ISLAMABAD: The Asian Development Bank (ADB) has approved a USD 700 million policy-based loan to support reforms aimed at modernizing Pakistan’s insurance sector and expanding financial protection for households, businesses and farmers.

The program seeks to increase insurance coverage, strengthen disaster risk financing and encourage greater private sector participation.

ADB said Pakistan’s insurance penetration remains low at 0.7 percent of GDP, leaving many people vulnerable to economic, health and climate-related shocks.

The reforms will promote digital insurance services, improve claims settlement and develop products tailored for women, farmers and vulnerable communities.

ADB Country Director for Pakistan Emma Fan stated that the initiative would help build a more competitive, inclusive and resilient insurance market while mobilizing long-term capital for development.