ISLAMABAD, Oct 22: Pakistan’s export and business activity will be hit even beyond its official estimates as international insurance companies are unlikely to enter into fresh agreements after Jan 1 due to higher war risk.

“Our real concern is about the situation that will emerge after Jan 1. Our insurance companies don’t have re-insurance cover and they (international insurance companies) may not enter into fresh agreements because of the risk involved,” Khalid Mirza, chairman of the Securities and Exchange Commission of Pakistan (Secp), told Dawn on Monday.

Ministries of finance and commerce have been apprehending a $2.5-$5 billion impact due to the Afghan crisis.

Due to the war risk arising out of US attacks on Afghanistan “insurance premium has already gone up which has obviously affected our exports and business of insurance companies, but real problem will emerge after January 1,” he said.

The head of the corporate market regulator, who constituted a task force last week to look into the impact of recent crisis on the insurance business, said that re-insurance treaties were in place till Dec 31.

“International insurance companies have informed that they will not insure riots, civil confrontations and terrorist activities,” said the chairman, adding “we have to see how to deal with that situation”.

He said the impact of the Afghan crisis had affected the business, particularly the insurance sector, around the world and the US Congress was introducing a bill for pooling arrangements through which the US government could lend support to its companies. “But we don’t have the capacity to do that,” said the chairman, adding Pakistan companies also needed extra liquidity.

The Secp chief said that the four-member task force headed by Pakistan Re-insurance Company chairman Kamal Afsar would submit its report by Nov 10.

“The task force has been asked to look into the whole question and come up with some doable and cogent actions to meet this situation,” he said.

Referring to the last week’s deliberations, the Secp chief said that all the insurance companies had been directed not to put deposit with the banks to obtain insurance business.

“As a regulator, we register treaties of insurance companies on the basis of their sound footing.”