Pakistan Insurance Q4 2018
Pakistan's insurance industry is underdeveloped, even in comparison to other markets in Southern Asia. At present,penetration in the life and non-life markets is set at 0.6% and 0.3% respectively. This lack of development is because of long-standing challenges facing local insurance providers, which include low affordability and lack of awareness among local households,as well as cultural issues constraining the use of certain insurance products in a Muslim country. We also note the traditionaldominance of the market by state-owned monopolies, which has deterred private competition and innovation, though this isbecoming less apparent over time. Going forward, the prospects for the market are positive. In a fast-growing economy, risingincome levels and disposable incomes will drive demand for personal lines such as property and motor insurance, while rising lifeexpectancies and a growing retirement-age population will support demand for health and life insurance in particular. The growinginfluence of private and, in particular, overseas insurance companies also shows that the market is becoming more welcoming ofcompetition, which is likely to attract new players and investors to the industry over the next few years.
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