CCP highlights low insurance penetration and urges reforms to improve market access, claims settlement, innovation and consumer protection.
Pakistan’s insurance sector needs stronger competition, greater digitalisation, faster claims settlement and wider market access to unlock its growth potential, the Competition Commission of Pakistan (CCP) has said.
The regulator highlighted the sector’s low penetration, which currently stands at only 0.7 per cent of the country’s gross domestic product (GDP). It said increased competition could encourage innovation, improve service standards and give consumers more choices.
The observations were made during a meeting of the Competition Consultative Group (CCG) titled “Strengthening Competition in Pakistan’s Insurance Sector: Challenges, Opportunities and the Way Forward.” The session brought together insurance companies, regulators, academics and consumer protection representatives.
CCP Chairman Farid Ahmad Tarar said insurance was important for managing financial risks, mobilising long-term savings and supporting broader economic activity. He noted that the sector’s limited penetration indicated significant room for expansion.
According to a CCP presentation, Pakistan has 44 insurers, comprising 36 conventional insurers, seven Takaful operators and one reinsurer. These companies collectively serve around 10.4 million policies.
The regulator identified market concentration, entry barriers, bancassurance concentration, limited consumer awareness, information gaps, claims disputes and delays as key challenges. Weak digitalisation and limited product innovation were also highlighted.
Waseem Khan, Director and Head of the Life Policy and Approval Department in the Insurance Division, stressed the importance of digital transformation, effective implementation of mandatory insurance and expansion of agricultural insurance. The adoption of a risk-based solvency framework and the Insurance Bill, 2026, were also discussed.
Industry representatives identified agriculture, SMEs, retail and microfinance as areas with considerable untapped potential. They called for better insurance products, stronger reinsurance capacity, improved data systems and greater digitalisation.
Participants also emphasised that accurate and comprehensive data was essential for effective risk assessment, pricing, fraud detection and claims management.
A separate panel focused on consumer protection and insurance’s contribution to economic development. Participants called for easier premium payments, quicker claims processing, transparent disclosures, responsible selling practices and stronger complaint-handling mechanisms.
Agriculture, health, Takaful, microinsurance, SMEs and rural markets were identified as key growth areas. The meeting concluded with a call for stronger regulatory coordination, competition advocacy, financial literacy and continued product innovation to build a more competitive and consumer-focused Pakistan insurance sector.