Microinsurance needs for Pakistan’s socioeconomic development

The claim to health is an economic, social and cultural right to which all individuals are entitled. A right to minimum universal standard of health includes access to timely, acceptable and affordable health care of appropriate quality. Pakistan is far from providing this right to millions of its residents, especially people living in rural and far-flung areas.

With ever-growing income inequalities in the country, thousands in Pakistan live a life of uncertainty where the illness of a single family member, or an unforeseen disaster, can push the entire household into an endless cycle of debt and repayment. A report launched in 2016 by the Ministry of Planning, Development and Reform details that nearly 39 percent of Pakistanis live in multidimensional poverty. In 2015, Pakistan signed off the Sustainable Development Goals (SDGs) framed on the bedrock of human rights, inclusivity and justice including goals focusing on improving healthcare by 2030. The unfortunate reality is that except Afghanistan, Pakistan has one of the lowest ranking health indicators compared to other countries in this region.

Community-based financing arrangements are useful tools in economic development and aim to help poor families by offering insurance plans tailored according to their needs. Often offered in developing countries, these community-based financing arrangements work best where the current insurance markets are inefficient or non-existent. The coverage benefit is lower than a usual insurance plan, therefore, poor people pay considerably low premiums.

Sohail Fakhar, Head of Corporate Business and Microinsurance, Jubilee Life Insurance said that “community-based financing options are attracting interest from insurance companies across the world as it can really make a difference by including people living below the poverty line. Even in Pakistan, with a huge uninsured population, this phenomenon can assist in reaching out to a potentially large market and that is our goal through this arrangement.”

The major community-based financing arrangements that currently exist in Pakistan is being offered through Benazir Income Support Program (BISP).

Other policies are provided in conjunction with Microcredit and Micro Health Insurance services offered by various microfinance institutions (MFIs), microfinance banks, NGOs and rural support programs. These are not sufficient to reach disadvantaged population of the country, especially in non-urban areas.

Private organizations find it hard to reach regions that are far-flung and less developed. These are the regions that direly need these social initiatives. In a first of its kind collaboration, Jubilee Life Insurance (JLI) has partnered with the Government of Gilgit Baltistan. Under this arrangement, JLI is offering community-based health insurance facilities as part of its social initiative in Gilgit district of Gilgit-Baltistan region. This scheme is being funded by a German government owned development bank known as KfW.

This development bank is also funding health schemes in four districts of KPK, as part of their CSR Program.

Gilgit-Baltistan, formerly known as the Northern Areas, is the northernmost administrative territory in Pakistan. Covering an area of over 72,971 square km, Gilgit-Baltistan is highly mountainous and 43 percent of its population suffers multidimensional poverty. Population in the Gilgit district is spread-out in hilly terrain where reach to union councils located in the outskirts of this district is time consuming & quite difficult. Medical facilities are inaccessible to majority of the residents unless they travel to the central city of Gilgit.

Most of villagers do not travel to receive medical attention unless their situation is dire, due to time & financial constraints.

Jubilee Life Insurance, a subsidiary of the Aga Khan Fund for Economic Development (AKFED) and one of Pakistan’s leading private insurance companies, has collaborated with Department of Health, Government of Gilgit-Balitistan to offer health insurance products, under Social Health Protection Initiative to the ultra-poor population identified through BISP data. Jubilee Life has been involved in offering community based Health Insurance schemes to poor community of Gilgit-Baltistan since 2007.

Health insurance is a rapidly expanding business in Pakistan. By offering various health plans, Jubilee Life Insurance is expanding the range of financial services available to families in Gilgit-Baltistan which had previously been excluded from such schemes.

“For the first time in Pakistan, the Government; run DHQ hospital and City hospital in Gilgit have been added to an insurance company’s panel. This was done with the help of Department of Health, Gilgit- Baltistan.

It’s has been 1 year since the program was started and I’m happy to share that it is doing extremely well. We are strengthening public & private hospitals of that region to run this scheme in a successful manner. High-quality medical services are been provided at these hospitals and I am optimistic that these facilities will become self-sustaining in the future,” said Farhan Umer, Program Head-Social Initiatives, Jubilee Life Insurance.

“In Pakistan, generally, there isn’t enough awareness about insurance and its importance. Insurance is supposed to provide protection and an avenue for investment. Majority of Pakistani working class are being insured by employers. It is extremely important to prepare for the future and be ready for any mishap with regards to life’s unpredictability,” said Umar.

It is important that Government bodies and insurance companies collaborate and work together to ensure that this health based social initiatives expand within the country and reach people who need it most.

As there are many areas in Pakistan where private hospitals are not available, therefore, maximum number of people be reached through government hospitals for success of low premium health insurance schemes.

The writer is a communication professional