Pakistan inaugurated its First Microinsurance Agency, which will work in partnership with New Jubilee Life, a subsidiary of the Aga Khan Fund for Economic Development (AKFED) and one of Pakistan's leading insurance companies, as its principal insurer, according to statement issued here on Wednesday.

FMiA is the first insurance agency in Pakistan to be established as a company rather than as an individual enterprise. It said that the FMiA would provide innovative life and health microinsurance products that are carefully tailored to the needs of poor families.

Microinsurance includes a range of products that can help to manage economic hardship such as natural disaster, hospitalisation, or a death in the family. Poor families in the developing world are more likely to experience financial hardships that can make it impossible to rise out of poverty.

Less than three percent of people in the world's 100 poorest countries have any type of insurance to protect them from financial shock. Kaleem Abbas, the new CEO of FMiA said that 'Microinsurance is a relatively new phenomenon, but is attracting increasing interest worldwide by commercial insurance companies.

The provision of low cost insurance to millions of Pakistan's poor families constitutes a vast market potential. Microcredit is a rapidly expanding business in Pakistan and by offering insurance we are expanding the range of financial services available to families which previously had been excluded'. The Aga Khan Agency for Microfinance (AKAM) provided an investment of Pakistan Rs 30 million ($500,000) in start up capital to FMiA.

It is AKAM's second affiliate institution in Pakistan, following on the highly successful First MicroFinanceBank Limited. AKAM currently has Microfinance institutions in 13 countries throughout Asia and Africa. This investment in FMiA, its first in the insurance sector, demonstrates AKAM's determination to build on its outreach to poor families by including them in the formal economy and providing them with a range of financial services to enhance their quality of life and improve their economic security.

FMiA has also benefited greatly from some research and pre start-up funding provided to AKAM in 2005 by the Bill and Melinda Gates Foundation as part of their wider efforts to improve access to financial services for the poor. Javed Ahmed, CEO of New Jubilee Life, said, 'We, at New Jubilee Life, welcome our new partner in developing this important activity.

New Jubilee Life currently insures more that 800,000 lives in the microinsurance sector and with the expertise and assistance of FMiA, we look forward to significantly expanding the market further. We are particularly excited about the development of health insurance products, so that poor families can significantly benefit from healthier lives'.