State-run insurance firms expand rapidly: Gohar
Pakistan’s public sector insurance companies have not only expanded their market share but also pioneered the development of innovative products to cater to the needs of low-income individuals and micro-entrepreneurs.
A high-level meeting was convened on Thursday to evaluate the performance of public sector insurance companies, State Life Insurance Company (SLIC), National Insurance Company (NIC) and Pakistan Reinsurance Company (PRC).
The meeting, chaired by Caretaker Finance Minister Shamshad Akhtar, was attended by Caretaker Commerce Minister Gohar Ejaz along with relevant federal secretaries among others.
The meeting was also attended by the Minister for IT & Telecom, Deputy Chairman Planning Commission and Secretary SIFC, Secretary Commerce, Chairman FBR, Special Secretary Commerce, Chairman SECP, Chief Executive Officers of the three public sector companies.
Gohar informed the meeting that Pakistan’s public-sector insurance companies, namely, State Life Insurance Company, National Insurance Company and Pakistan Reinsurance Company, have been an engine of growth for the performance of insurance industry in Pakistan.
He further averred that these companies manage funds of around Rs. 2 trillion and have established themselves as pillars of financial stability and innovation. Mr Ejaz said that public sector insurance companies have been an engine of growth for the performance of the industry.
Over the years, they have consistently demonstrated their ability to navigate economic cycles, maintain financial stability, and adapt to evolving market conditions, he added.
The SLIC has seen a significant surge in its market share in the past three years, rising from 50pc to an impressive 70pc, with the growth momentum set to continue into 2023. The company’s premium income has soared, exceeding Rs320 billion, up from Rs284bn in 2022, while its investment income stands at over Rs206bn.
SLIC’s total assets under management have reached a staggering Rs1.55 trillion, with Rs1.2tr invested in government securities and Rs155bn in the Pakistan Stock Exchange (PSX). In 2023 alone, SLIC invested Rs313bn in government securities and Rs40bn in the PSX, demonstrating its robust support for the capital markets.
SLIC’s expected total profit for 2023 is projected to be Rs130bn, a substantial increase from Rs110bn in 2022. The new business premium revenue is anticipated to reach Rs200bn in 2023, up from Rs174bn in 2022. In 2023, SLIC’s expected total profit is Rs130bn compared to Rs110bn in 2022.
The NICL has doubled its revenue in three years and had a gross written premium (GWP) of Rs30bn by the end of 2023 with a market share of around 17.5pc in the general insurance industry. With the largest equity, it has huge underwriting capacities for both marine and nonmarine businesses to cater for the needs of national projects and assets.
The investment portfolio of NICL has increased to Rs60bn as compared to the whole insurance industry investment portfolio of Rs115bn in FY22.
The company earns an investment return of Rs6bn besides Rs560 million in rental income.
The NICL pays Rs700m dividend to the federal government every year and is the highest taxpayer in the industry. NICL has a customer base with a net claim ratio of 54pc as compared to the industry average of 47pc in FY22. The PRCL paid-up capital increased from Rs3bn to Rs9bn in the past two years while the annual gross premium surpassed Rs25bn.
Its net underwriting profit doubled and the net overall profit swelled over 100pc.