KARACHI: Federal Insurance Ombudsman Raeesuddin Paracha has said trust is a crucial element in the growth of insurance business, and the institution of insurance ombudsman not only resolves financial disputes, but also creates an ambiance of trust between companies and customers.
“Establishment of the Federal Insurance Ombudsman can help create awareness among policy holders that a federally administered institution is there to safeguard their earnings in case of any mishap,” Paracha said on Saturday.
The ombudsman, who was addressing a seminar organised jointly by the Express Media Group and the Federal Insurance Ombudsman, said a better understanding of the policy holders’ trust in the insurance companies’ policies can lead to even more awareness about insurance in the country.
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“There is a massive room for improvement in the banking insurance as the list of complaints has been growing in the Federal Insurance Ombudsman’s complaint department.
“The bank insurance sales agents make false claims to their customers about doubling their investment in a period of 10 years, which can lead to financial disputes,” he added.
He said the Federal Insurance Ombudsman is trying to get the cooperation of banking insurance on board. Not even 1% of people in the country read the terms and conditions of their insurance policies, hence they are not fully aware of all their rights and responsibilities, he added.
According to Paracha, the Federal Insurance Ombudsman deals with a complaint within 60 days and the complainant can file his complaint without hiring a lawyer or spending a hefty fee.
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“The ombudsman decides 90% of the complaints in a single hearing. And this swift dealing and decision-making process is the key to Federal Insurance Ombudsman’s success,” he said.
The percentage of appeals against the ombudsman’s verdicts is 1.5% to 2%. The secret of ombudsman’s success could be measured by the fact that around 30 disputes were settled with mutual agreement of parties last year, he added.
Zahid Burki, the head of Jubilee Insurance, also addressed the seminar and said the growth rate of the current insurance industry is 13%, with life insurance witnessing 23% growth and non-life insurance 8%.
“In 2016, the gross rate premium was Rs256 billion, in which life insurance was Rs180 billion and non-life insurance Rs85 billion. At the moment, there are nine companies in the life insurance sector, in which one is owned by the government and six by the private sector. The other two are family takaful companies.”
In the non-life insurance sector 41 companies are operating. Out of these companies, one is owned by government, 35 by the private sector while three are general takaful companies, according to Burki.
“In 2016, the ratio of insurance against the GDP was 0.91%, which was 0.67% in 2012. During this time, the life insurance has grown from 0.37% to 0.62% and non-life insurance has fallen barely from 0.30% to 0.29%,” he added.
Federal Insurance Ombudsman’s Director Genral Naeem Siqqidi, Express Media Group’s Executive Director Azfar Nizami and Daily Express Senior News Editor Hassan Abbas also addressed the seminar.