Local insurance sector not yet mature enough to lure foreign investment: Nasir
Thursday, 25 September 2008
FE Report
Managing director of Green Delta Insurance Company Wednesday said the local insurance sector is not yet matured enough to attract foreign owned insurance entities in the country.
"This sector is not enough matured for attracting foreign investment," Nasir A Choudhury told the FE at a reception organised to mark his fifty-years in the country's insurance business.
The Green Delta accorded a reception to its top boss for his contribution in the country's insurance sector in a simple ceremony at its head office on the day.
Nasir joined the then Pakistan Insurance Corporation on September 24 in 1958, since then he has been serving in the profession with a brief interlude for a few months in mid 1980s.
Nasir A Choudhry said the government might invite foreign companies with limited share to do business in the country but must be handled 'carefully'.
"If the government wants joint venture, then the shares of the foreign owned companies should not exceed 25 per cent," he added.
He also said: "We will be able to attract foreign investment in the sector at least after another 10 years when our industry will be much mature."
He also said there is no necessity for any new company in the country as a good number of new generation insurance companies are incurring losses.
The Green Delta chief executive also said the loss-making new generation insurance companies might go for merger and acquisition.
The government approved in principle an ordinance to streamline the insurance sector. The ordinance might be promulgated shortly.
"We will soon be treated as trade bodies, I think our status will be recognised as non-banking financial institution after formation of a separate and independent regulatory body," he added.
Green Delta managing director also said the sufferings of the insurance companies will be reduced after formation of a regulatory body. "Now we have to approach a number of ministries to get a single job done," he added
Nasir expressed his grave concern over the existing re-insurance with the government owned company, which he said "contributed to thousands of unresolved claims."
He suggested that the mandatory reinsurance system applied in case of general insurance should be withdrawn.
Nasir said the country has scarcity of trained manpower for a market for general insurance worth Tk 10 billion.
"We really have few trained people in the industry. We need huge manpower for the sector to keep pace with the growth of the industry," Nasir added.
Nasir's Green Delta was established in December in 1985 and employed 475 officials at its 35 branches in the country.
The premium size of the general insurance company reached Tk 1.10 billion in 2007.
The general insurance company is eyeing for introducing crop insurance adding: "We want to cover the growing SME sector as well."
There are 60 insurance companies in the private sector since 1985. Of them, 43 general and remaining 17 are in life insurances.
Managing director of Green Delta Insurance Company Wednesday said the local insurance sector is not yet matured enough to attract foreign owned insurance entities in the country.
"This sector is not enough matured for attracting foreign investment," Nasir A Choudhury told the FE at a reception organised to mark his fifty-years in the country's insurance business.
The Green Delta accorded a reception to its top boss for his contribution in the country's insurance sector in a simple ceremony at its head office on the day.
Nasir joined the then Pakistan Insurance Corporation on September 24 in 1958, since then he has been serving in the profession with a brief interlude for a few months in mid 1980s.
Nasir A Choudhry said the government might invite foreign companies with limited share to do business in the country but must be handled 'carefully'.
"If the government wants joint venture, then the shares of the foreign owned companies should not exceed 25 per cent," he added.
He also said: "We will be able to attract foreign investment in the sector at least after another 10 years when our industry will be much mature."
He also said there is no necessity for any new company in the country as a good number of new generation insurance companies are incurring losses.
The Green Delta chief executive also said the loss-making new generation insurance companies might go for merger and acquisition.
The government approved in principle an ordinance to streamline the insurance sector. The ordinance might be promulgated shortly.
"We will soon be treated as trade bodies, I think our status will be recognised as non-banking financial institution after formation of a separate and independent regulatory body," he added.
Green Delta managing director also said the sufferings of the insurance companies will be reduced after formation of a regulatory body. "Now we have to approach a number of ministries to get a single job done," he added
Nasir expressed his grave concern over the existing re-insurance with the government owned company, which he said "contributed to thousands of unresolved claims."
He suggested that the mandatory reinsurance system applied in case of general insurance should be withdrawn.
Nasir said the country has scarcity of trained manpower for a market for general insurance worth Tk 10 billion.
"We really have few trained people in the industry. We need huge manpower for the sector to keep pace with the growth of the industry," Nasir added.
Nasir's Green Delta was established in December in 1985 and employed 475 officials at its 35 branches in the country.
The premium size of the general insurance company reached Tk 1.10 billion in 2007.
The general insurance company is eyeing for introducing crop insurance adding: "We want to cover the growing SME sector as well."
There are 60 insurance companies in the private sector since 1985. Of them, 43 general and remaining 17 are in life insurances.