Islamabad: The International Monetary Fund (IMF) and the Asian Development Bank have proposed insurance cover to deal with losses due to climate change and natural disasters.

Sources in the Ministry of Finance say that Pakistan has become the fifth largest country affected by climate change and natural disasters in the world. Natural disasters including rains and floods cause losses worth billions of dollars in Pakistan every year.

According to officials, in the context of losses worth billions of rupees in Pakistan due to natural disasters, the IMF and ADB have proposed insurance cover. The IMF has emphasized on providing insurance cover to reduce losses due to natural disasters and demanded that insurance cover be provided for new development projects.

According to sources, government development projects are also not provided with insurance cover in relation to natural disasters. Pakistan faces huge losses almost every year due to natural disasters including floods.

The Asian Development Bank (ADB) has also stressed the need to provide insurance cover for natural disasters. The ADB is preparing a comprehensive plan for the development of the insurance sector.

According to sources, despite the development of the banking industry in Pakistan, the insurance sector is not up to world standards. The SECP’s insurance division is in dire need of experts. According to the SECP, only 7.9 million of Pakistan’s 240 million population have life insurance, while there is no public disaster risk insurance program available in the country.

Similarly, less than 1 million out of 8.2 million farmers have insurance. Only 3 million out of 32 million properties are insured. Pakistan lags far behind other countries in the region in insurance premiums.