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CU see big life

business chances

in Pakistan

ISLAMABAD: Britain's Commercial Union Assurance Company plans to launch a new company in Pakistan to exploit what it sees as a growing life insurance business, its general manager said on Monday.

"We see tremendous potential in the life assurance business," Moin Fudda told Reuters by telephone from Karachi.

He said Pakistan only had 10 million policy holders out of a population of nearly 140 million, including seven million covered through group insurance provided by employers.

"We have only about three million individual policy holders, so based on that you can see the potential," he said.

Pakistan, where life insurance has largely been the preserve of state-owned and private local firms, began opening up the sector to foreigners in 1994, reversing the nationalisation of 1972 by then prime minister Zulfikar Ali Bhutto.

The present government, led by his daughter Benazir Bhutto, has ended the monopoly of the state-run State Life Corporation, allowing Commercial Union and American Life Insurance Company to operate.

Fudda said Commercial Union had received permission to float a new company, which would issue shares in May.

The new company, Commercial Union Life Assurance Pakistan (CULAP), is expected to be listed on the Karachi Stock Exchange in June and start writing new business from July 1, the beginning of the 1996/97 (July-June) fiscal year.

"Commercial Union believes that Pakistan has the potential to become one of the most prosperous countries in South Asia. To do so will require the mobilisation of savings. This can be achieved through development of the local life assurance market," a company statement said.

CULAP will be 51 percent owned by Commercial Union and will have a total paid up capital of 300 million rupees ($8.6 million) divided into 30 million 10-rupee shares.

Fudda will be its managing director as well as country chief for Commercial Union in Pakistan.-Reuter