For most Pakistanis, the concept of insurance remains unfamiliar — often perceived as distant, complicated, and unnecessary. This disconnect is not just a matter of perception; it carries real-world consequences. With insurance penetration standing at a mere 0.87% of GDP in 2022, and only 3% of the population covered, the vast majority of Pakistanis remain financially unprotected against unexpected events such as illness, accidents, or natural disasters. Compared to the global average of 6.7%, this figure highlights a critical protection gap that leaves millions vulnerable to financial ruin.
To put the disparity in perspective, regional counterparts such as China have insurance penetration rates nearing 4% of GDP, while Pakistan’s insurance density lags far behind at just $14 per person annually. This stark contrast underscores the urgency to expand access to financial safety nets — not merely as a fiscal necessity, but as a pressing social obligation. With nearly 40% of Pakistanis living below the poverty line, the lack of insurance contributes to a cycle of inequality and economic fragility, especially for low-income and rural populations.
At the heart of the problem lie several familiar challenges: low financial literacy, cultural skepticism, religious concerns, and outdated infrastructure reliant on paper-based processes and in-person agents. For many, interacting with insurance providers feels more like navigating bureaucracy than accessing a service designed to offer support and protection.
However, a promising solution is beginning to emerge. InsurTech — the fusion of insurance and technology — is redefining how financial protection is delivered. By leveraging mobile phones, artificial intelligence, and digital platforms, InsurTech is eliminating barriers, simplifying access, and reducing costs. In a country like Pakistan, with close to 200 million mobile subscribers, the potential for transformative change is immense.
Rather than asking people to adopt new habits, InsurTech solutions integrate insurance into familiar daily routines — such as topping up mobile credit or paying utility bills. This concept of “microdosing” insurance through everyday digital interactions helps demystify the process and bring it within reach of the masses. Small, affordable, need-based coverage becomes a reality when it is embedded into services people already use.
Global examples point to the power of this approach. In Kenya, mobile-based microinsurance allows users to purchase affordable health coverage through simple phone transactions. The country’s insurance penetration reached 2.4% by the end of 2024, aided by over 100% mobile phone penetration. In India, the regulatory vision of “Insurance for All by 2047” has galvanized the development of user-friendly, tech-enabled insurance platforms.
Pakistan is now beginning to tread a similar path. Local fintech companies are piloting microinsurance initiatives that bundle coverage with mobile and utility services. These efforts are lowering the barrier to entry for millions of previously uninsured citizens, particularly those operating in the informal economy or living in rural areas.
Yet, technology alone cannot bridge this gap. Achieving widespread insurance adoption requires a multi-stakeholder approach. Policymakers must create an enabling regulatory environment that balances innovation with consumer protection. Financial literacy campaigns — especially in rural and underserved areas — are essential to build understanding and trust. Moreover, offering Sharia-compliant takaful products can address religious concerns and encourage adoption across more conservative demographics.
The future of insurance in Pakistan lies not in replicating traditional models, but in reimagining them. With the right blend of regulatory support, private sector innovation, and public awareness, InsurTech can serve as a powerful equalizer. Telecom operators, fintech startups, insurers, and government bodies must collaborate to embed financial protection into the digital lives of ordinary Pakistanis.
By harnessing the potential of microinsurance through telecom and digital platforms, Pakistan has a unique opportunity to move from exclusion to empowerment. Done right, this transformation can equip families to better handle life’s uncertainties, promote resilience, and contribute to inclusive and sustainable economic growth.
