Islamabad: A new report by the Asian Development Bank (ADB) has highlighted the weak performance of the insurance sector in Pakistan and has suggested important policy and regulatory reforms to the government.
According to the report, the role of insurance can be decisive in the context of natural disasters and financial risks; however, the use of insurance at the private level in Pakistan is very limited. The bank stressed that the government should play a key role in implementing mandatory insurance coverage in the private sector.
In the field of social security, the report says that the government needs to introduce social insurance schemes for the poor. Encouraging group insurance models instead of individual ones can help in the development of the insurance sector.
The report specifically identifies pension schemes for government employees as attractive, but the funding mechanism is unclear, which is increasing the burden on the national exchequer.
The EOBI scheme has also been described as ineffective, and the need to expand its scope has been emphasized so that more workers can access social security.
