Mr Qureshi, can you tell us about the insurance industry in Pakistan, and the history of Asia Insurance?
Mr Qureshi: Asia Insurance Company Limited (“Asia”) is an insurance company, which offers a wide range of insurance products. It was established in 1979, commencing business in 1980, and is listed on Pakistan Stock Exchange. Asia’s mission is to provide excellent services by way of best risk management and hassle-free settlement of claims through a nation-wide network of branches managed by a sound, dynamic team, ensuring good governance.
The insurance industry in Pakistan is relatively small compared to its peers in the region. The penetration and density is very modest at less than 1%, while the sector remains underdeveloped relative to its potential. The Pakistani insurance market has undergone major structural changes in last few years following a number of mergers which took place in response to changes in minimum capital requirements following the Insurance Ordinance 2000. Some companies who were unable to raise this capital have closed their operations.
Historically, a relatively poor business environment and stringent government regulations which do not encourage the insurance industry, combined with a large rural population and low income and literacy rates have resulted in a population which either does not understand the importance of insurance or cannot afford it. Among the private sector insurance companies of Pakistan, almost 75% of market is held by three major players, with the remaining 25% split between more than 20 companies. Insurers have attempted to launch new products such as crop, livestock, travel and other retail products in their portfolio but profitable diversification remains a challenge for most general insurance firms due to lack of uptake.
What is Asia Insurance’s main target group?
Mr Qureshi: Asia’s main target group has been small and medium sized companies, but we are now preparing a raft of products aimed at individuals and families.
What differentiates Asia Insurance from competitors?
Mr Qureshi: Asia is one of the fastest growing insurance companies in Pakistan. Seven years ago the premium underwritten by the company was just Rs. 53 million, but this has increased to Rs. 564 million in the last year. It is the only non-life insurance company which is providing such a wide range of general insurance projects. Its team is made up of professionals who possess relevant expertise and are market and results oriented, with a focus on competition, achievement, and “getting the job done.” There is a team-based culture with high levels of employee participation on all levels, and this healthy corporate culture make it unique among its competitors.
We have introduced innovative products, expanding into other markets. An example of this is a recent pilot project named Weather Index Insurance Product (WIIP) on Wheat & Cotton which is under process and is introduced first time in Pakistan.
The company was recognized by the President of Pakistan in 2015 for excellent insurance services, during the fourth achievement award ceremony of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI).
How are BlueOrchard and the InsuResilience Investment Fund helping your growth?
Mr Qureshi: The InsuResilience Investment Fund took a 25.4% stake in Asia Insurance in 2017, bringing Rs. 350 million of foreign investment into Pakistan.
Most notably, this investment allowed us to develop our business into the niche agriculture insurance market and develop technical expertise in this field. This meant that we could introduce parametric agricultural insurance at a micro level, allowing us to meet the previously unaddressed needs of local smallholder farmers. We also plan to launch a pilot for testing two weather index based insurance products for wheat and cotton crops in the upcoming sowing seasons for these crops in late 2019 and mid-2020.
What are your next milestones in terms of growth? And what is your vision for the company for the next years in terms of size and impact?
Mr Qureshi: We are aiming to reach Rs. 1 billion of paid up capital within the next 3 years, while growing our top line. The key drivers of growth will continue to be micro-insurance products in agriculture, health and some other areas, as well as moving into new delivery channels.
Thank you, Mr Qureshi, for answering our questions.