Programme Aims to Expand Coverage and Improve Financial Resilience
ISLAMABAD: The Asian Development Bank (ADB) has approved a $700 million policy-based loan to support the modernization of Pakistan’s insurance sector, expand insurance coverage, and strengthen financial protection against natural disasters, health emergencies, and economic shocks.
The funding will support the Insurance Transformation Program, a reform initiative designed to deepen insurance markets and improve resilience for households, businesses, farmers, and public institutions. According to the ADB, the programme will help reduce financial vulnerabilities, accelerate recovery after crises, and lessen the fiscal burden on the government following disasters.
ADB Country Director for Pakistan Emma Fan said the initiative would help transform the country’s insurance industry from a traditional rules-based system into a modern, risk-based, and market-oriented framework.
She added that the reforms would promote efficiency, strengthen financial stability, and create a more competitive environment for insurance providers.
Technology and Inclusion at the Centre of Reforms
Meanwhile, the programme will introduce modern tools and technologies aimed at improving access to insurance services across the country.
Key measures include the promotion of digital distribution platforms, satellite-based risk assessment systems, parametric insurance products, and risk-pooling mechanisms. These initiatives are expected to improve risk management and make insurance products more accessible and affordable.
The programme also focuses on developing specialized products tailored to the needs of women, farmers, and vulnerable communities who often face greater exposure to environmental and economic risks.
Sector Development Expected to Support Long-Term Growth
Furthermore, the ADB said the reforms would help mobilize long-term capital, support infrastructure financing, and encourage broader participation in the financial sector.
Pakistan’s insurance penetration currently stands at approximately 0.7 percent of gross domestic product, reflecting limited coverage compared with regional and international standards.
Officials believe the initiative will strengthen financial protection nationwide while supporting sustainable economic growth and improving the country’s capacity to respond to future crises and natural disasters.
