Asian Development Bank (ADB) has recommended sweeping reforms in Pakistan’s insurance sector, highlighting the urgent need to implement social insurance programs for the poor and expand the sector’s role in economic stability.
According to an ADB report, the presence of insurance in the private sector remains limited, which poses a significant gap in the national economy.
The report emphasizes that insurance can play an effective role in risk financing for private projects and act as a critical financial safeguard during natural disasters.
The ADB has called on the government to take immediate steps to strengthen the insurance sector and improve the regulatory framework.
It noted that a large portion of the population lacks basic awareness about insurance, and group insurance models are more effective than individual plans.
The report also stresses the need to increase insurance premium rates and urges the government to mandate insurance coverage in the private sector
It also raises concerns over the country’s public pension system, stating that it lacks dedicated funding, thereby placing a burden on the national exchequer.
Additionally, the ADB recommends expanding the scope of the Employees’ Old-Age Benefits Institution (EOBI) and increasing pension benefits to provide broader social security coverage.
