FPCCI asks insurance industry to provide maximum relief to policyholders

Islamabad: Convener FPCCI Central Standing Committee on Insurance Dr. Murtaza Mughal has asked the insurance industry to provide maximum relief to policyholders amid the coronavirus crisis.

Insurance sector must not delay necessary adjustments and introduce new disaster mitigation measures amidst coronavirus pandemic to help those affected by the crisis, he said.

Dr. Murtaza Mughal said that the response of insurance sector to the crisis has left much to be desired but prolonged lockdown and is also to be blamed for the situation. He said that there were only a few pandemics in the past century but now the insurance sector can offer services based on the latest crisis model to mitigate the risks.

Without appropriate measures and a proper framework the pandemic risk can be unattractive for many insurers, therefore the regulator and Insurance Association of Pakistan should join hands to introduce new products, he said.

The disease outbreak has posed a serious risk to many countries including Pakistan requiring a study regarding the direct and indirect economic impact of the disaster, he said, adding that the insurance sector will not be able to respond properly in absence of dependable data.

He said that the government needs the ability to calculate the effects of the outbreak on the budget, the economy, and fiscal growth which will help it make informed decisions and establish a proper disaster financing mechanism.

Epidemic risk was something everyone is exposed to, but diversification of risk is very important. New and innovative products will be expensive, but as time passes and the product becomes more established, the market will automatically bring the price down.

He said that insurance plays a critical role in ensuring that people and businesses have the ability to mitigate unexpected financial shocks and preserve their assets and take productive risks.

However, the policymakers should recognise the broader role insurance can play in generating economic opportunities aimed at rapid national development.