Insurances

The Insurances market in Pakistan is expected to witness significant growth in the coming years.
According to projections, the market size, measured by gross written premium, is set to reach US$11.48bn in 2024.
Life insurances holds the dominant position in the market, with a projected market volume of US$6.80bn in the same year.
In terms of individual spending, the average per capita expenditure in the Insurances market is estimated to amount to US$46.81 in 2024.
This figure provides valuable insights into the level of insurance coverage and financial protection available to the population.
When comparing the Insurances market globally, it is worth noting that the United States leads the way in terms of nominal value.
In 2024, the United States is projected to reach a gross written premium of US$3.8tn.
This highlights the significant scale of the insurance industry the United States.
Looking ahead, the Insurances market is expected to maintain steady growth.
With an annual growth rate of 1.19% (CAGR 2024-2029), the gross written premium is projected to reach US$12.18bn by 2029.
Once again, the United States is anticipated to generate the highest gross written premium globally, with an estimated value of US$3.8tn in 2024.
Overall, these numbers and projections demonstrate the potential and importance of the Insurances market in Pakistan.
As the market continues to grow, it will play a crucial role in providing financial security and stability to individuals and businesses alike.
Pakistan's insurance market is experiencing a surge in demand for health insurance due to rising healthcare costs and increasing awareness of the importance of comprehensive coverage.

Definition:

Insurance is a financial arrangement that provides individuals or businesses with protection against unexpected financial losses. In exchange for regular payments, known as premiums, an insurance policyholder is covered in case of specific events, such as accidents, illnesses, or damage to property. When a covered event occurs, the insurance company compensates the policyholder, helping them recover from the financial impact of the loss or damage. Gross written premium (GWP) is the main indicator of the insurance market. It is the total amount of money that an insurance company collects from policyholders for their insurance coverage before deducting expenses or commissions.

Structure:

The insurance market comprises life and non-life insurances. The non-life insurance market covers the following insurance types: health, motor vehicles, property, general liability, and legal.

Additional information:

The market contains the following KPIs: gross written premium aggregated for all countries and regions, gross written premium per capita, gross claim payments, loss ratio – calculated as gross claim payments divided by gross written premium, for selected European countries the distribution channels of insurance bookings, and the share of insureds in the total population for over 50 countries for live, health, motor vehicle, property, general liability, and legal insurances.

Life insurances
Non-life insurances

Some non-live insurances, such as travel insurance, freight insurance, and accident insurance
Reinsurance

The Insurances market in Pakistan has been experiencing steady growth in recent years, driven by various factors influencing consumer behavior and market dynamics.

Customer preferences: Customers in Pakistan are increasingly seeking insurance products that offer comprehensive coverage at affordable prices. There is a growing awareness among the population about the importance of insurance in mitigating financial risks, leading to a shift towards purchasing a wider range of insurance products. Additionally, customers are showing a preference for digital insurance solutions that offer convenience and accessibility.

Trends in the market: One of the notable trends in the insurance market in Pakistan is the increasing penetration of microinsurance products. These products cater to the needs of low-income individuals and provide them with access to essential insurance coverage. Another trend is the rise of bancassurance, where banks collaborate with insurance companies to offer insurance products to their customers. This distribution channel has gained popularity due to its convenience and ability to reach a wider customer base.

Local special circumstances: In Pakistan, the insurance market is influenced by regulatory changes and government initiatives aimed at promoting insurance penetration in the country. The regulatory environment plays a crucial role in shaping the market landscape and driving innovation in product offerings. Moreover, the cultural perception of insurance as a safety net for the future is also a significant factor shaping customer behavior in the market.

Underlying macroeconomic factors: The economic growth and stability in Pakistan have contributed to the expansion of the insurance market. As the country's middle class continues to grow, there is an increasing demand for insurance products to protect assets and secure financial well-being. Additionally, factors such as urbanization, rising disposable incomes, and changing demographics are driving the growth of the insurance market in Pakistan.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

Both the number and cost of global risks are rising due to drivers, such as climate change and cyber crime, and these trends are impacting in the insurance industry. The global insurance market was worth almost six trillion U.S. dollars in 2022, but this looks set to increase substantially in the coming years. Cyber crime is consistently seen as a leading risk to global business by risk management experts. Meanwhile, the cost of natural disaster losses rose over the past two decades. These risks are likely to grow in the future, which will sustain the growth of the insurance sector.