The recent findings from the “Status of Third-Party Motor Insurance in Pakistan” report by the Securities & Exchange Commission of Pakistan (SECP) have brought to light a surprising statistic. Out of the total 3 crore registered vehicles in Pakistan, only a meager 2.77 percent, which translates to around 8.3 lakh vehicles, are insured.

In comparison to countries like India, Saudi Arabia, Bangladesh, Sri Lanka, and Uganda, Pakistan lags significantly behind in terms of the proportion of insured vehicles. These revelations underline the concerning state of vehicle insurance in the country.

The study classifies the total of 3 crore registered vehicles into two main categories: 2.3 crore motorcycles and 70 lakh motor cars. Moreover, the report pinpoints a minuscule count of 12,557 vehicles as possessing motor third-party (MTP) insurance, with 9 lakh vehicles holding comprehensive motor insurance.

The key differentiation between MTP and comprehensive insurance lies in the extent of coverage they offer. While MTP safeguards you against damages and losses to third parties, comprehensive car insurance extends its protection to cover your own damages as well.

Chief Operating Officer at Jubilee General Insurance and ex-Chairman of the Insurance Association of Pakistan

Chief Operating Officer at Jubilee General Insurance and ex-Chairman of the Insurance Association of Pakistan Arshad Azfar stated, “Motor insurance forms the cornerstone of overall insurance penetration because almost 50% of global insurance penetration is attributable to motor”.

“In regions where motor penetration is higher, overall insurance penetration is also elevated — and that is a disheartening reflection in the case of Pakistan,” he added.

Arshad clarified, “The issue in Pakistan is not really an issue per se. In most countries where motor insurance penetration is exceptionally high, the reason for that is because it is a legal requirement”.

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