‘Coronavirus signifies importance of insurance’

By Asad Cheema

ISLAMABAD: The Pakistan Credit Rating Agency (PACRA) has maintained the IFS rating of the United Insurance Company (UIC).
A statement issued by PACRA said that UIC is one of the leading players in the insurance sector with a balanced portfolio and good profitability representing all segment of the insurance industry.
The company has good capability to absorb risks while it is striving for higher standards in various facets including efficiency and transparency and governance standards, PACRA said.
However, it said that the current economic meltdown may impact the business volumes of the industry, which are yet to be ascertained. Speaking on the development, Chairman of the United International Group Mian Shahid said that we have planned to generate liquidity through divestment of some stake as the generation of internal capital has become essential in the current scenario.
He said that the insurance industry plays an important part in national development while the pandemic has underlined its importance and now more people are taking interest in insurance for security of their families and business.
The losses linked to COVID-19 has amplified the importance of the role of the insurance sector in development, and in the economic resilience of businesses and individuals, he added.
Mian Shahid said that savings alone are not enough to achieve financial freedom, therefore, insurance of life and assets is equally important which need a sound, stable and developed insurance market. We work on the principle of transfer of the financial risk from the insured to the insurer which results in reducing the financial burden on the shoulder of a policyholder in case of an unforeseen event, he informed.
He further said that none of us can see the future or predetermine the future events and with insurance in place, any financial stress will be taken care of, and the policyholder can focus on other important things like recovery.
Policymakers and regulators have a key role to play in driving innovation in the untapped market, which would enable insurance providers to reach these customers and strengthen the resilience of their businesses and households.
There are some reports regarding inflexibility on the part of some insurance companies in its response to the pandemic which is a threat to the long-term partnerships with customers, he said.