Pakistan ranks as the fifth most disaster-affected country in the world, yet it still has no public disaster risk insurance program in place, according to the Securities and Exchange Commission of Pakistan (SECP) Insurance Sector Performance Report.
The report highlights that despite frequent floods, earthquakes, and climate-related risks, insurance coverage in Pakistan remains alarmingly low compared to regional peers.
Insurance coverage remains critically low
Out of a population of over 240 million, only 7.9 million Pakistanis have life insurance. Similarly, just 900,000 out of 31 million vehicles in the country are insured.
The report further revealed that:
-
Less than one million of 82 million farmers are covered under agricultural insurance.
-
Out of 32 million properties, only three million are insured.
-
Among 91 million bank account holders, just 7.9 million hold any form of insurance.
Experts warn that such low penetration leaves vulnerable communities and sectors at serious financial risk in the face of natural disasters.
Agriculture and infrastructure most at risk
The SECP identified agriculture, farmers, property, and infrastructure as the most exposed sectors to natural disasters. Despite agriculture being the backbone of Pakistan’s economy, farmers’ access to insurance remains negligible.
Analysts believe that the absence of a public disaster risk insurance framework further widens the protection gap for rural communities and low-income groups.
Sector growth but below regional standards
The insurance sector in Pakistan did show growth in 2024, with:
-
Total investment reaching Rs677 billion.
-
Life insurance premiums at Rs435 billion.
-
Non-life premiums at Rs243 billion.
-
Sector assets rising by Rs64 billion to Rs3,504 billion.
The number of insurance policies surpassed 10 million, while family takaful grew by 37% and general takaful by 24%, bringing their combined premium close to Rs100 billion.
However, Pakistan’s insurance penetration ratio -- measured as premiums-to-GDP -- stood at only 0.7% in 2024. In comparison, Bangladesh recorded 1% and India 4%, placing Pakistan well behind regional averages.
