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                                Takaful
 
                Opportunities & Challenges
 
                  for the Pakistani Market
 
                                  Azeem Pirani
 
                  Head of Marketing & Alternate Distribution
 
                          Pak-Qatar Family Takaful
 
11th August 2007      August 11th, 2007 – Avari Hotel, Lahore 1
 
  
Agenda
 
          Takaful – A product and an ideology
 
          Differences between Takaful & Insurance
 
          The Pakistani Market
 
                Overview
 
                Challenges
 
                Opportunities
 
          Our responsibility
 
          Conclusion
 
11th August 2007                                  2
 
  
Takaful- A product and an Ideology
 
      Takaful comes from the Arabic root-word ‘kafala’-
 
      guarantee
 
      Takaful is not only a tool to mitigate loss or to make
 
      halal profits. It is an ideology which promotes
 
            Solidarity and joint guarantee
 
            Self reliance and self sustainability for community
 
            well being
 
            Assistance to those that need it
 
            Community pooling system
 
11th August 2007                                                3
 
  
Differences between
+
== Top 20 FREQUENT WORDS ==
Takaful & Insurance
+
takaful 41
      What is Insurance?
+
business 15
            A tool for Risk Mitigation and Financial
+
insurance 13
            Protection
+
islamic 11
            A tool to enable people to save (Life Insurance)
+
companies 8
      Key differences between Takaful and Insurance are:
+
mudarabah 7
            Risk Sharing Vs. Risk Transfer
+
pakistan 7
            Wakeel Vs. Guarantor
+
countries 6
            Ameen Vs. Owner
+
losses 6
            Different type of Contract
+
participants 6
11th August 2007                                              4
+
policyholders 6
 +
based 5
 +
contract 5
 +
funds 5
 +
investment 5
 +
loss 5
 +
model 5
 +
shariah 5
 +
banking 4
 +
basis 4
 +
concept 4
 +
contributions 4
 +
conventional 4
 +
expenses 4
 +
fee 4
 +
financial 4
 +
models 4
 +
principle 4
 +
profit 4
 +
wakalah 4
  
Differences between
 
Takaful & Insurance (cont.)
 
Issue            Conventional          Takaful
 
                Insurance
 
Basis            Risk Transfer        Co-operative risk sharing
 
Laws            Secular/Regulations  Shariah & Prudential
 
                                      regulations
 
Ownership        Shareholders          Participants
 
Mgmt status      Company Management    Operator
 
Form of Contract Contract of Sale      Cooperative, Wakala or
 
                                      Mudarbah with Tabar’ru
 
                                      (contributions)
 
Investments      Interest based        Shariah compliant
 
Surplus          Shareholders’ account Participants’ account
 
  
The Pakistani Market –
 
An Overview
 
      Pakistan - Overall
 
            Population: 6th amongst global nations. 166 m.
 
            Population in 2015: Still 6th . 193 m.
 
            Urbanization: Presently at 33%
 
            Urbanization by 2015: 39%
 
            GDP Per Capita: $753
 
11th August 2007                                            6
 
  
The Pakistani Market –
+
== DOCUMENT KEY POINTS ==
An Overview (cont)
+
*the contemporary jurists acknowledge that the foundation of shared responsibility or takaful was laid down in the system of a aaqilah which was an arrangement of mutual help or indemnification customary in some tribes at the time of the holy prophet pbuh
      Pakistan – Insurance Market
+
*notwithstanding the belief of all muslims in qadha o qadr islam provides that one must find ways and means to avoid such catastrophes and disasters wherever possible and to minimize his or his family s financial losses should such events occur
            Penetration of Insurance
 
                Pakistan: 0.7% of GDP
 
                India: more than 3% of GDP
 
                Iran: approx. 1% of GDP
 
            Family & General Companies
 
            Few Innovative Products. Very recent change in
 
            this area
 
11th August 2007                                            7
 
  
The Pakistani Market –
+
*the legal framework in other islamic countries normally does not allow this arrangement and takaful companies work as separate entities on the basis of mudarabah as in malaysia and on the basis of wakalah as in the middle east region
Challenges for Takaful
+
*how much of the contribution is meant for mortality liability and how much for investment account is based on a sound technical basis of mortality tables and other actuarial requirements
      Resistance to Insurance, and its benefits, due to
 
      different reasons
 
            Conservative spending habits
 
            Ignorance of its benefits
 
            Products which do not meet buyers needs
 
            Religious reasons
 
                Tawakkul issue
 
                    “Tie your camel first, then put your trust in Allah (SWT)”.
 
                    <Tirmidhi>
 
                    “It is better for you to leave your heirs wealthy rather
 
                    than poor and asking others for their needs”.
 
                Non-Shariah compliant elements
 
11th August 2007                                                              8
 
  
The Pakistani Market –
+
*as reported in the press pak kuwait investment corporation has recently been allowed by the sec to establish a takaful company in pakistan under the name of first takaful insurance company limited with authorized capital of rs million
Challenges for Takaful (cont.)
+
*takaful products are available to meet the needs of all sectors of the economy both at individual as well as corporate levels to cater for short and long term financial needs of various groups of the society
      Government regulations untested
 
      Human resources for the sector
 
            Shortage of trained human resources in insurance
 
            Negligible knowledge of Takaful present amongst
 
            the public
 
            Few training programs available for Takaful and
 
            insurance
 
            Insurance has generally never been the
 
            occupation of first choice for new graduates
 
11th August 2007                                              9
 
  
The Pakistani Market –
 
Challenges for Takaful (cont.)
 
      Education and Awareness
 
            Lack of knowledge about Takaful and insurance
 
            amongst the masses
 
            Ignorance of Takaful amongst the ulema
 
            Significant budget required just to ensure that
 
            knowledge permeates to all segments/levels of society
 
      Marketing & Sales issues
 
            Poor impression of insurance sales persons amongst
 
            the public
 
            Generally poor ethical standards amongst insurance
 
            sales persons
 
            General lack of faith on insurance companies meeting
 
            their obligation in a efficient and polite manner
 
11th August 2007                                                  10
 
  
The Pakistani Market –
+
''Please note, This is an auto generated summary based on sentances position in the document and other factors''
Challenges for Takaful (cont.)
+
== DOCUMENT WORD ANALYSIS ==
      Operational Issues
+
=== Main Category ===
            Limited avenues for revenue at Takaful co. as
+
: AlHuda Material\takaful
            compared to insurance ones
 
            To be competitive Takaful co. will need to use effective
 
            IT systems – heavy investments
 
            New Takaful co. will need to ensure that they do
 
            prudent underwriting; thus eating into the possibility
 
            of having a larger number of customers
 
11th August 2007                                                    11
 
  
The Pakistani Market –
 
Opportunities for Takaful
 
    Economic/Social conditions in Pakistan make
 
    Takaful a NECESSITY
 
            Lack of govt. social safety net
 
            Negligible provision of reliable health care
 
            by the govt.
 
            Quality education is beyond the reach of the
 
            average citizen and the institutions provided
 
            by the govt. lack the required standards
 
11th August 2007                                          12
 
  
The Pakistani Market –
+
=== KeyWords ===
Opportunities for Takaful (cont.)
+
taka islam insur malaysia productdeferred shariah countries muslim financial retakaful model growth custom partner developed service mutual bankable provided scheme
    Strong growth in the Islamic financial sector
 
    provides Takaful with a natural market
 
            Islamic Banks and mutual funds will need Takaful to
 
            package with their other products
 
            Islamic Financial institutions presently have no
 
            Family coverage for their staff
 
    Massive untapped market in Pakistan for risk
 
    mitigation tools
 
            Given the necessity of these tools insurance has not
 
            even touched the surface
 
            Given the ‘plain vanilla’ menu provided to customers
 
            there is a great opportunity for innovation
 
11th August 2007                                                  13
 
  
The Pakistani Market –
 
Opportunities for Takaful (cont.)
 
    Ethical and Shariah compliant model for risk
 
    mitigation and financial protection
 
            Large number of people who stay away from
 
            insurance due to religious beliefs
 
            Large number of our population can be
 
            considered as ‘religious’ and so Takaful will be in
 
            line with their beliefs
 
            Educated citizens, although not religious would
 
            prefer to use an ethical model than one which is
 
            built on making profits by trying to avoid having
 
            to pay claims
 
11th August 2007                                                14
 
  
Takaful –
 
What should you do about it?
 
    As educated professionals WE have a responsibility
 
    to our fellow citizens to guide them to what is good
 
    for them. This is especially important when the
 
    people are living at a level where income equals
 
    expenses
 
            Convey the critical nature of financial protection to
 
            others
 
            Explain the benefits of getting financial protection
 
            Introduce the new concept which is not only ethical
 
            but also Shariah compliant
 
    Just start from those around you….
 
11th August 2007                                                  15
 
  
Conclusion
+
== RELATED DOCUMENTS ==
    Takaful is not only here to stay; it’s going to GROW!
+
:[[A Review of Takaful by Prof. Khawaja Ahmed Saeed]]
    It’s ethical and Shariah compliant nature allows
+
:[[Agency Management,Training and Incentive Programme]]
    Takaful to overcome the inherent problems with
+
:[[Audit Issue of Islamic Banking]]
    Insurance
+
:[[Banca Takaful by Faisal Shahzad Abbassi]]
    The Pakistani market has challenges but also has a
+
:[[Best Practices from e- Insurance to e-Takaful by Sami Guello]]
    lot of opportunities
+
:[[Calculated Risks, Measurable Results]]
    There are a lot of opportunities for Takaful operators
+
:[[Challenges & Issues Faced by Takaful Industry by Mr. Imtiaz ]]
    to make healthy profits in Pakistan
+
:[[Co-Operative Insurance and Takaful]]
    Although Insurance coverage is not the norm in
+
:[[Current Achievements of Takaful by Dr. S. J Malaikah]]
    Pakistan we need to work to make Takaful
+
:[[International Cooperative & Mutual Insurance Federation]]
    something everybody uses
+
:[[Islamic Banking And Finance Malaysia’s Experience And Achiev]]
11th August 2007                                            16
+
:[[Islamic Finance & Investment Symposium by Sohail Jaffar]]
 +
:[[Islamic Insurance in 21st Century by Ahmad Feizal]]
 +
:[[Islamic Insurance Opertunities and Challenges]]
 +
:[[Issues and Challenges in Retakaful by Azman Ismail]]
 +
:[[Leveraging BancaTakaful as a Key Growth Channel by Mr. Rohai]]
 +
:[[Life Family Takaful by Mr. P Ahmed]]
 +
:[[Micro Insurance Co-Operative and Takaful]]
 +
:[[Micro Takaful by Shabir Patal]]
 +
:[[Microinsurance and Takaful]]
 +
:[[Microinsurance, cooperatives and Takaful]]
 +
:[[MicroTakaful – the way forward by Capt. M. Jamil Akhtar]]
 +
:[[Opertunities in Islamic Insurance]]
 +
:[[Present Scenario and Future Potentials of Takaful by Kazi Md]]
 +
:[[ReTakaful by Rohail Ali Khan]]
 +
:[[Syariah Compliant General Takaful Products by Sami Guellouz]]
 +
:[[Takaful and Mutuality by Mohd. Masua Billah]]
 +
:[[Takaful by Abdul Rahim]]
 +
:[[Takaful for Microfinance]]
 +
:[[Takaful Opperunities and Challenges By Azeem Pirani]]
 +
:[[Takaful Products Family Takaful Linked Investment Plans by S]]
 +
:[[Takaful World Prospective Middle East & North Africa]]
 +
:[[Takaful]]
 +
:[[Takful - Zubair Mughal]]
 +
:[[Takful Report]]
 +
:[[The Islamic Vision Presentation]]
 +
:[[The Success of Retakaful by Farid Benbouzid]]
  
Conclusion (cont.)
 
11th August 2007  17
 
  
Jazak-Allah khair
+
 
For further information contact:
+
== DOCUMENT REFERENCES ==
      (021) 438-0357 to 61
+
 
      info@pakqatar.com.pk
+
 
      www.pakqatar.com.pk  (launching soon!)
+
=== Number of Pages ===
11th August 2007                            18
+
3
 +
 
 +
 
 +
=== Published Date ===
 +
2003-12-10 13:22:03
 +
 
 +
 
 +
== Full Document ==
 +
 
 +
 
 +
[https://www.hodhood.com/en/HodHoodDocuments/IslamicFinance/Takaful/Takaful%20Muhammad%20Ayub.pdf Read the Full Document]
 +
 
 +
 
 +
[[Category:Islamic Finance]]
 +
 
 +
[[Category: Takaful]]

Latest revision as of 04:56, 10 November 2017


Top 20 FREQUENT WORDS

takaful 41 business 15 insurance 13 islamic 11 companies 8 mudarabah 7 pakistan 7 countries 6 losses 6 participants 6 policyholders 6 based 5 contract 5 funds 5 investment 5 loss 5 model 5 shariah 5 banking 4 basis 4 concept 4 contributions 4 conventional 4 expenses 4 fee 4 financial 4 models 4 principle 4 profit 4 wakalah 4


DOCUMENT KEY POINTS

  • the contemporary jurists acknowledge that the foundation of shared responsibility or takaful was laid down in the system of a aaqilah which was an arrangement of mutual help or indemnification customary in some tribes at the time of the holy prophet pbuh
  • notwithstanding the belief of all muslims in qadha o qadr islam provides that one must find ways and means to avoid such catastrophes and disasters wherever possible and to minimize his or his family s financial losses should such events occur
  • the legal framework in other islamic countries normally does not allow this arrangement and takaful companies work as separate entities on the basis of mudarabah as in malaysia and on the basis of wakalah as in the middle east region
  • how much of the contribution is meant for mortality liability and how much for investment account is based on a sound technical basis of mortality tables and other actuarial requirements
  • as reported in the press pak kuwait investment corporation has recently been allowed by the sec to establish a takaful company in pakistan under the name of first takaful insurance company limited with authorized capital of rs million
  • takaful products are available to meet the needs of all sectors of the economy both at individual as well as corporate levels to cater for short and long term financial needs of various groups of the society


Please note, This is an auto generated summary based on sentances position in the document and other factors

DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\takaful


KeyWords

taka islam insur malaysia productdeferred shariah countries muslim financial retakaful model growth custom partner developed service mutual bankable provided scheme


RELATED DOCUMENTS

A Review of Takaful by Prof. Khawaja Ahmed Saeed
Agency Management,Training and Incentive Programme
Audit Issue of Islamic Banking
Banca Takaful by Faisal Shahzad Abbassi
Best Practices from e- Insurance to e-Takaful by Sami Guello
Calculated Risks, Measurable Results
Challenges & Issues Faced by Takaful Industry by Mr. Imtiaz
Co-Operative Insurance and Takaful
Current Achievements of Takaful by Dr. S. J Malaikah
International Cooperative & Mutual Insurance Federation
Islamic Banking And Finance Malaysia’s Experience And Achiev
Islamic Finance & Investment Symposium by Sohail Jaffar
Islamic Insurance in 21st Century by Ahmad Feizal
Islamic Insurance Opertunities and Challenges
Issues and Challenges in Retakaful by Azman Ismail
Leveraging BancaTakaful as a Key Growth Channel by Mr. Rohai
Life Family Takaful by Mr. P Ahmed
Micro Insurance Co-Operative and Takaful
Micro Takaful by Shabir Patal
Microinsurance and Takaful
Microinsurance, cooperatives and Takaful
MicroTakaful – the way forward by Capt. M. Jamil Akhtar
Opertunities in Islamic Insurance
Present Scenario and Future Potentials of Takaful by Kazi Md
ReTakaful by Rohail Ali Khan
Syariah Compliant General Takaful Products by Sami Guellouz
Takaful and Mutuality by Mohd. Masua Billah
Takaful by Abdul Rahim
Takaful for Microfinance
Takaful Opperunities and Challenges By Azeem Pirani
Takaful Products Family Takaful Linked Investment Plans by S
Takaful World Prospective Middle East & North Africa
Takaful
Takful - Zubair Mughal
Takful Report
The Islamic Vision Presentation
The Success of Retakaful by Farid Benbouzid


DOCUMENT REFERENCES

Number of Pages

3


Published Date

2003-12-10 13:22:03


Full Document

Read the Full Document