1. Insurance Penetration in Pakistan By Imtiaz Bhatti Managing Director & CEO PAK-KUWAIT TAKAFUL COMPANY LTD

2. PAK-KUWAIT TAKAFUL COMPANY LTD CURRENT STATE OF AFFAIRS 2  Insurance penetration and insurance density are the two widely used parameters for the assessment of the potential and performance of the insurance sector.  Insurance penetration is calculated as the ratio of the percentage of total insurance premiums to gross domestic products (GDP). Currently Pakistan has the lowest insurance penetration in the region.  The insurance penetration is impacted by several macro-economic factors such as growth, inflation, interest rates, savings return and returns of financial products by Banks and Mutual Fund.  Current insurance penetration rate 0.7% of GDP. 0.7% Total Insurance Penetration – 2011, Pakistan vs MENA Pakistan General Penetration : 0.3% Life Penetration : 0.4% Market Size and Growth

3. PAK-KUWAIT TAKAFUL COMPANY LTD MAJOR REASONS FOR LOW INSURANCE PENETRATION 3  Low awareness in general with specific in rural areas.  Non-availability of disposable income.  Negative growth of middle class population.  Lack of any incentive by the Govt.

4. PAK-KUWAIT TAKAFUL COMPANY LTD STAKE HOLDERS OF THE INDUSTRY CATALYST FOR INCREASING INSURANCE PENETRATION 4  Insurance Association of Pakistan (IAP)  Pakistan Insurance Institute (PII)  Agents/Brokers  BANKS/Financial Institutions  Regulators

5. PAK-KUWAIT TAKAFUL COMPANY LTD HOW TO INCREASE INSURANCE PENETRATION 5 Awareness campaign Leveraging consumer bodies by holding seminars and workshops Collective effort by IAP Promoting consumer education and information Creating more organized distribution channels Focused approach for smaller players and new entrants

6. PAK-KUWAIT TAKAFUL COMPANY LTD HOW TO INCREASE INSURANCE PENETRATION 6  Seeking support from SECP for consumer bodies in conducting seminars and workshops on insurance in various parts of the country in order to create awareness about insurance.  Identify what exactly needs to be done.  Steps to be taken forward with a serious note clearly focusing at the various profiles of the consumer/citizen socially and commercially.  Educate the uninsured and the insured about the need of insurance, rights, obligations of policy holders etc. through various media channels viz. print, radio and television. Awareness campaign Leveraging consumer bodies by holding seminars and workshops

7. PAK-KUWAIT TAKAFUL COMPANY LTD HOW TO INCREASE INSURANCE PENETRATION 7 s.s.  All the insurance companies under the umbrella of IAP should pool a sizeable budget to the activity of publicity through various means of communication. The campaign should encompass the following features: a)Simplicity of messaging b)Universally understood c)Language extensibility d)Appeal to a wide section of society e)Adaptable to multiple media and product segments. Collective Effort by IAP  Banc assurance is increasingly becoming acceptable to customers than the traditional channels.  Insurers should invest in systematic training, technological capability and seamless process of integration.  Capacity building in acquiring special skills in telephone and internet based direct selling e.g. -Pricing and selling specific product. -Sophisticated process management to provide a convenient and hassle free customer services. -Straight through processing with minimal human intervention media and product segments. Creating organized distribution channel

8. PAK-KUWAIT TAKAFUL COMPANY LTD HOW TO INCREASE INSURANCE PENETRATION 8  To combat pressures from large players small companies will need to consider the following approaches. a)Distinctive segment or channel specialist strategy to penetrate select spaces. b)Focuses on one or two customer segments adopting a tailored approach for deep penetration. c)Build a high quality and profitable portfolio by becoming a channel specialist e.g. -Banca assurance -Direct only players Focused Approach for smaller & New Entrants

9. PAK-KUWAIT TAKAFUL COMPANY LTD CONCLUSION 9 The insurance penetration will certainly increase if people of Pakistan can be made aware of the various risks associated with their life, business and internal and external environment, nevertheless, the insurance business is the art of selling promise and providing economic security which is the need of the hour to every individual thereby strengthening the Nation’s economy and growth.

10. THANK YOU.