ISLAMABAD – The International Monetary Fund (IMF) has advised Pakistan to strengthen insurance mechanisms to mitigate financial losses from natural disasters, finance ministry sources revealed on Tuesday.
Pakistan remains one of the most disaster-prone countries, losing billions of rupees annually to floods, earthquakes, and other calamities. However, the country’s insurance sector lags significantly behind global standards, limiting its ability to provide adequate coverage, despite having a strong banking sector, the sources added.
“Even government development projects are often left uninsured against disaster-related damages,” an official noted, highlighting a major gap in risk management. The IMF has recommended that insurance coverage be made mandatory for all new development schemes.
The Securities and Exchange Commission of Pakistan (SECP), which regulates the insurance sector, is also grappling with limited technical capacity and a shortage of experts in its insurance division, officials said.
The Asian Development Bank (ADB) has echoed similar concerns, urging Pakistan to prepare a comprehensive plan to expand disaster insurance coverage and protect public resources from recurring losses.
