Speakers at the 2nd Saarc Insurance Regulators' Meet & International Conference highlighted the growing opportunities to facilitate the poor masses in the region through insurance, saying that micro-insurance sector should be given more attention to enhance the premiums of the industry.
Speaking at the inaugural session of the conference, chief guest Federal Minister for Inter-Provincial Co-ordination, Riaz Hussain Pirzada, lauded the efforts of Securities and Exchange Commission of Pakistan (SECP) in bringing together the diverse assembly of professionals and practitioners from around the world for the cause of regional development and growth in the field of insurance.
"The conference will be an important milestone in the history of co-operation among the SAARC nations and will enhance regional integration and alliance," he said, adding that the SECP's determination would reap results in the form of well-developed and conducive insurance sector that would help mitigate the risks for the businesses, individuals, besides supporting the economy of the state in multi-dimensional manner.
"The importance of sustainable and strengthened financial sector cannot be overemphasised. It not only serves as effective vehicle for mobilisation of funds which is the life-blood for economy, but also creates employment, entrepreneurships and enhance economic activity resulting in improving the living standards of the people," he observed.
"I am very pleased to know the micro-insurance is playing in respect of partnering the governments' utmost goal of poverty alleviation, social equality and raising the living standards of its people," he added. He said the public-private partnership have greatly augmented the advancement towards the goal of universal health coverage, resulting in effectively combating the deadly infectious diseases and improving the quality of the general health facilities. "The progress of micro-insurance and partnership history in other countries is commendable and entails many inspirations for the local entities to learn from their experiences," he further said.
S M Munir, who was the guest of honour, said that exports of the country would be doubled in next three years. He lauded the SECP for convening the conference, saying that the event would help the insurance industry to grow faster. He said insurance industry has the capacity to sustain even during financial crises. Speaking on the occasion, the SECP Chairman, Tahir Mahmood, said practitioners, who used to describe insurance as an ancillary financial service, have now realised that insurance plays a critical role in the smooth functioning of all sectors of the economy.
"The availability of insurance enables risk-averse individuals and entrepreneurs to manage risk, and earn higher returns, which in turn promotes higher productivity and economic growth," he said, adding that key objective of this conference was to support the development of a sound, stable and inclusive financial sector across the region.
"An efficient and stable financial sector is a prerequisite for sustainable economic growth of a country," he said, adding that the SECP, as part of its mission, strives for creating an environment for businesses and financial institutions to flourish and grow in an organised manner.
Moreover, its approach towards the regulation is open-minded and collaborative, while safeguarding the rights of all stakeholders," he pointed out. He mentioned that SECP, as the apex regulator of the securities markets, non-banking finance sector, the insurance sector and the entire corporate sector of Pakistan, has shown unparalleled commitment to the development of an efficient and friendly financial and corporate sector. "SECP initiatives include a continuous review of the existing legislations and the formulation of new statutes in line with best international practices and global standards," he said.
Mahmood said SECP, as the regulator of the insurance sector, has undertaken a number of initiatives in pursuance of its goal to develop a stable and viable insurance sector that could serve as an effective risk transfer facilitator and provides indemnification mechanism for individuals, corporate and the general economy.
"To make insurance accessible to the wider population in the country, especially the low-income population, SECP has issued a diagnostic report on micro-insurance and also recently notified the Micro-insurance Rules," he added. He said SECP is working with stakeholders to promote crops and livestock insurance products in order to cater to the huge unmet demand in this area. He informed that SECP recently published the "Insurance Industry Reforms Committee Report" for the development of a resilient, inclusive and financially-sound insurance sector.
"To ensure better services for health insurance policy-holders, SECP has issued regulations for the introduction of "Third Party Administrators. SECP is promoting a "Centralised Information Sharing Solution" for the life insurance industry, which will enable information sharing among the life insurers and help them make informed decisions," he maintained.
He said SECP have issued the new Takaful Rules-2012 and formed a Shariah Advisory Board to ensure compliance of regulated entities with Shariah covenants. Saifuddin Zoomkawala, Chairman of the Committee on Finance and Insurance, SAARC Chamber of Commerce and Industry, said:" The safety and happiness of people lies at the heart of the insurance industry."
He said Saarc region was, unfortunately, home to two-fifths of the world's poor and accounted for only three percent of global output and two per cent of world exports. "Intra-regional trade has stagnated at around five percent of its total trade, compared to over 50 percent in East Asia and around 20 percent in Latin America. Even Sub-Saharan Africa, with poor transport and telecommunication infrastructure, score above South Asia, with over 10 percent of its trade being intra-regional," he added. He said that exchange of ideas and information at this conference would generate professional benefits at many levels.
He said that the event would help the regulators to develop better regulatory regimes. "It will help insurance industry professionals identify and introduce new products and services in their respective markets. It will help companies establish new business relationships, besides formation of ties between the banking and insurance industries," he said.
Special Adviser to the Prime Minister, Dr Musadik Malik, stressed that human angle should always be the priority while talking about the insurance industry. "It should always be about wellness, not about illness," he said during his carefully crafted speech. He urged stakeholders of the insurance industry to broaden their horizons as "narrowness of thinking is detrimental".
"It's the dilemma of Pakistan that we are talking about the health insurance without health infrastructure," he said, adding that the need was to plug the insurance into its proper place in a holistic healthcare programme. Insurance Association of Pakistan's(IAP)Chairman, Muhammad Ali Zeb, said that IAP has taken this event as an opportunity to announce that Insurance industry under the banner of IAP would celebrate 2nd Insurance Day on May 6, 2014 and various activities have been planned with the purpose of enhancing insurance awareness among the masses and specially students. Craig Thorburn Lead Insurance Specialist, World Bank said risk based supervision in insurance should be delegated to the insurance supervisors who could better manage the risks being in touch with ground reality than the managers.
He said Risk Based Supervision in Insurance sector required considerable investment in technical capacity and process development across the whole supervisory authority. It needed change of mindset for both supervisors and insurers. He said the supervisors have to evaluate insurer risk ratings, data collection that identifies and assesses risk (not only compliance), graduated intervention guide and process ensure consistent response. They needed more transparency required to ensure confidence. They have to undertake more targeted and less general on site inspections. They have to requests to companies to go beyond correcting legal breaches.
Arup Chattarjee, Senior Financial Sector Specialist, Asian Development Bank (ADB), said that ADB is working to reduce the poverty in region. He said that health insurance sector should be focused to facilitate the masses. Heanna Holtz, Chief Project Manager ILO, Stephen Kasper, General Manager, Life & Health International, Hannover Re, Germany and others also spoke.