The insurance industry in Pakistan is relatively small compared to its peers in the region.  The insurance penetration and density remained very modest as compared to other jurisdictions while the insurance sector remained underdeveloped relative to its potential.  As of December 2011, the industry’s total premium revenue stood at over PKR124 billion or USD1.29 billion.

The market is fairly liberalized as 100% foreign ownership and control of insurance companies is permitted with paid up capital requirements as USD4 million, with the condition of bringing in at least a minimum of USD2 million in foreign exchange and raising an equivalent amount from the local market.  The minimum capital requirements have been increased in a phased manner, though they still remain modest by international standards, at PKR300 million for non-life and PKR500 million for life insurers.

Currently there are 39 non-life insurers operating in the market, including three general Takaful operators and one state-owned company. Approximately 65 percent* of the market share in gross written premium rests with the top three players.  In the CY2011, the sector grew by 16 percent, whereas the total premium of non-life insurance sector stands at PKR54 billion.  In addition, a government owned reinsurer continues to benefit from a mandatory minimum 35 percent share in the treaties of non-life insurers.

There are nine life insurers, including two family Takaful operators and one state-owned corporation in the life insurance sector.  In CY2011, the life insurance market grew by 30 percent, whereas the total premium stood at PKR70 billion.

There are two dedicated health insurance companies in the market along with two foreign life insurance companies and two non-life foreign companies.  The market has witnessed introduction of new products in the lines of health, crop and livestock insurance.  New distribution channels such as Bancassurance, websales and Telesales are also growing rapidly.