ISLAMABAD, Aug 4 (APP): President Dr Arif Alvi has urged the insurance industry to expand the scope of its products to include all sectors of the economy including agriculture, transportation, health, trade and commerce by providing insurance coverage to life, health, business, moveable and immovable properties.
He also called upon the insurance industry to timely settle insurance claims of the people, besides adopting modern risk assessment techniques through the use of emerging technologies like Artificial Intelligence, Block Chain Computing and Data Analytics.
The President expressed these views while addressing a seminar on the “Importance of awareness and technology in the insurance industry”, organized by the Federal Insurance Ombudsman (FIO), at Aiwan-e-Sadr, today.
Addressing the seminar, the President said that the contribution of the insurance sector to Pakistan’s GDP is 0.8% which is very low and needed to be brought at par with developed countries which was about 2% of the GDP. He urged the insurance sector to conduct a comprehensive survey and study to discover the reasons behind the low rate of insurance coverage in Pakistan and in the light of the findings improve their products and customer care to expand their outreach.
He stressed the need for expanding the insurance network by taking meaningful and effective measures to build trust and confidence between the insurance companies and their clients through measures such as better customer care, timely settlement of insurance claims and adopting time-bound measures for dispute resolution and addressing the customers’ complaints and grievance without resorting to lengthy litigation process.
He said that misleading advertising and eager selling of insurance policies by the bank staff to customers was a source of discomfort for the bank customers which needed to be addressed amicably through a consultative process among the stakeholders.
The President stressed the need to create awareness among the people through conventional media and social media to educate and motivate the general public on the long and short-term benefits of insurance coverage. He added that expanded insurance coverage will benefit the policyholders, give a boost to the insurance industry and help in the country’s growth and development.
He emphasized that Takaful which was a useful Islamic compliant insurance product offered by certain banks remained underutilized and there was a need to launch a well-thought-out awareness campaign by knitting in the support of religious scholars for its effective marketing.
He said that the Alternate Dispute Resolution mechanism adopted by the FIO was proving fruitful as it created reconciliation and understanding among the parties and did not result in appeal and review representations, thus, reducing the burden on the justice system.
He further remarked that cases could now be settled in 45-60 days without the need for lengthy litigation. He expressed satisfaction that the FIO had provided monetary relief worth over Rs 2 billion to the complainants.
The President also highlighted the need to increase the number of complaints received by the five Ombudspersons, including the Banking Mohtasib, FIO, Wafaqi Mohtasib, Federal Ombudsperson Secretariat for Protection against Harassment, and the Federal Tax Ombudsman by motivating the aggrieved persons through effective awareness campaigns to lodge complaints before them, without fear and intimidation, personally or through digital communication means so that maximum aggrieved persons could seek redressal of their complaints and grievances.
He appreciated that Pakistani society had a concept of community insurance which was working well in many parts of the country, adding that in case of loss by any individual, the entire community contributed monetarily in covering his losses and shared burden collectively. He said that Pakistani people possessed a philanthropic spirit and this spirit needed to be formally channelized.
Earlier the Federal Insurance Ombudsman Dr Muhammad Khawar Jameel briefed the audience on the performance of the FIO. He said the FIO has changed its strategy on the advice of the President from prosecution to persuasion which had born fruit as insurance disputes were now being resolved through mutually agreed upon solutions reached between the insurance providers and policyholders.
As a result, most of the cases are resolved with finality within 60 days and none of the decisions in such cases necessitated any appeal or review representations, he added. He further said that the success of this approach can be gauged from the fact that in 2019 total relief provided by the FIO had reached over Rs. 2 billion each in the years 2020 and 2021.
