Insurance industry failed to deliver amid pandemic: Dr Murtaza Mughal

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Former Convenor FPCCI Central Committee on Insurance Dr Murtaza Mughal on Saturday said the insurance industry has failed to deliver amid pandemic calling for new products and reforms in this sector so that it can deliver in challenging environment.

Talking to Senior Vice Chairman Insurance Association of Pakistan (IAP) and CEO Alfalah Insurance Abdul Haye and other industry experts, Dr Murtaza Mughal said that claims are being avoided because the policies were not designed to pay out when there is a pandemic; and if paid, it will push service providers to insolvency.

He said that insurance is meant to act as a safety net for people and businesses but presently some type of government-backed scheme is needed.

He said that SECP and Insurance Association of Pakistan (IAP) must join hands to boost the insurance sector so that it can play its due role in the national development while improving the insurance penetration which is a prerequisite for a stable economy.

He emphasised on increasing insurance penetration in Pakistan which is less than 1 percent of the GDP as against the global average of around 5 to 6 percent.

Dr. Mughal who is also president of Pakistan Economy Watch stressed on the need of implementation of compulsory third party motor insurance and compulsory group medical insurance in Pakistan which is pending with SECP since 2018.

He was of the view that annually almost 20,000 people die in road accidents while many more get injured and they are not compensated.

CEO Alfalah Insurance Abdul Haye was of the view that in wake of current pandemic private employers having more than 50 employees should provide health insurance cover to their staff while enforcement of compulsory group life insurance in Pakistan for companies should be considered.

The participants emphasised on adoption of uniform laws governing insurance sector as different provinces are following different rules and regulations creating problems while business ethics should be stressed.

Satwat Butt, former chairman Regional Committie North IAP, Chairman Lahore Insurance Institute Muhammad Hisham and Altimash Malik, GM UIC and others were also present in the meeting.

In: Pakistan Economy WatchAuthor: pakistaneconomywatch