Insurance industry: CCP examines competition, market structure, growth constraints

ISLAMABAD: Pakistan’s insurance penetration remains at just 0.7 percent of GDP, with insurance density of only around USD 12 per capita, highlighting the limited reach of the industry despite a population of more than 240 million and significant untapped demand across agriculture, SMEs, health, microinsurance and rural markets.

The figures were presented at a meeting of the Competition Consultative Group (CCG), convened by the Competition Commission of Pakistan (CCP) to examine competition, market structure and growth constraints in the insurance industry.

According to the presentation made at the meeting, Pakistan currently has 44 insurers, comprising 36 conventional insurers, seven Takaful operators and one reinsurer. The industry has around 10.4 million policies, of which 7.6 million are life insurance policies and 2.7 million non-life policies.

The sector directly employs 20,159 people, while another 235,197 people are associated with it indirectly. Despite this institutional presence, its contribution to GDP remains below one percent.

Chairman CCP Farid Ahmad Tarar said the figures showed considerable room for expansion of the insurance industry. Insurance, he said, performs an important economic function by managing risks, mobilising long-term savings, supporting development of financial markets and providing financial security to households and businesses.

The CCP presentation identified market concentration, high entry barriers, concentration in bancassurance, information asymmetry, low consumer awareness, claims disputes and delays, regulatory costs, limited innovation and inadequate digitalisation among the major factors constraining competition and market development.

The Commission particularly highlighted distribution-related constraints. Concentration in bancassurance could restrict access to an important distribution channel, particularly for insurers without comparable banking relationships, while regulatory and operational requirements could disproportionately affect smaller players and potential new entrants.

CCP also identified claims delays and disputes as a competition and consumer-confidence issue, noting that poor claims experience could discourage consumers from purchasing insurance. Information asymmetry also makes it difficult for consumers to effectively compare policy terms, benefits and exclusions.

The presentation identified significant expansion opportunities in agriculture, health insurance, Takaful, microinsurance, rural markets and the growing middle class, while digital distribution could substantially broaden access and lower transaction costs.

Presenting the regulator’s perspective, Waseem Khan, Director/HOD, Life Policy and Approval Department, Insurance Division, highlighted effective implementation of mandatory insurance, digitalisation, scaling up agricultural insurance and adoption of a risk-based solvency framework among measures capable of deepening the market. The proposed reforms under the Insurance Bill, 2026 were also discussed.

Industry leaders participating in the CCG said Pakistan’s insurance market also suffers from inadequate data infrastructure, documentation constraints, high customer-acquisition costs and limited reinsurance capacity.

The first industry panel comprised Kamran Arshad Inam, MD & CEO, EFU General Insurance; Azfar Arshad Inam, CEO, Jubilee General Insurance; Faisal Khan, CEO, IGI General Insurance; SharjeelShahid, CEO, UBL Insurers; and Muhammad Ashar, Divisional Head, State Life Insurance Corporation of Pakistan.

Participants identified agriculture, SMEs, retail and microfinance among the major untapped markets and called for improved data availability and connectivity. Better data, they maintained, could strengthen risk assessment and pricing while facilitating fraud detection and claims management.

A second panel comprising Dr Abid Qaiyum Suleri, Executive Director SDPI and Chairman Board of Directors of the National Disaster Risk Management Fund; Ghulam Ghous, Advisor In-Charge, Federal Insurance Ombudsman; KhurramIrshad Khan, Executive Director NICL; DrBakht Jamal Sheikh, Advisor to CEO, Technical Affairs, Adamjee Life Assurance; and Nadeem Iqbal, CEO, The Network for Consumer Protection, focused on consumer protection and economic development.

The panel highlighted claims settlement, responsible selling, policy disclosure and complaint handling as critical to restoring consumer confidence. Participants also called for digitalisation of the complete insurance cycle — from purchasing policies and paying premiums to lodging and settling claims.

The CCG deliberations indicated that expanding Pakistan’s insurance market would require not only greater competition among existing insurers but also bringing currently underserved consumers and economic sectors into the formal insurance system.

Concluding the meeting, Tarar said the deliberations would help CCP identify areas where competition advocacy, regulatory coordination and appropriate policy interventions could strengthen the sector and promote a more competitive, contestable and efficient insurance market.

Copyright Business Recorder, 2026