Insurers wait for life insurance to take-off

The demand for life insurance in Pakistan, despite the country’s large population, is low compared with other countries in the region. However, despite the challenges of widespread illiteracy and poverty, the Pakistan economy has been growing in recent years with a corresponding growth in disposable incomes. This has led to an increase in demand for goods and services including financial services such as insurance, including life insurance. Indeed, life premiums have been increasing by around 30% per year since 2002. Insurers have been targeting middle class clients with notable success and, in further attempts to increase market penetration, insurers are also addressing traders in smaller urban centres and even the better-off in rural areas.In addition, low cost, micro-insurance, products are being developed for the rural markets

In 2005 life premium income amounted to PKR18.56bn (US$311.70mn) whilst that for non-life premium was PKR6.83bn (US$450.80mn) giving an overall total of PKR45.38bn (US$762.50mn). The life account grew by 26.4% over 2004. No separate personal accident and healthcare statistics are available.