AGIC: Notes from Directors' Report Dec 2022
The general insurance industry in Pakistan has faced several challenges, including intense competition, high claim costs and economic instability.
The devaluation of the Pakistani rupee has also impacted the industry, as it has resulted in higher reinsurance costs for insurance companies. With reinsurers’ revenue and profitability declining in USD terms, Pakistan’s general insurance industry is losing ranks in reinsurer’s priorities.
During 2022, SBP raised the policy rate to 16%, to moderate the aggregate demand and control the rising Current Account Deficit (CAD). This has negatively affected the overall business activity and resultantly the insurance industry as well.
Motor segment shown a considerable growth in business, as a result, it became the highest contributor in overall business with gross premium written of Rs. 1291 million (2021: 1166 million).Business mix of this segment is 29% of total gross premium written in the year 2022.
Health segment was the second significant contributor towards the total underwritten premium. This segment secured business of Rs. 1063 million in the year 2022 (2021: Rs. 1095 million), which translated to a share of 24% (2021: 27%) of the total business portfolio.
Gross premium underwritten for this segment was Rs. 815 million in the year 2022 (2021: Rs. 624 million). This segment contributed 18% towards total gross premium of the Company in the year 2022 (2021: 16%).
Marine, Aviation & Transport: This segment contributed 8% to our total business underwritten in 2022 with gross premium underwritten of Rs. 371 million (2021: Rs. 277 million). This segment reported contribution of Rs. 85 million in the year 2022 (2021: Rs. 66 million).
Overall Investment and other income increased by 18% to Rs. 327 million in the year 2022, as compared to Rs. 277 million for the year 2021. Increase in investment and other income was majorly due to high policy rate and investment in fixed income securities during the year 2022.