SECP terms ‘inclusive insurance’ a catalyst for economic growthBreaking

May 08, 2024

The Securities and Exchange Commission of Pakistan (SECP) has spotlighted the significance of inclusive insurance as a catalyst for economic growth. The move comes as experts echo the need for prioritising inclusive financial services to drive economic resilience and growth across the nation. The SECP's focus on inclusive insurance stems from its potential to extend financial protection to underserved populations, thereby fostering greater financial inclusivity. Experts emphasise that a fast-inclusive insurance framework not only enhances access to financial services but also promotes economic stability and social welfare. In an interview with WealthPK, a senior director at SECP said the commission’s initiative aligns with broader efforts to address the existing gaps in Pakistan's inclusive insurance landscape. According to a report presented at the International Insure Impact Conference held recently, the current status of inclusive insurance in Pakistan raises concerns regarding accessibility and product diversity.

The SECP senior director said that while microfinance institutions had sold millions of insurance policies, the majority of these policies primarily focused on credit life insurance, indicating a limited scope beyond covering credit-related risks. “Furthermore, the digital distribution of small-ticket insurance products remains underutilised, with only a fraction of insurers actively engaging in this area,” he noted. The expert emphasised the urgent need for collaborative action to bridge regulatory gaps, streamline processes, and enhance awareness to unlock the full potential of inclusive insurance in Pakistan. He stresses the importance of leveraging technology, such as partnering with Mobile Network Operators, to improve product accessibility and distribution channels. In response to these challenges, the SECP, along with industry stakeholders and relevant authorities, has prioritised the development and implementation of comprehensive policies aimed at promoting inclusive insurance growth.

The formation of a synergy group comprising insurance companies, InsureTech firms, and government representatives is proposed to ensure coordinated efforts in advancing inclusive insurance accessibility. In a statement released by the SECP, Commissioner Insurance Aamir Khan underscored the pivotal role of inclusive insurance in bolstering overall insurance penetration. He highlighted the need for insurers and stakeholders to develop tailored products and services that cater to the diverse needs of the population, particularly those in marginalised communities. Inclusive insurance emerges as a strategic tool for promoting financial resilience and driving inclusive growth. With the SECP's proactive stance and expert endorsements, the country stands poised to harness the transformative potential of inclusive insurance for the betterment of its economy and society.

Credit: Independent News Pakistan