In Pakistan, disasters rarely come without warning, but recovery almost always comes without support.
From market fires to floods and building collapses, the country has seen repeated episodes of loss. Each time, there is public sympathy and short term relief, but little in the way of long term financial protection for those affected.
For small businesses, especially those operating in informal markets, a single incident can wipe out years of hard work. With limited savings and no institutional backing, many never fully recover.
It is this gap that Jubilee General Insurance is now attempting to address.
In an interview with Dawn News English, the company’s chief executive officer laid out a plan that could reshape how small and medium enterprises manage risk in Pakistan. The idea is straightforward. Offer affordable insurance to shopkeepers at around Rs400 to Rs500 per month, with quick payouts and minimal complications.
While the concept may sound ambitious, it is rooted in a stark reality. Pakistan’s insurance penetration remains among the lowest in the world.
Non life insurance penetration in Pakistan stands at less than 0.3 per cent of GDP. Globally, the figure is more than 7.5 per cent. This gap translates into a simple truth. Almost the entire population lacks financial protection against unexpected loss.
According to industry figures shared in the interview, insurance companies collectively underwrote around Rs650 billion in premiums in 2024 and paid out close to Rs600 billion in claims. Yet, most of these benefits go to large corporations rather than small businesses or individuals.
This imbalance has left the vast SME sector exposed.
“These events keep happening, but people have no system to fall back on,” the CEO noted, referring to recurring fires and natural disasters across major cities.
Traditional insurance products have struggled to reach small traders. Documentation requirements, valuation processes and lengthy claims procedures create barriers that many informal businesses cannot overcome.
Jubilee General’s proposed solution is to simplify the model.
Instead of detailed loss assessments, the product will rely on a parametric trigger based system. If a fire occurs in a covered market, the payout is activated. Once the event is confirmed, compensation is issued.
Shopkeepers can purchase coverage in fixed units, such as Rs500,000 or Rs1 million. Depending on the size of their business, they can buy one or multiple units.
The key promise is speed. The company aims to settle claims within 48 hours.
In a market where delays are common, this could be a defining feature.
The proposed pricing of Rs400 to Rs500 per month raises immediate questions about sustainability.
How can insurers offer large payouts at such low premiums?
The answer lies in numbers. Insurance depends on pooling risk across a large base. By covering thousands of shops across multiple cities, losses from individual incidents can be absorbed within a broader system.
The CEO emphasised that this is not about maximising profit in the short term. Instead, the focus is on expanding access and bringing new segments into the insurance ecosystem.
“If we continue the way we are, we will still have 98 per cent of people without protection,” he said.
Perhaps the biggest challenge is not financial but psychological.
Insurance in Pakistan suffers from a credibility problem. Many people are unsure whether claims will be honoured, and past experiences have not always inspired confidence.
Despite the industry paying out significant sums each year, these successes are not widely known.
Jubilee General believes the solution lies in demonstrating reliability rather than advertising it.
“The real product is the claim,” the CEO said. “If that works, everything else follows.”
A single well handled incident could shift perceptions more effectively than any marketing campaign.
Pakistan’s SME sector largely operates outside formal systems. Many businesses lack documentation, tax registration or standard accounting practices.
To navigate this, Jubilee General plans to work through market associations and trader groups. These collective bodies provide access to large clusters of businesses and reduce administrative complexity.
The company is also exploring digital solutions. Simple enrolment through mobile platforms, prepaid insurance cards and easy activation methods are part of the strategy.
The goal is to remove friction and make insurance as accessible as possible.
One notable feature of the plan is its focus on reducing risk.
A portion of the premium, around 5 to 10 per cent, will be allocated to improving safety within covered markets. This could include better electrical wiring, fire safety equipment and basic infrastructure upgrades.
In many cases, poor safety conditions contribute to the severity of disasters. Addressing these issues could lower overall risk while also benefiting shopkeepers directly.
Rather than simply compensating for loss, the approach aims to prevent it where possible.
Insurance is not a routine expense for most Pakistanis. It does not feature in everyday financial planning, especially for small traders managing tight margins.
There are also cultural factors at play. Many people rely on faith and personal networks rather than formal financial tools.
The challenge is to position insurance as a practical necessity rather than an optional cost.
At Rs400 to Rs500 per month, the product is designed to be within reach for most shopkeepers. The task now is to convince them of its value.
If successful, this initiative could have wider implications.
Access to insurance can improve a business’s ability to secure financing, invest in growth and withstand shocks. It can also bring more enterprises into the formal financial system.
For the insurance industry, it represents an opportunity to move beyond its traditional client base and engage with a much larger segment of the economy.
Jubilee General Insurance has begun engaging with market associations in cities including Karachi, Lahore, Islamabad and Multan. The current phase involves gathering feedback and refining the product before a broader rollout.
The response so far has been cautiously positive, though questions remain around implementation and scale.
Ultimately, the success of the initiative will depend on execution.
When the next major incident occurs, will claims be paid quickly and without dispute?
If the answer is yes, the model could gain momentum across the country. If not, it risks reinforcing the very doubts it seeks to overcome.
For Pakistan’s SMEs, the stakes are significant. In a landscape where risk is constant and support is limited, even a modest safety net could make a meaningful difference.
Whether this effort delivers on its promise is something only time, and the next crisis, will reveal.
This content is produced in paid partnership with Jubilee General Insurance.
