National Insurance Corporation was established in 1976 with an initial paid up capital of Rs. 5 million for the sole purpose of insuring public properties. This included properties owned by the government, autonomous bodies and organizations in which the Government of Pakistan had controlling financial interest.
The National Insurance Corporation conducted its business on commercial principles similar to private insurance companies transacting general insurance business. The Corporation made considerable efforts to develop economical premium rates for various types of insurance covers generally needed by the public sector organizations. A major objective of the Corporation was to reduce the outflow of foreign exchange in the form of reinsurance premium. The Corporation was successful in curtailing dependence on reinsurance from foreign companies from approximately 80% in 1976 to less than 10% in 1998 (except in case of Aviation Hull and Marine Hull).
Evolution of the Company.
The National Insurance Corporation has been converted into National Insurance Company Limited with effect from January 2001 to operate under the Insurance Ordinance 2000. National Insurance Company Limited was incorporated on 31st March and took over National Insurance Corporation with effect from January 01, 2002. The Government’s decision to convert it from a Corporation into a limited company was based on the fact that the National Insurance Corporation had, over the years, developed a very strong financial base. A Company could make a more efficient use of this strength. NICL has a paid up capital of Rs 2 billion as compared to NIC which had a paid up capital of Rs 5 million. The change in stature from a statutory corporation to a corporate body is aimed at running this organization on purely commercial lines. NICL has the potential to function like a multinational company and emerge as a role model for the insurance industry of Pakistan.
The Government has appointed a new Board of Directors, comprising of highly successful individuals from different walks of life. The management is actively considering and studying the legal implications of entering into the reinsurance market in competition with the International Reinsurers.