Billions of rupees are lost each year in Pakistan due to floods, earthquakes, and other natural hazards, yet most government development projects lack any insurance protection. Global lenders are now calling on Islamabad to act before more damage is done.
According to officials, the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have urged the government to strengthen its insurance sector to reduce economic vulnerability.
Pakistan is considered among the five most disaster-prone nations worldwide. With extreme weather events increasing, these incidents continue to put pressure on the economy and hinder long-term development.
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Finance Ministry sources said the IMF has stressed that all new projects should include insurance coverage to prevent massive financial losses. Meanwhile, the ADB has expressed interest in expanding the sector and is reportedly developing a comprehensive plan to support reforms.
Despite having a mature banking system, Pakistan’s insurance market remains weak and fails to meet global standards. The Securities and Exchange Commission of Pakistan (SECP), the regulator, faces resource and expertise shortages that are slowing down changes.