IMF suggests insurance cover for losses in natural calamities

ISLAMABAD: The International Monetary Fund (IMF) has asked the government to boost insurance coverage to reduce losses in natural calamities, finance ministry sources here said.

Pakistan is most vulnerable to natural disasters and suffers billions of rupees losses each year due to calamitous flooding, earthquakes and other natural disasters.

The country’s insurance industry has been much behind to the international standards, despite a robust banking sector, which restricts it to cover disaster losses, sources said.

“Even the development projects of the government remain uninsured for losses caused by natural disasters,” sources said.

The IMF has demanded mandatory insurance cover for all new development projects, sources said.

Billions of resources are lost annually to natural calamities, without the insurance cover.

The Securities and Exchange Commission of Pakistan (SECP), which oversees insurance regulation, facing capacity constraints. The SECP’s insurance division needs direly needs technical experts, sources said.

Finance ministry sources said that the Asian Development Bank (ADB) has also urged for expanding insurance cover for natural calamities and working over a comprehensive plan.