KARACHI: Saarc states should work together to develop an insurance sector like that of the European Union as the region continues to suffer from underinsurance, suggested Federal Minister for Interprovincial Coordination Mian Riaz Hussain Pirzada on Tuesday.

Speaking on the first day of the 2nd Saarc Insurance Regulators’ Meet and International Conference, organised by the Securities and the Exchange Commission of Pakistan (SECP), the minister said the government was studying the successful policies of countries like Bangladesh and India, and was doing all it could to support the domestic insurance sector.

He said one of the top priorities of the government was to liberalise the financial sector to help it grow by the support independent market forces.

The performance of Pakistan’s insurance sector, considered as on one of the untapped segments of the national economy, has been dismal throughout the recent past because of various reasons like unawareness and religious concerns, among others. According to an SECP report published recently, the country’s insurance density (premium per capita) was $8 in 2012 compared to $59 in India and $60 in Indonesia. Penetration remained around 0.7pc during the past decade, one of the lowest in the region.

However, the total gross written premium of the industry has constantly grown to Rs145bn (Rs88bn life; Rs57bn non-life) as of Dec 31, 2012 since 2006, when it was Rs56bn (Rs23bn life; Rs33bn non-life). The total assets of the sector were Rs532bn by end 2012.

SECP Chairman Tahir Mahmood, who also spoke on the occasion, said the practitioners who used to describe insurance as an ancillary financial service have now come to realise its importance.

Saifuddin Zoomkawala, chairman of the Committee on Finance and Insurance of the Saarc Chamber of Commerce and Industry, regretted that the Saarc region is home to around two-fifths of the world’s poor and accounts for only three per cent of global output and 2pc of world exports.

Special adviser to the prime minister, Musadik Malik, emphasised the need to prioritise human angle when discussing the insurance sector. “Stakeholders of the insurance industry must broaden their horizons as narrowness of thinking is detrimental.”

In his well-crafted speech, he said, “People should be the focus, not insurance. Wellness should be the focus, not illness.”