- Reshaping Pakistan’s insurance frontier Bancasslurance empowering families, expanding reach, and redefining financial security
- NBP introduces a range of meticulously crafted insurance products designed to safeguarding, savings and investment needs
Interview with Mr. Adnan Ahmed – Wing Head Bancassurance & Wealth Management, NBP
Profile
Adnan Ahmed is an MBA and M.Phil. in Human Resource Management (HRM). He serves as a visiting faculty member in universities. He joined National Bank of Pakistan (NBP) as an officer in 1996 and has more than 28 years diversified experience. He served as a Branch Manager and remained on key posts at controlling and head officer. NBP started Bancassurance in 2016. He is a pioneer to launch Bancassurance business. NBP is the only bank in banking industry that entered billionaire club very next year i.e. 2018 and procured Rs1.2 billion in premium as fresh Banca Business. NBP is the only bank in insurance industry which has achieved the highest 2nd & 3rd year persistency more than 88% and 93% respectively.
Adnan Ahmed is currently working as Wing Head-Banca & Wealth Management-RBG and is a key asset of NBP.
PAGE: What is the role of Bancassurance in the banking industry of Pakistan?
Adnan Ahmed:Â The insurance industry in Pakistan is relatively small as compared to its peers in the region. The insurance penetration and density has remained very modest as compared to other countries. However, the situation has been improving over the last 5 years and the insurance industry, especially life insurance has shown marvelous growth. This growth can be attributed to the change in perception of life insurance which is now being perceived as security for prosperous future in the event of some unfortunate occasion.
Bancassurance has enhanced the insurance industry in Pakistan in terms of increased market penetration by being able to access millions of bank’s customers. The impressive growth of the last few years is due to aggressive expansion of distribution channels, especially Bancassurance which now comprises of a significant portion of the business of most private sector players.
There is a general dearth of information for prospective life insurance policy holders to use it as an investment instrument. The education of prospective insurance consumers would result in a rise in the demand for insurance products. Another way is through Bancassurance, which is an ingenious way of using the outreach of banks to sell insurance products. In this method, a bank and an insurance company mutually agree to use a bank’s distributive channels or branches to sell insurance products in collaboration with an insurance company. This agreement is mutually beneficial; for the bank, this provides another avenue for generating profits, whereas, the insurance company benefits from the bank’s established distribution channels.
PAGE: Do you think Bancassurance could be leveraged for non-residents in Pakistan?
Adnan Ahmed:Â Migrant workers commonly use remittances to support their families; after going abroad for more promising work opportunities, they send some of their earnings home. Families who are dependent on remittances from family members abroad are generally in a position of higher risk, and insurance is well suited to reducing the risk of lower-income families. Bancassurance seeks to bring insurance products to a market segment that cannot afford or access traditional forms of insurance. Presently, there are few insurance products available that are specifically tailored to meet the needs of remittance-dependent families. The insurance products would not only expand insurance penetration among low-income families but also target the needs of a population heavily involved in remittance transactions.
PAGE: Kindly shed some light on NBP’s role in insurance sector of Pakistan?
Adnan Ahmed:Â Being one of the largest commercial banks in Pakistan, National Bank of Pakistan (NBP) has a network of over 1500+ domestic branches across Pakistan, including areas where no other bank operates (added advantage), and major business operations spanning over 19 countries. NBP brings following exclusively and explicitly designed products that cater to the protection, savings and investment needs of NBP customers.
- Secure Future Plan-EFU
- Education and Marriage Plan-EFU
- Saving and Retirement Plan-EFU
- Accelerated Saving Plan-EFU
- Takaful Saving Plan-EFU
- Takaful Marriage and Education Plan-EFU
- Khidmat Education and Marriage Plan-AL
- Pasbaan Protection Plan-AL
- Zamanat Savings Plan-AL
- Bharosa Plan-JLI
- Batchat Plan-JLI
- Mayanaz Plan-JLI
- Takaful Mustahkam Plan-JLI
- Takaful Rahbur Plan-JLI
- Endowment Plan-SLIC
- Sada Bahar Plan-SLIC
- Three Payment Plan-SLIC
PAGE: How do you think insurance could play its part in disaster management keeping in view the threat of climate change for Pakistan?
Adnan Ahmed:Â Broadly, there are two main channels through which the insurance sector can help the economic and social development of a country: first, by reducing uncertainty, and secondly, by generating long-term financial resources. A well-functioning insurance sector facilitates the investment decision-making process and enables businesses to continue operating even if catastrophic events (such as earthquake, floods, and severe weather conditions, etc) hit the economy. The latter, in turn, provides some protection to households by reducing probability of job and income losses.
A developed and healthy insurance industry also protects households from any major financial losses resulting from idiosyncratic shocks such as fires, thefts, illness, accident and death, etc.