KARACHI: The insurance industry is inching towards retail business from the corporate sector, said Jubilee Insurance Senior Vice-President and Head of Marketing Tauseef H. Shah.

Talking to Dawn he said the shift in trend was evident from the number of products launched in recent months and advertising campaigns carried out by the insurance companies.

“The retail sector has remained an untapped segment due to high risk and low returns. The insurance industry in Pakistan used to prefer corporate clients,” he observed.

According to data published by the Insurance Association of Pakistan (IAP), the industry continued double-digit growth in premiums at 12.18 per cent and 14.44pc in non-life and life insurance sectors, respectively, in 2014.

The non-life insurance stood at Rs53.96 billion in 2014 as compared to Rs43.1bn in 2013, while the life insurance business recorded premium of Rs122.01bn in 2014 as compared to Rs106.61bn in the preceding year.

The total insurance gross premium stands at Rs192bn, having a penetration of mere 0.82pc, according to IAP data.

Pakistan insurance penetration remains one of the lowest in the region as compared to India that has an insurance penetration of 3.86pc.

About issues faced by the insurance sector, Shah said people were unaware of insurance products and its working while the pace of expansion in economy had also been slow.

Insurance industry being a tertiary sector suffers from low GDP growth.

Besides, insurance remains non-mandatory in the country, which makes it difficult for the insurers to attract and retain customers, he said.

The insurance industry is also compelled as per SECP regulation to set up separate life and non-life companies, he added.

He was, however, optimistic for the future and said extensive studies had been conducted by several companies to cater to the unique needs of the public.

The Takaful industry has yet to take-off as indicated by its share of just 3pc in the insurance market, Munaf Ahmed, Vice-President, Jubilee Takaful informed Dawn.

He said that the Takaful sector did not witness the level of growth seen in Islamic banking due to the mismatch in policies and needs.

Ahmed said that the Takaful system provides several advantages over conventional insurance. “The recent initiative by SECP to allow conventional insurance companies to set up Takaful windows under non-life insurance will help boost the nascent industry.”

However, the Takaful sector like its conventional counterpart is subject to misconception like religious prohibition by some segments of society.

Published in Dawn, November 22nd, 2015