1 General Insurance Sector There are active 31 Private and 1 Public Insurance Company. 63% of the general Insurance market share is with the top three.

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1 General Insurance Sector There are active 31 Private and 1 Public Insurance Company. 63% of the general Insurance market share is with the top three companies. As of May 31, 2008, 11 companies have been ceased due to Capital and Solvency requirements, while the winding up of 10 companies is in process. License to 1 insurance company and 1 broker is under consideration. Considering the small revenue base of the sector, effective steps should be taken to promote mergers and acquisitions. Slide 2 2 General Insurance Sector Current Growth & Penetration 1988-2008 The insurance industry continues to show sluggish growth every year. The insurance penetration remains 0.7% of the GDP, which is one of the lowest in the world. Unlike the more developed markets, only B2B selling is prevalent which has become expensive and has begun to erode profits and reserves. Slide 3 3 Recent & Emerging Scenario Insurance Sector grew by only 6% in 2008. Profit margins will shrink further due to the impact of globalization and maturing markets. The market has witnessed introduction of new products like health, crop, livestock. New distribution channels such as Bancassurance, Websales & Telesales have emerged. General Insurance Sector Slide 4 4 Slide 5 5 Slide 6 6 Slide 7 7 Market Share State Life enjoys a clear monopoly with 65% of market share but its market share is eroding rapidly.State Life enjoys a clear monopoly with 65% of market share but its market share is eroding rapidly. Top 3 life insurers (including State Life) are holding 96% of the market share.Top 3 life insurers (including State Life) are holding 96% of the market share. Market Share of 2 Family Takaful operators is merely 0.38%.Market Share of 2 Family Takaful operators is merely 0.38%. Life Insurance Sector Slide 8 8 Average Growth Rate : Life industry: 23% Public Sector: 18% Pvt. Sector: 37% To date there are 9 entities registered as Life Insurers including 2 Family Takaful Co. and 1 Health Insurance Company. Slide 9 9 Slide 10 10 Slide 11 11 Slide 12 12 Slide 13 13 Our Vision To promote the orderly development of a financially strong and transparent insurance industry, thereby increasing the insurance penetration in Pakistan Slide 14 14 Insurance Ordinance 2000 Although the Insurance Ordinance addresses major aspects of Insurance business, yet it lacks the depth prevalent in legislations of other countries. Major emphasis has been on compliance. However, more proactive Regulators have demonstrated a strategic balance between market development & regulation. Broad financial indicators are defined, but a specific framework for an Early warning system is not available. There are no information standards for the Industry for Risk appraisal, forecasting & sharing of critical information. Slide 15 15 Role of the Regulator To increase our involvement due to the failure of the Free Market model. To act not only as a Regulator but mainly as a Facilitator. Prevent frauds & abuses from becoming systemic so that they do not consume the market. To formulate policies and development strategies which increase the Insurance penetration in Pakistan. Encourage healthy competition and implement International best practices. Slide 16 16 Strategic Roadmap Organize internally Automate our processes Develop more positive relations with the Insurance Industry. Develop contacts & cooperation with International Regulatory Organizations. Respond in Real Time to emergency cases with the help of Early Warning tools. Formulate a data sharing mechanism for actuarial risk calculation & development of Rating Models. 2009