KARACHI, Feb 3: PICIC Insurance Limited would be formally inaugurated on Friday, by the Prime Minister Mr.Shaukat Aziz. For security reasons perhaps, the invitation card issued by the company does not identify the person who would be cutting the inauguration ribbon , but mentioning him just as the "chief guest".

It is learnt that the job would be performed by the Prime Minister himself. The venue is the Governor House, Karachi. PICIC Insurance company is a wholly-owned subsidiary of the Pakistan Industrial Credit and Investment Corporation Limited (PICIC), which claims to be the largest private sector development finance institution in the country with an equity base of Rs3.5 billion and total assets amounting to Rs27.6 billion as on March 31, 2004.

The Principal business of PICIC Insurance Limited is writing all classes of general insurance business. The company has been established with a paid-up capital of Rs200 million, making it one of the highest capitalised companies in the market.

The parent company and several of its mutual funds are listed on the Karachi Stock Exchange, which brightens up the chances of the Insurance company offering its shares at the bourse some time in the future. PICIC Insurance has the reinsurance support from world's leading reinsurance company's viz. Swiss Re and Munich Re.

Overall, the insurance sector on the Karachi Stock Exchange has under performed the market and excepting a couple of companies, investors have found little charm in their stocks.

Adamjee Insurance is one company that has continued to be briskly traded at the KSE, but that has more to do with its protracted "take over" rumours and news and less due to financial performance.

Shares in most other well-performing insurance companies are tightly held and seldom does a big chunk come up for trading. The people at the market, nonetheless, believe that the stock under performance is not quite reflective of the business growth.

In a booming economy, insurance companies are taking their share of the cake, though some of the smallest of the three dozen general insurance companies listed on the Insurance sector are finding it difficult to swim in a sea of competition. Addition of one more giant, with considerable resources at its disposal, could all but make managers of those tiny firms pull up long faces.