Digital Revolution | InsurTech Potential for Pakistan
2020 Global FinTech Index
The 2020 Global FinTech Index highlights the rise of non-traditional finance and financial hubs. This report ranked 65 countries and over 230 cities based on FinTech activity. The USA ranks first, followed by Europe and Asia Pacific. India ranks 15th, China 21st, and Pakistan 62nd in FinTech penetration. With Africa and MENA regions having large unbanked populations, there is immense potential for digital financial services.
FinTech’s Role in the Finance Sector
Digital advancements are reducing operational costs and improving service delivery. By 2025, digital client interactions will dominate financial services. Smart devices, mobile banking, and blockchain technology are revolutionizing the finance industry.
InsurTech: Transforming the Insurance Industry
Insurance technology (InsurTech) is reshaping the sector by enhancing risk assessment and claims management. Big data, AI, and blockchain are pivotal in underwriting and policyholder risk valuation. However, blockchain adoption in insurance is still in its early stages.
Global Technology Trends
By 2025, 75 billion IoT devices will be in use worldwide. Drone services are projected to reach $63.6 billion, highlighting the role of AI and automation in financial and insurance services.
Pakistan’s ICT Adoption and Insurance Penetration
Pakistan ranks low in ICT adoption but has significant potential. With insurance penetration at only 1% of GDP, digital innovation can drive growth. Major insurers like Adamjee, EFU, and Jubilee Insurance are leveraging technology for marketing, underwriting, and claims processing.
InsurTech for Unserved Markets
With 97% of Pakistanis being Muslim and 80 million living below the poverty line, InsurTech can expand through Islamic micro-takaful. The youth, women, and rural populations offer untapped opportunities for financial inclusion.
Mobile and Internet Growth in Pakistan
Pakistan had 76.38 million internet users and 164.9 million mobile connections by 2020. The introduction of 5G in 2022-23 will further accelerate digital transformation in the financial sector.
Rise of E-commerce and Digital Payments
The COVID-19 pandemic boosted e-commerce and mobile payments by 300-400%. Pakistan’s inclusion in Amazon’s sellers list creates new opportunities for SMEs and youth entrepreneurs.
Pakistan’s Digital Future
The government’s Digital Pakistan Policy aims to develop FinTech innovation centers and regulatory sandboxes. Pakistan has the potential to become a key player in the global InsurTech market.
