ISLAMABAD: Aamir Khan, Commissioner of Insurance at Securities and Exchange Commission of Pakistan (SECP), has emphasized the significance of adopting international reporting standards to modernize Pakistan’s insurance sector during his keynote speech at the Institute of Chartered Accountants of Pakistan (ICAP) seminar on IFRS 17 Implementation.
In a press statement, Khan stressed the need to adopt IFRS-17 by January 1, 2026, warning that any delay could cause Pakistan’s market to fall behind international standards. He highlighted the responsibility of stakeholders and SECP as regulators to implement IFRS-17 and emphasized the importance of understanding its impact on decision-making.
The seminar, attended by representatives from the Korean Accounting Standards Board, industry players, experts, consultants, and SECP policy department personnel, discussed how insurance, as an integral part of the financial sector, acts as a stabilizer against macroeconomic shocks and contributes to savings and capital formation.
Despite its potential for sustainable finance and long-term risk-taking, Pakistan’s insurance industry remains underdeveloped compared to its regional peers, representing less than 1% of GDP. With total assets at PKR 2.42 trillion (circa USD 10.5 billion) and written premiums at PKR 553 billion (c. USD 2.5 billion) as of 2022, the industry has significant untapped potential.
To address these challenges, SECP launched a 5-year Strategic Plan in December 2023, with one of its key priorities being the adoption of International Financial Reporting Standards and Risk-Based Capital regimes for the insurance sector to achieve financial stability.
IFRS 17 aims to enhance transparency and consistency in financial reporting in the insurance industry. Its adoption is expected to boost confidence among investors, regulators, policyholders, and other stakeholders by providing a transparent view of underwriting and investment activities on financial statements.
SECP anticipates that IFRS 17 will prompt insurers to review and potentially overhaul their business processes, driven by the need for more detailed financial reporting, changes in performance measurement, and opportunities for differentiation in a competitive market.
The SECP, in collaboration with ICAP, PSOA, and the insurance industry, has devised a four-phased approach for IFRS 17 implementation, with phase 3 – System Design and Methodology – currently underway. With many international markets already adopting the standard, meeting the January 1, 2026 deadline is crucial for SECP’s insurance policy team.
