A.      Background

This refers to following TIQCs (in trail, blue, italic and after double line):

1 of 22.1.24 about Introducing Takaful & Insurance (TIQC) New QC area
 

2 of 24.1.24 about Life Insurance correctly claimed by deceased Mother-SCP

B.   Updated Commentary

Further to KQU 2760, being an Important matter, we would inform you about SECP report on Pakistan's potential for micro and inclusive insurance (Attachment 3.1) in the ensuing paragraph, with emphasis in bold for quick reading.

2.   The SECP has issued a Report titled Unlocking the Potential of Micro and Inclusive Insurance in Pakistan (Attachment 3.2 - table of content on page 3) which provides an overview of the current landscape and vast untapped potential market for inclusive insurance.

3.   According to a press statement issued by the SECP the report’s draft version and synopsis were presented at the International Insure Impact Conference, 2023, held in Karachi.

4.   This report explores inclusive insurance in Pakistan, highlighting its untapped market potential, comparing it to other jurisdictions, analyzing gaps and proposing a future course of action.

5.   The data collected indicates a concerning status of an inclusive insurance market in Pakistan. A total of 12.56 million insurance policies were sold through microfinance banks/institutions. Out of these, 89% are credit life insurance, indicating a primary focus on covering the underlying credit risk.

6.   Moreover, of the 20 insurers offering inclusive insurance, only four are actively involved in digital distribution of small ticket products.

7.   Commissioner Insurance, Mr Aamir Khan in his message for the Report said that “inclusive insurance is of paramount importance for growth of the overall insurance penetration as it will assist and encourage insurers and other stakeholders in developing products and services that foster greater financial inclusivity.

8.   Acknowledging the urgency of this matter Collaborative Efforts are required to bridge Regulatory Gaps Streamline processes, enhance awareness and improve product accessibility through focusing on digital distribution.

9.   By partnering with mobile network operator’s micro insurance providers can leverage their extensive network and digital infrastructure.

10.  The way forward to make inclusive insurance accessible to the target market is through amendments in Micro Insurance Rules 2014 and leveraging technology to the fullest.

11.   Collectively SECP, and insurance industry, along with other relevant authorities, have prioritized the development and implementation of comprehensive policies to facilitate inclusive insurance growth.

12.   The report suggests forming a synergy group and involving insurance companies, InsureTech, and the government to ensure inclusive insurance accessibility for underserved populations.

C.  Kasbati & Co Views & Recommendation

We trust that the Report is also valid for Takaful and your goodself can find the same through the Control F function. 

Keeping in view Shariat Court Order dated 28.4.22 against Riba (including Insurance), it is better to proceed towards Takaful (rather than Insurance)

D.   Further Details

Should you require any clarification or explanations in respect of the above or otherwise, please Feel free to email Mr Amsal at amsal@786tax.com with CC to     info.kasbati@professional.excellence.com