Interview with Dr. Syed Arif Hussain — Insurance sector expert
[box type=”shadow” align=”” class=”” width=””]Profile:Â Dr. Syed Arif Hussain is serving Alpha Insurance Company Limited as General Manager Marketing and Compliance. His expertise comprise management, resource development, marketing and execution of business strategies.
His professional experience is spread over 24 years at progressive senior level positions and has the experience of underwriting, reinsurance, claims management and marketing with the State Life Insurance Corporation of Pakistan, Dawood Family Takaful Limited and as a Chief Executive Officer, he also headed Takaful Pakistan Limited a Non-Life Takaful Company and Excel Insurance Company Limited. He was Head of Takaful of East West Insurance Company Limited.
His expertise include Life, Health and project related Insurances/Takaful schemes. He has extensive experience in restructuring, insurance operations and automation. He has attended a number of Insurance/Takaful and management related workshops and conferences conducted locally and internationally.
About Alpha Insurance Company Limited:
Alpha Insurance Company Limited is a subsidiary of State Life Insurance Corporation of Pakistan registered in 1951 and to underwrite all classes of general insurance businesses. Our company has acquired IFS rating “A” by JCR-VIS. With the objective of providing and delivering the best the organization is operational all over the country. We are bonafide member of the Insurance Association of Pakistan. Our balance sheet reflects the financial soundness of the company with sizeable paid-up capital of Rs. 500 million, Equity 705 million.[/box]
PAGE: What is the current state of the insurance sector in Pakistan?
Dr. Syed Arif Hussain:Â The potential of insurance growth in Pakistan is too much in all areas of insurance classes because the penetration of insurance is negligible i.e. less than 0.9% of GDP as compared to the population of the country. As per result of 2018 the gross written premium of Life (Convention and Takaful) was Rs. 221 billion and Non-Life gross written premium of Life (Convention and Takaful) was Rs. 87 billion.
The insurance industry in Pakistan is relatively small. Despite the large population and potential, the insurance penetration and density are very modest. This is even more apparent when compared with other countries in the region. There may be a variety of reasons for this, but the key reason is the lack of awareness regarding the value proposition of insurance. With a large rural population and low literacy rate, this is a very difficult challenge the industry must recognize and address collectively.
The Pakistani insurance market has undergone major changes recently. In order to meet the increased statutory requirement of minimum paid up capital as per Insurance Ordinance 2000, many companies either closed down or merged with stronger players.
The Securities and Exchange Commission of Pakistan (SECP), Insurance Division has issued directives on financial security and transparency, code of good governance and sound market practice to improve the stability and image of the industry. These efforts combined with an uptick in the economy will open the doors to potential strong growth in the industry.
[ads1]
PAGE: How could the insurance sector tackle the problems arising in the wake of pandemic this year?
Dr. Syed Arif Hussain:Â The economic wheel stopped all over the world due to COVID-19 pandemic, which affected the insurance sector directly especially the non-life business because this business of insurance is the outcome of economy. As the business activities resume, the insurance business will get momentum.
It is the time for insurance sector to think out of box solutions and focus on the non-conventional/un-tapped market. To tap the huge market, injection of creative products is the need of the time; like crops coverage, livestock coverage, professional indemnity for engineers and doctors, micro-insurance, micro-health insurance and social health coverage.
PAGE: Could you tell us about the skilled workforce of the insurance sector of Pakistan?
Dr. Syed Arif Hussain:Â In larger scale we can divide the work force of insurance sector into (i) Back office and (ii) Front Office. Insurance companies have different programmes to improve the skills of their workforce. Most of the companies have their own training centers from, which they provide training to their both types of staff, however, some companies provide training through outsourcing. There are also technical certificate programmes like Actuarial Science, ACII and FLMI. These courses are for Life and Non-Life insurance companies. Moreover under Section 98 of the Insurance Ordinance 2000, it is obligatory to provide training to the agents of the insurance companies either in-house or through outsourcing. The famous institute in this regard is Pakistan Insurance Institute, which has been providing training since 1951.
PAGE: What must be the strategies of the insurance sector for next five years?Â
Dr. Syed Arif Hussain:Â The insurance industry should expect a large increase in demand from the large-scale infrastructure development projects and the resulting downstream new industrial development. The China Pakistan Economic Corridor (CPEC) between China and Pakistan will bring massive investments and trade to Pakistan.
The coming decade will be a very exciting time economically for Pakistan. The insurance industry must develop its expertise and particularly manpower to take advantage of this coming period.
The industry must expand its product plate and field force to attract and reach to all level of customers.
The industry has to use welfare or social security net, to reach the community level and the low income household staff to provide them protection and health facility.