Introduction:

Property insurance is defined as that provide either property protection coverage or

liability coverage for property owners. Insurance is the financial protection of property
against damage or theft. In most insured properties, if a person is hurt on a property other
than the owner or renter, appropriate care is financed by the insurer. Property insurance
provides financial protection against untimely catastrophes like floods, earthquakes, and
man-made or natural fires.

Understanding Property Insurance:

Property insurance covers several events like theft, vandalism, flood damage, earthquake,
maintenance damage, and sewer backup. The insurers are also bound to cover damage to
a property caused by theft and other crimes. A lack of property insurance can financially
expose the owners and the renters of property to all sorts of risks. Property/real
estate/home insurance companies are heavily mistrusted in Pakistan. As the insurance
market evolves, several insurance companies are entering the real estate sector in
Pakistan. To understand property insurance in full, one needs to know the financial
protection provided by most insurance companies.

Policy Selection:
We are accruing Jubilee General Home Insurance due to the vast operating network,
providing the best rates and easy claim process in the whole country.

Property Insurance in Pakistan:

The insurance industry is primarily misunderstood by its customers. Without any surprise,
Pakistan has in the South Asian region. According to the Association of Pakistan (IAP)
report, the gross premiums are not worth more than 0.9% of the Gross Domestic Product
(GDP). A regional comparison of Pakistan’s insurance industry shows how the country lags
in this industry. In India, total insurance coverage stands at 3.76% of the GDP, Vietnam at
2.24% of the GDP, and globally the industry is responsible for 7.2% of the GDP. In Pakistan,
State Life Insurance Corporation is one of the biggest property insurance providers, with
more than 50 high-rise commercial properties and plots under its belt in different cities of
Pakistan.
Industrial Description:
Insurance in Pakistan is regulated under the Insurance Ordinance, 2000. It is divided into
three components: life insurance, general insurance and health insurance. The
Government of Pakistan established the Department of Insurance in April 1948 as a
department of the Ministry of Commerce; the aim of this department is to take care of
affairs related to the insurance industry. Out of the 54% that Pakistan's service sector
contributes to the national GDP, insurance, along with transport, storage, communications
and finance occupy 24% of the sector.
The insurance industry in Pakistan is relatively small compared to its peers in the region.
The insurance penetration and density remained very modest as compared to other
jurisdictions while the insurance sector remained underdeveloped relative to its potential.
The Pakistani insurance market has undergone major structural changes in last few years
through mergers of companies to meet the increased statutory requirement of minimum
paid up capital as per Insurance Ordinance 2000. Some companies who were unable to
raise this capital have been asked to close down their operations. The Security and
Exchange Commission of Pakistan (SECP), Insurance Division, is trying to improve the
image of Pakistan Insurance Industry by issuing directives on financial security and
transparency, code of good governance and sound market practice.
As an industry, insurance is regarded as a slow-growing, safe sector for investors. This
perception is not as strong as it was in the 1970s and 1980s, but it is still generally true
when compared to other financial sectors.
Insurance companies are classified as either stock or mutual depending on the ownership
structure of the organization. There are also some exceptions, such as Blue Cross Blue
Shield and fraternal groups which have yet a different structure. Still, stock and mutual
companies are by far the most prevalent ways that insurance companies organize
themselves.
Worldwide, mutual insurance companies accounted for 26.7% of the market share in
2017. In the U.S., 39.9% of the market belonged to mutual insurers.1
A stock insurance company is a corporation owned by its stockholders or shareholders,
and its objective is to make a profit for them. Policyholders do not directly share in the
profits or losses of the company. To operate as a stock corporation, an insurer must have a
minimum of capital and surplus on hand before receiving approval from state regulators.
Other requirements must also be met if the company's shares are publicly traded. Some
well-known American stock insurers include Allstate, MetLife, and Prudential.
A mutual insurance company is a corporation owned exclusively by the policyholders who
are "contractual creditors" with a right to vote on the board of directors. Generally,
companies are managed and assets (insurance reserves, surplus, contingency funds,
dividends) are held for the benefit and protection of the policyholders and their
beneficiaries.
Management and the board of directors determine what amount of operating income is
paid out each year as a dividend to the policyholders. While not guaranteed, there are
companies that have paid a dividend every year, even in difficult economic times. Large
mutual insurers in the U.S. include Northwestern Mutual, Guardian, Penn Mutual, and
Mutual of Omaha.