Insurance sector profit grows 26pc in Pakistan

KARACHI: During the first nine months of the year 2007, most of the private listed non-life insurance companies listed on local bourses depicted a growth of approximately 26 per cent by registering a profit after tax (PAT) of Rs3.9 billion.

In the corresponding period of last year, these companies had registered a growth of 25 per cent to Rs31bn. In 2006, private non-life insurance sector’s gross premium grew by 23 per cent to Rs28bn

Higher investment income is the major reason behind the decent net profit growth of the sector, which registered an upsurge of 31 per cent to Rs3.6bn primarily due to increase in the capital gain income, a research report prepared by First Capital Research said.

Insurance sector in Pakistan is considered as under penetrated versus region. On the basis of 2005 premium, insurance penetration and insurance density in Pakistan is recorded at 0.4 per cent and US$2.8, which is one of the lowest in the region. Interestingly, average insurance penetration in Asian countries and the world are recorded at 1.67 per cent and 3.18 per cent, respectively. While insurance density in Asia and the world on an average is at the level of US$48.3 and

US$219, respectively. The FCEL in its analysis consisted 11 non-life insurance companies that are listed on local bourses and occupy 82 per cent share in total non-life insurance sector. On the flip side, underwriting business of 11 insurance companies registered a decline of 3.2 per cent to Rs911million. While net premium increased by 10 per cent with a 46 per cent growth in miscellaneous sector at Rs1.3 billion.

Besides this, on the basis of net premium, motor business also witnessed an increase of 13 per cent to Rs6.56bn. Marine and fire insurance segment recorded a modest growth of one per cent and 0.4 per cent, respectively.
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