ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has chalked out a comprehensive plan to enhance the role of insurance in disaster resilience and increase participation of provinces in insurance disaster schemes.
According to sources, the SECP has proposed that the role of provinces can be enhanced in funding of provincial level disaster schemes particularly in agriculture being a provincial subject.
In a presentation, the SECP has made several recommendations to enhance the role of insurance in disaster resilience and disaster insurance schemes.
The SECP stated that insurance is a federal subject allocated to the Ministry of Commerce under Rules of Business. Insurance related activities are under taken by provinces.
In 2018, a crop insurance scheme (the Punjab Fasal Beema Scheme) was launched by the province of Punjab whereas the Punjab and Sindh also funding Sehat Sahult Programme (Heath Insurance).
At the same time, Sindh Province established its own non life insurance company i.e.Sindh Insurance Company Limited.
Punjab province has also incorporated a life insurance company and submitted application for licensing.
The SECP has also emphasized the need to develop a national catastrophe risk model to support insurers in accurately pricing disaster risks. It suggested that improved data sharing among government institutions, insurers, and financial regulators would strengthen underwriting capacity and reduce uncertainty in claims management.
A detailed presentation further highlighted the need for Pakistan to expand the role of insurance and capital markets in managing disaster-related financial risks, stressing that stronger institutional coordination and wider insurance coverage are essential for improving national resilience.
The presentation provided an overview of Pakistan’s insurance sector structure, noting that the non-life segment plays a critical role in disaster risk coverage but remains underdeveloped compared to the country’s exposure to floods, earthquakes, and climate-related risks.
It emphasized that provincial governments have an important role in promoting disaster insurance through agriculture and public asset protection programs, particularly because disaster management and agricultural support functions are largely implemented at the provincial level.
Citing sector data compiled by the Securities and Exchange Commission of Pakistan (SECP), the presentation observed that while the insurance industry has shown gradual growth, overall penetration remains low compared to regional benchmarks.
Expanding risk coverage through innovative insurance products and capital market instruments was identified as a key priority.
According to the details, national-level agriculture insurance programs should be expanded using a public-private partnership model, with greater participation from insurers and financial institutions. The proposed framework includes forming a consortium of insurance companies that could later evolve into a national catastrophe insurance pool to spread large-scale disaster risks across the market.
The SECP also underlined the importance of insuring public infrastructure such as roads, government buildings, and energy assets to reduce fiscal pressure on the government after natural disasters. It suggested that mandatory catastrophe insurance for critical public assets could significantly lower post-disaster reconstruction costs.
In addition, the presentation highlighted international experience showing that disaster risk financing systems are more effective when insurance mechanisms are linked with social protection programs, including poverty reduction and food security initiatives. Such integration, it noted, can help ensure faster financial support for vulnerable populations after disasters.
The SECP has further recommended the use of modern technology in disaster-related insurance, including satellite-based crop assessment, digital claim systems, and improved access to national catastrophe risk models for insurers. These steps would enhance transparency and speed up compensation processes.
The SECP emphasized integrating disaster risk insurance with national social protection initiatives, including poverty reduction and food security programs, to ensure faster financial support for vulnerable populations affected by natural disasters.
Under the proposed National Disaster Risk Financing Strategy, the presentation recommended launching a national-level crop insurance scheme for both loanee and non-loanee farmers through a public-private partnership framework. It also suggested forming a consortium of insurance companies to underwrite the program and gradually expand it into a national catastrophe risk pool.
The document further proposed introducing mandatory catastrophe insurance for critical public sector assets and considering compulsory disaster insurance for homeowners living in high-risk areas to reduce the financial burden on the government after major disasters.
Copyright media, 2026
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