Insurance sector should be promoted: Lahore Insurance Institute

LAHORE, August 13 (Online): Insurance sector employs more than 100,000 people directly and contributes around Rs20 billion in various taxes and duties to the national exchequer therefore it must be promoted, an industry expert said on Thursday.

Insurance sector has one of the lowest insurance penetrations in the region which is holding economy back, said Muhammad Hisham, Chairman Lahore Insurance Institute.

He said that policy problems are impeding growth of this critical sector which include heavy taxation of over 17 percent on most general insurance business which include high incident of taxation on health insurance.

National assets are not allowed to be insured by private companies which is resulting in absence of level playing field and losses to the government, he added.

Moreover, third party motor insurance in not compulsory in Pakistan as is mandatory in other counties, he said, adding that Pakistan has one of the lowest premium retention and premium is sent abroad mostly for large risks which causes huge foreign exchange loss to the country.

Muhammad Hisham said that federal insurance fee is not spent on development of insurance sector and training of staff and unusual compliance requirements are set for general insurance companies which are very difficult to follow by small establishments.

He said that the government should create pools for flood and natural catastrophe insurance with the help of private sector and insurance sector should be recognized as industry and incentives should be given to boost it for potential employment of another 100,000 people.