"Pakistan Insurance Report Q2 2016" is now available at Fast Market Research

From: Fast Market Research, Inc.
Published: Thu Apr 14 2016

Pakistan remains the classic example of a market where insurance is well established among households and companies that understand it and that can afford it, but where most people remain uninsured. Solutions are provided overwhelmingly by highly resilient and long-established indigenous companies, some of which have the advantage that they are backed by the government. Aside from strong brands and multi-channel distribution, the leaders have access to the capital that they need. In the non-life segment, we anticipate that there will be a substantial consolidation of what remains a fragmented landscape. The four largest players, however, will gain market shares. For much of the forecast period, premiums in both segments should expand at low double-digit rates. Growth will come predominantly from provision of insurance solutions to existing users.

Key Updates And Forecasts

We estimate growth in life premiums of 9% in 2016. Nevertheless, the very strong growth in premiums of the private sector life insurers through the first nine months of 2015 indicates that the risks to our forecasts are to the upside for both 2015 and 2016. Over the course of the forecast period, we forecast premiums will rise by about 11% annually. The growth will come overwhelmingly from the provision of new products to existing users. Micro-insurance and family takaful should develop rapidly from low bases, but will not likely be of sufficient size to have an impact on the total premiums written in the segment prior to 2020.

Full Report Details at
- http://www.fastmr.com/prod/1132687_pakistan_insurance_report_q2.aspx?afid=302

In the non-life segment, the data from the trade association also suggests to us that our estimates of premium growth in 2015 (4%) may well be on the low side. The same may be true of our forecast for 2016 (currently 6%). For now, we anticipate that premiums will rise by 9-10% annually through the remainder of the forecast period. We believe that non-life penetration will slip gradually from the current (and low) level of about 0.27% of GDP. The growth in premiums will come substantially from the expansion in nominal GDP.

This quarter, we have substantially lowered our forecasts for the non-life segment. In Q116, for instance, we estimated total non-life premiums of PKR121bn in 2019. Now we are forecasting premiums of PKR96bn in 2019 and PKR106bn in 2020. There are two main reasons for this. One is that we think that price discounting in the motor vehicle insurance sub-sector will be more of a challenge than we had previously envisaged. The other is that we have lowered our expectations for take-up of health insurance by first-time users and of the impact of healthcare cost inflation.

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001

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