For most Pakistanis, insurance remains a foreign concept — something distant, complicated, and often seen as unnecessary. But this disconnect comes at a cost.
With insurance penetration at just 0.87 per cent of GDP in 2022, covering a mere 3pc of the population, compared to a global average of around 6.7pc, millions of families across Pakistan remain one accident, illness, or disaster away from financial ruin. This is not just a statistic; it is a reflection of a massive protection gap that exposes society’s most vulnerable to life’s shocks without a safety net.
In comparison, regional peers, like China, have achieved insurance penetration rates of around 4pc of GDP, underscoring how far Pakistan lags behind. In 2022, Pakistan’s insurance density stood alarmingly low at just $14 (approximately Rs2,000).
According to the World Bank, nearly four in 10 Pakistanis live below the poverty line, surviving on less than Rs900 per day. In such a context, the absence of insurance doesn’t just affect financial security — it deepens inequality, perpetuates hardship, and makes economic resilience nearly impossible for vast segments of the population. Expanding access to insurance is not just a financial imperative; it is a social one.
InsurTech could open a viable route to greater insurance penetration by integrating protection into already existing digital routines
So why hasn’t insurance taken hold? The answers are complex but familiar: low financial literacy, cultural scepticism, religious perceptions, and legacy systems that rely on paper applications, in-person agents, and intimidating fine print.
For many, insurance feels less like a service and more like a bureaucratic burden. But this doesn’t have to be the case. Around the world, a quiet revolution is underway — and Pakistan is beginning to take notice.
InsurTech — short for insurance technology — is transforming the way people access financial protection. By using tools like artificial intelligence, big data, and mobile platforms, InsurTech is stripping away complexity, reducing costs, and bringing insurance to people through the devices they already use. For a country like Pakistan, with nearly 200 million mobile subscribers and an increasingly digital-savvy population, this shift presents an extraordinary opportunity to leapfrog past the old model and build something better.
We’ve seen this play out in other emerging economies. India’s insurance regulator has laid out a bold vision of “Insurance for All by 2047”, supporting tech platforms that make insurance simple, transparent, and widely available.
Moreover, Kenya’s mobile-based microinsurance systems have enabled its rural population to access affordable health coverage with just a few taps on a phone, contributing to an insurance penetration rate of 2.4pc as of December 2024. The African nation’s mobile phone penetration exceeds 100pc, enabling insurers to reach rural populations and urban slums alike. Such advancements signal a shift from a one-size-fits-all approach to personalised, tech-driven coverage.
These models work not because they demand behavioural change but because they integrate protection into already existing daily digital routines.
Pakistan is beginning to chart a similar path, with recent initiatives by fintech players sparking early momentum in digital insurance. For users unfamiliar with traditional insurance, this could be a far more approachable experience. Bundling insurance with everyday services — like mobile top-ups or utility payments — makes it even more intuitive and accessible, embedding protection into daily life.
However, even the most innovative technology cannot succeed in a vacuum. If Pakistan is to truly close its insurance gap, this digital momentum must be matched by public understanding, smart regulation, and cultural relevance.
Financial literacy campaigns are urgently needed to build awareness, particularly in rural areas. Regulators must modernise policies to enable innovation without compromising consumer protections. And to gain widespread trust, the industry must offer not only conventional products but also Sharia-compliant takaful options, especially in underserved regions.
This transformation will not come from any single player. It requires a coalition of regulators willing to experiment, insurers ready to adapt, fintechs eager to innovate, and telecom operators who can offer scale and reach. The goal is not just to digitise the old system but to reimagine it — to turn insurance from a luxury for the few into a lifeline for the many.
Done right, InsurTech can redefine financial protection in Pakistan. It can empower families to weather life’s storms with dignity. It can help communities recover faster, rebuild better, and plan further ahead. And ultimately, it can become a quiet but powerful force in Pakistan’s journey toward inclusive, resilient growth.
The potential is here. The technology exists. Now we must summon the will to act.
Kazim Mujtaba is President Consumer Division at Jazz
Published in Dawn, The Business and Finance Weekly, May 5th, 2025
