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Demands for strengthening of insurance field in Afghanistan

in Afghan Business

Demands for strengthening of insurance field in Afghanistan

insurance afgCurrently, a limited number of insurance companies are active in Afghanistan. Since these companies have failed to win people’s trust, they have failed to insure bigger businesses. A number of traders from the private sector and common people say that the existing insurance companies lack the capacity and capability for providing insurance services.

According to them, it is due to the above reasons that Afghan businessmen are hesitant to insure their businesses.

If insurance field is not fortified in Afghanistan, Afghan business will transfer their capital outside of Afghanistan, according to Abdul Ghafar Dawi, an Afghan businessman.

“Unfortunately, Afghanistan lacks vast insurance companies, which is an evidence of the fact that insurance field is disregarded in the country,” says Mr. Dawi.

According to the reports, there exists one governmental insurance company with representatives in Nangarhar, Herat, and Mazar-e-Sharif. However, people think the company does not have significant activities.

In addition to the state insurance company, there are private insurance companies as well that are currently active in the country; however, the owners of these companies refused to be interviewed. In contrary to other countries, Afghanistan’s people are not aware of insurance system and its services. Furthermore, the culture of insurance is less common in the country.

“I know about insurance but I have never bought insurance. No one in Afghanistan trusts insurance companies. Anyone who is smart will not trust insurance companies, since the insurance companies take our money and invest it outside of Afghanistan” says an Afghan citizen in Kabul.

“My name is Khuda Bakhsh and I have been exposed to insurance outside of Afghanistan. Afghan insurance companies do not meet the standard international needs; therefore, people do not trust them. If someone pays the premium monthly, they know that the insurance company will not support them.”

Meanwhile, Rohullah Ahmadzai, responsible for enterprise development in Afghanistan Investment Support Agency, says that one of the major defects in attracting private investment in Afghanistan is the absence of an insurance system.

“A proper insurance system is a necessary tool for the growth of private investment, which unfortunately has not been implemented since the past decade. Investors should be insured against risks so that they are encouraged to increase their investment,” says Mr. Ahmadzai.

Afghan National Insurance Company, in consideration of the problems of the people and traders, says that they are trying their best to provide the right field for insurance to the people of Afghanistan. Daud Mohmand, head of the National Insurance Company, says that a major problem is the lack of awareness about the field of insurance among common people, as a result of which insurance companies are not trusted.

More than 90% of Afghans are not insured. Those insured are usually from governmental or non-governmental organs, where the employees are required to be insured.

According to Mr. Daud’s statement, the National Insurance Company will establish a branch of their insurance in Kandahar province as well in the near future.

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