The Asian Development Bank (ADB) has approved a $700 million loan to help Pakistan strengthen its insurance sector through major reforms aimed at expanding coverage and reducing protection gaps.
According to ADB, the Insurance Transformation Program will enhance financial resilience by developing insurance markets and increasing protection for households, businesses, farmers, and public finances against disasters, extreme weather events, and other life-cycle risks.
The reforms are expected to reduce financial vulnerabilities, support faster recovery from crises, and ease the burden on government finances following disasters.
ADB Country Director for Pakistan Emma Fan said the initiative will shift Pakistan’s insurance sector from a traditional rules-based framework to a modern, risk-based, and market-oriented system.
She added that the reforms would encourage long-term investment, improve financial protection, and create a more competitive and inclusive insurance market.
ADB highlighted that insurance penetration in Pakistan remains low at only 0.7% of GDP, leaving many people and businesses vulnerable to economic, health, and environmental shocks.
The program will promote inclusive insurance products, particularly for farmers, women, and vulnerable households, while supporting digital distribution, innovative risk assessment tools, faster claims settlement, and long-term savings through capital market and pension development.
