The insurance industry in Pakistan is holding consultations to reassess underwriting policies, review reinsurance arrangements and ensure insurers maintain adequate solvency levels, according to Mr Mohammad Raza, Non-Life Committee and Property Committee member of the Insurance Association of Pakistan (IAP).
The consultations are carried out in the wake of the hostilities in the Middle East.
The cancellation of war-risk coverage for ships by foreign insurance companies in the Gulf region is expected to have “limited direct financial impact” on insurers in Pakistan, reported the newspaper Dawn.
However, the Middle East war may create operational and business challenges for the marine insurance sector. Mr Raza suggested that Pakistan could explore setting up a reinsurance company that could provide temporary support for essential maritime trade and energy shipments.
According to Mr Saquib Zeeshan, CEO of Pak-Qatar General Takaful, Pakistani insurers rely heavily on international reinsurance and retakaful markets. When these reinsurers withdraw or restrict war-risk capacity, domestic insurers must also suspend or cancel such coverage extensions.
The IAP is expected to play a coordinating role in handling the situation. The association generally works closely with the Securities and Exchange Commission of Pakistan (SECP) to monitor industry exposure, engage with international reinsurers, and ensure financial stability within the sector.
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