Financial Security for All, No Matter Your Income

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) is developing a novel proposal to introduce a micro-insurance scheme run by insurance companies. This scheme would be closely connected to the government's current protection systems, such as the Sehat Sahulat Program and the Benazir Income Support Program (BISP).

In order to boost financial inclusion, an SECP report suggested integrating micro/inclusive insurance plans with other financial services like credit, savings, and remittances.

The SECP has suggested that insurance companies work with the government as partners in social protection programs, such as through the partner-agent model, to provide customized, low-cost, dependable insurance plans that may be implemented on a large scale.  These programs may focus on mass disaster insurance, livestock and crop insurance, and health insurance.

Pakistan is currently at high danger of natural disasters including floods and excessive rainfall. These hazards have a negative impact on labor, shopkeeper, and agricultural populations. Insurance companies now have a significant chance to pursue this market. Reaching vulnerable and low-income areas with micro-insurance has enormous promise.

According to the SECP, the catastrophe micro-insurance program can speed up reconstruction, lessen the social and economic toll that disasters take, and aid in post-disaster rehabilitation. Given this, micro-insurance that is specifically designed to meet the needs of low-income and vulnerable groups emerges as a vital instrument for guaranteeing fair access to protection and encouraging inclusion in the context of sustainable development initiatives. Insurance plays an increasingly important role in helping societies solve complex issues and pave the way for a safer, more resilient, and stronger future.

Only 9.2% of Pakistani citizens are covered by social protection programs, and 8.4% are enrolled in social health protection plans, according to the ILO-Social Protection Platform. This presents a huge opportunity for the insurance industry to grow. Since most people work in the unorganized sector, the micro-insurance method is therefore advised as the second-best option, particularly in cases when the government lacks the resources to provide social protection to workers in the unorganized sector, according to SECP.