The Securities and Exchange Commission of Pakistan (SECP) has released a landmark report titled “Insurance as a Tool of Social Security: Landscape of Pakistan,” aiming to reshape the country’s approach to social protection by leveraging insurance as a key policy instrument. The report offers a comprehensive analysis of Pakistan’s existing social security framework and presents a clear roadmap for reform, especially focused on enhancing inclusion, enforcement, and coverage for all sectors of society.
By benchmarking Pakistan’s current insurance and social protection system against global best practices, the report reveals significant structural and operational gaps. It identifies critical shortfalls in the legal and regulatory environment, limited integration between insurance and existing social safety nets, and the near-absence of coverage for informal sector workers—who make up a vast majority of Pakistan’s labor force.
According to SECP, while Pakistan’s labor laws mandate group insurance for employees in commercial and industrial entities with 20 or more workers, actual implementation falls dramatically short. Of the country’s estimated 72 million workers, only about 9.5 million are covered under any form of employment-related insurance. This stark figure underscores a pressing need to not only expand legal protections but also to improve enforcement mechanisms and drive financial inclusion through targeted reforms.
The report is also closely aligned with Pakistan’s constitutional commitment to the right of social security for all citizens. In light of this, SECP outlines a five-pillar roadmap aimed at transforming insurance from a private financial product into a core component of the national social protection agenda. These pillars include strengthening the legal framework governing insurance, integrating insurance schemes with existing social safety nets, improving enforcement through the use of real-time, data-driven regulatory tools, launching a national insurance scheme tailored for informal sector workers, and introducing standardized, affordable, and accessible insurance products for widespread adoption.
The inclusion of informal sector workers, who are often left out of formal systems of protection, is central to the SECP’s reform strategy. A national insurance scheme dedicated to this demographic could offer coverage against occupational hazards, illness, disability, and other life risks, bringing millions under the umbrella of basic social protection for the first time.
Additionally, the SECP emphasizes the role of technology and digital tools in scaling up enforcement and transparency. By adopting data-centric regulatory models, authorities can monitor compliance in real time and flag discrepancies across industries, ultimately ensuring more consistent implementation of insurance mandates.
The report not only serves as a policy blueprint but also as a call to action for stakeholders across the public and private sectors. Financial institutions, insurers, government agencies, and development partners are all urged to collaborate in realizing the transformative vision laid out by the SECP.
As Pakistan grapples with rising economic vulnerability and a growing need for social protection, this flagship report positions insurance as a scalable, sustainable solution that can build resilience, particularly among the country’s most underserved populations.
