Insurance essential for strong economy, social welfare: Mian Shahid

Lahore: Current concept and practice of the insurance has hindered growth of this sector that can indeed lay foundation of a welfare society.  Problem is with the methodology; and not the concept itself. Takaful is the way that can unleash vastly untapped potential of insurance which is basically a collective risk bearing.

Mian M A Shahid, who is guru of insurance field taking a modest company to a group of multinational presence, gave insights and emphasized that Takaful windows ought to be opened in all insurance concerns on the pattern of Islamic banking windows working in almost all commercial banking companies.

He said image and credibility are primary traits in economic undertakings; and that can be achieved by designing insurance products in line with Islamic tenets. It would greatly boost image and social acceptability of insurance professionals.

Corporate social responsibility (CSR) is another area which ensures that “haves” must share and contribute towards the society.  Citing his experience, he said, we designed CSR practices with full involvement of our employees; and it paid dividends to all – society at large, customers, employees and the company. It is a win-win for all, so why not promote it willingly and happily, he asked.

Chairman of the United International Group (UIG) Mian Shahid has said that insurance has become an essential element which provides security to people and businesses hence strengthening economy and the society.

Insurance industry has a very positive impact on almost all sectors of society and economy and that there will be no real growth or development unless the insurance industry is strong and well-regulated, he said.

Mian Shahid said that over the years, his struggle has transformed UIG into a conglomerate which comprises of United Insurance Company (UIC), Apna Microfinance Bank, SPI Insurance, United Track System, Tawasul Insurance Services Abu Dhabi and others.

The group is growing sustainably expanding nationally and internationally with a fast pace playing its role in the development for which we are grateful to our dedicated staff.

He said that he prefers to invest in insurance and microfinance sectors which he believes are the major movers of the economy that need dynamism, partnership and empowerment.

The insurance veteran noted that Pakistan’s economy has been witnessing growth since few months but we have yet to mobilise private sector on the desired pace, providing enabling environment, and frame policies to attract local as well as direct foreign investment to the right sectors of the economy, he said.

Mian Shahid, who is also CEO of SPI (formerly Saudi Pak Insurance) said that insurance and microfinance is the only means by which we can alleviate poverty, empower the poor, and try to give them a decent level of living, especially the unbanked population who have no access to the credit by commercial banks.He said that we continue to design products and services which are affordable for the man on the street and meet their needs.

To a question about reason behind buying a microfinance bank, Mian Shahid said that Pakistan’s market is largely untapped with lots of potential to penetrate in the middle and lower income sections of the society to meet their demands which help them grow.

Pakistani Microfinance Banks are working at good pace which has improved the competition among them but banks with innovative services and fast penetration will make a difference not only in their market but in their business too, he said.

Microfinance banks are increasing while offering different models and expanding ecosystem but the successes will depend on faster penetration, confidence of customers and its facilitation level, he added.

Our society is underdeveloped and many people remain underprivileged but we should provide opportunities to energize them so that they become economical strong and socially independent.

Under the chairmanship of Mian Shahid, Apna Microfinance Bank is now working in different sectors and we have become strong enough to enhance our footprint to cater a wide range of customers, he said.

Encouraged by low default rate in Akhuwat model, our team worked to increase the number of borrowers, reduce the time to process loans and step in the agriculture sector, SMEs, health and commodities, he informed.

The main issue of borrowing funds for farmers and small traders is unavailability of documentation which is a mandatory condition that makes the process slow but ultimately benefits the customers.

To another query about upgraded rating by a credit rating agency, Mian Shahid said that PACRA recently reviewed the performance of our member company –United Insurance and gave it A+ IFS rating which denotes strong capacity to meet policyholder and contract obligations.

PACRA observed that the risk factors are moderate, and the impact of any adverse business and economic factors is expected to be small. The rating reflects UIC’s strong risk absorption capacity emanating from a robust financial base that adequately supports the company’s high growth stance.

The rating was dependent on management’s ability to successfully execute its business strategy of diversification and growth, while preserving underwriting profitability.

In nutshell, Mian Shahid concluded, teamwork is the key. Happy, satisfied and motivated workforce can do the miracles. We are example at hand growing from mere Rs 120 million annual premium to Rs 2 billion.