ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has proposed integration of insurance with the Benazir Income Support Program (BISP).
The SECP has published a landmark report titled, “Role of Insurance in Social Security: Landscape of Pakistan.”
The study explores the potential of insurance as a key instrument for social protection and financial resilience, particularly for vulnerable and underserved populations.
The report revealed that BISP, as Pakistan’s largest social safety net, supports millions of vulnerable families through cash transfers and other welfare programmes.
Integrating insurance into BISP can significantly enhance its impact by providing long-term financial resilience to beneficiaries. For example, incorporating health, life, or disability micro-insurance alongside cash assistance can ensure families are protected from unforeseen medical expenses, loss of a breadwinner, or other financial shocks.
This approach would reduce the direct burden on the government’s budget by shifting some of the financial risk to insurers, making the programme more sustainable. Additionally, beneficiaries would gain more than just temporary relief — they’d have access to structured, ongoing financial protection, fostering a shift from reliance on aid to greater self-sufficiency and resilience in the face of adversity.
This integration could also pave the way for financial inclusion, linking vulnerable populations to formal financial services through insurance.
Developed under SECP’s Five-Year Strategic Plan, “Journey to an Insured Pakistan,” the report highlights the limited coverage and weak enforcement of existing mandatory insurance laws, as well as the absence of national-level insurance schemes for informal sector workers.
Despite legal provisions requiring group life insurance for formal workers, only 9.5 million workers out of the total 72 million workforce are currently covered, leaving millions without financial protection against accidents, disability, or loss of life.
Drawing from international best practices, the report offers a strategic roadmap centered on five key reforms: strengthening legal frameworks, integrating insurance with social safety nets, enhancing enforcement through data linkages, launching a national social insurance scheme for informal workers, and developing standardised, accessible insurance products.
In his message, the SECP chairman emphasised the commission’s commitment to strengthening Pakistan’s insurance sector as a tool for sustainable development, financial protection, and social inclusion. The commissioner insurance further called upon all stakeholders—including lawmakers, insurers, social security institutions, and employers—to collaborate in translating these recommendations into actionable reforms.
Copyright Business Recorder, 2025
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