farmers, can be challenging. Additionally, distributing these products effectively to reach underserved areas and populations may require innovative approaches and investment in distribution channels.

3- Risk perception and affordability:

There may be a perception among individuals and businesses that insurance is not essential or affordable, particularly in a country with varying socioeconomic conditions like Pakistan. Overcoming this perception and demonstrating the value proposition of insurance in protecting against unforeseen risks is crucial for increasing uptake.

4- Regulatory environment and market development:

The regulatory environment and market dynamics play a significant role in shaping the insurance sector. Policies and regulations that foster innovation, competition, and consumer protection can stimulate growth and innovation in the insurance market. Additionally, initiatives to promote micro-insurance and address specific risks such as livestock losses or terrorism can help expand the market.

5- Integration with social protection programmes:

Integrating insurance schemes with existing social protection programs or agricultural support initiatives could enhance resilience against various risks faced by vulnerable populations. By leveraging government support and resources, insurance coverage can be extended to those who need it most.

Addressing these challenges will require collaboration between government entities, insurance regulators, industry stakeholders, and development partners to develop innovative solutions, raise awareness, and improve access to insurance services. Investing in financial literacy programmes, developing affordable insurance products, and leveraging technology for distribution and claims processing could help unlock the potential of the insurance sector to contribute to economic stability and resilience in Pakistan.

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