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TEXT: Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for a premium. An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount called premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk has evolved as a discrete field of study and practice.

Insurance in Pakistan

Pakistan’s industry facing number of crises which are increasing day by day such as Inflation Gas water electric shortage and ruins medium size and cottage industry. Other hand Corona series creating havoc. Businesses are gradually switching towards virtual mode.

Insurance is a capital-intensive sector, and insufficient capital has been a challenge facing insurers therefore steps are needed so that they can have enough capital for stoking the growth in line with their expectations.

Insurance Industry is important part of economical hub directly or indirectly linked with industries as a friend in need. For the continuation of business activity industry requires safeguard for disasters need to learn and understand the importance of Conventional Insurance and takaful (shariah Compliant products ) requirement as a future safety option.

In terms of Gross Premium Written (GPW), Pakistan’s general insurance industry had a total size of PKR~108,322 mln in CY20, (less than ~1% of its GDP), with a growth of ~3.7% from the previous year (CY19: PKR~104,453mln).

• The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remains very modest as compared to other jurisdictions while the insurance sector remains underdeveloped relative to its potential. Gross premiums written of non-life insurers in India reached USD~26.5bln in FY21, from USD~26.4bln in FY20.

The insurance industry is undergoing significant change both in terms of its size and products. Takaful companies and Takaful Window operations in Conventional Insurance companies have been established and are gaining market acceptance. Life insurance which was a preserve for Public sector only is now flourishing in private sector and is slowly gaining market share. Insurers have adapted well to a rapidly changing regulatory and business landscape and can now set their sights on growth.

Intense regulatory scrutiny and control will promote transparency and financial strength across the industry. At the same time, developments in technology are creating opportunities for insurers to provide their customers with the right services and products at the right time.

A focus on customers remains a priority; products must reflect changing needs and demands. A new generation is entering the marketplace with different perspectives, while existing customers are keen to take advantage of more flexible options.

Insurance is become necessary also beneficial for common individual. Education, Medical treatment marriages cost rising due to taxes and inflation insurance sector provides cost effected peaceful solution for an individual.

SECP is playing vital role in the growth of the Insurance sector in Pakistan, keeping proper check and balance. SECP took initiative and introduced the Insurance Reform Roadmap for the betterment and growth of the Insurance Industry that’s a positive step by SECP to promote the Insurance sector and to accommodate market changes and bring the local insurance industry on par with International Standards. Insurance companies have importance both for businesses and individuals as they indemnify the losses and put them in the same positions as they were before the occurrence of the loss. In addition, insurers provide economic and social benefits in the society i.e. prevention of losses, reduction in fear and increasing employment.

The United Insurance of Pakistan Limited (UIC) is one among 6 largest insurance companies of Pakistan and member Company of United International Group (UIG). UIC performance contributes positively towards the growth of the Pakistan’s economy as well Insurance industry.

The United Insurance Company of Pakistan Limited (UIC) was incorporated on October 20, 1959, as a Public Limited Company under the erstwhile Companies Act 1913, Companies Ordinance, 1984 and now Companies Act 2017 in force. Its shares are quoted on Pakistan Stock Exchange Limited. UIC provides cost effective risk management solutions to its policy holders/Participants through quality service and significant Products.

The United Insurance has maintained IFS rating (AA) by Credit Rating Agency (PACRA) and IFS Rating Agency VIS (formerly JCR-VIS) also upgraded UIC to AA these ratings proving its stability and sustainability and Alhamdulillah growing in passage of time.

The Principal activity of the company is General Insurance Business and it qualifies as a domestic insurance company under Insurance Ordinance, 2000 and underwrites fire, marine, motor, personal accident, health, crop, livestock, workmen's compensation, erection all risk, fidelity guarantee, machinery and equipment, break down policy, employer's liability etc. The Fire and Property Damage segment compensate customers for damage suffered to their properties or for the value of property lost. The Marine, Aviation and Transport segment focuses on the loss or damage of vessels, cargo, terminals, and any transport of property by which cargo is transferred, acquired, or held between the points of origin and final destination. The Motor segment is involved in the protection against losses incurred as a result of theft, traffic accidents, and against third party liability that could be incurred in an accident. The Crop segment deals with financial protection against natural disasters, fire and lightening, and insect or pets attack on standing crop. The Miscellaneous segment covers engineering and livestock, personal accident, worker’s compensation, travel guard, products of financial institutions and health insurance. To strengthen backbone of the company, UIC always try to select the world renowned Reinsures / Re-Takaful companies rated AA-/A+ by S&P and AM Best, Swiss Re-insurance Company, Zurich and Hanover are few of them.

UIC is pioneer in Window Takaful Operation through license Number 1 on August 18, 2014 by Securities and Exchange Commission of Pakistan under Window Takaful Rules, 2012 a Shariah compliant segment of the insurance business. UIC providing shariah based products on purity basis UIC Window Takaful team develops products as per requirement of the market under strict guide lines of Company’s Shariah advisor.

UIC has a wide network of branches, catering for all the major cities of Pakistan. At present the Company has more than 100 branches all over Pakistan and striving hard with promise to extend its coverage to other remote areas of country. The Company added online services which can easily be availed from anywhere at any time.

Corona virus pandemic opened new horizon of ideas to promote digital/online products and new venues of businesses.

UIC is urging and working out to adopt visual business strategies and to promote digital products. UIC aim is to fulfill expectations of its policyholder and participants and stands in market as an innovator.

Company’s aim is to provide the best services and become a helping hand at the time of emergency.For the convenience of our clients, In short, we serve our clients with a high standard of risk management and coverage.

Copyright Business Recorder, 2022

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