Balochistan's insurance sector: a promising economic asset.

• Position: Balochistan, Pakistan

Byline: Syed Fazl-E-Haider

Though Balochistan has vast potential in insurance sector, yet the sector could not play its due role in the local economy. Balochistan is the country's poorest province. Agriculture, the mainstay of local economy, employs 67 percent of province's total work force. The local work force and their dependents live in miserable socio-economic conditions. The insurance pay out can provide them some sort of monetary shield and lessen their sufferings to an extent. Insurance business generally grows on risk perception in a society. Larger the risk level, higher the growth of insurance industry.

The risk perception - risks to life, assets and public and private properties- has been higher and widely prevalent in Balochistan where the incidents of target killings and attacks on public and private properties have witnessed a phenomenal growth over the past five years. The reason is the poor law and order situation in the province, which is facing an insurgency-like situation. The other reasons include weak financial system, nominal industrial growth and inconsistent policies, which have so far hampered the growth of insurance industry in Balochistan.

Ship-breaking is the province's biggest industry at Gaddani with over 5,000 employees. The workers at the shipbreaking yard work in permanent danger. On board gasses cause fires and explosions. The incidents take place frequently due to fires and explosion, suffocation and inhaling CO2 and the steel plates and other material, which may hit the workers while falling off the ships. As a result of frequent accidents at the shipbreaking yard, many workers have lost their lives. The local work force should be offered a monetary safety in the shape of insurance pay out. Free life insurance benefit may be extended by the employer to the poor workers. In this regard, the premium cost should be borne by the employer. The amount of insurance in case of death, compensation or permanent disability should already be fixed by the employer in accordance with the intensity of the damage caused by the accident.

Balochistan has tremendous potential in all economic sectors. Banks can help exploit the potential opportunities of industrial development in fisheries, agriculture, livestock and other sectors of local economy. Overall, the provincial economy must perform well, as the performance of insurance industry is linked with the performance of the economy.

There are two major reasons behind...