Difference between revisions of "Takaful Opperunities and Challenges By Azeem Pirani"

From HodHood
Jump to: navigation, search
(Imported from text file)
 
(Blanked the page)
Line 1: Line 1:
−
                                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
 
−
Takaful & Insurance
 
−
      What is Insurance?
 
−
            A tool for Risk Mitigation and Financial
 
−
            Protection
 
−
            A tool to enable people to save (Life Insurance)
 
−
      Key differences between Takaful and Insurance are:
 
−
            Risk Sharing Vs. Risk Transfer
 
−
            Wakeel Vs. Guarantor
 
−
            Ameen Vs. Owner
 
−
            Different type of Contract
 
−
11th August 2007                                              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 –
 
−
An Overview (cont)
 
−
      Pakistan – Insurance Market
 
−
            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 –
 
−
Challenges for Takaful
 
−
      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 –
 
−
Challenges for Takaful (cont.)
 
−
      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 –
 
−
Challenges for Takaful (cont.)
 
−
      Operational Issues
 
−
            Limited avenues for revenue at Takaful co. as
 
−
            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 –
 
−
Opportunities for Takaful (cont.)
 
−
    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
 
−
    Takaful is not only here to stay; it’s going to GROW!
 
−
    It’s ethical and Shariah compliant nature allows
 
−
    Takaful to overcome the inherent problems with
 
−
    Insurance
 
−
    The Pakistani market has challenges but also has a
 
−
    lot of opportunities
 
−
    There are a lot of opportunities for Takaful operators
 
−
    to make healthy profits in Pakistan
 
−
    Although Insurance coverage is not the norm in
 
−
    Pakistan we need to work to make Takaful
 
−
    something everybody uses
 
−
11th August 2007                                            16
 
−
 
−
Conclusion (cont.)
 
−
11th August 2007  17
 
−
 
−
Jazak-Allah khair
 
−
For further information contact:
 
−
      (021) 438-0357 to 61
 
−
      info@pakqatar.com.pk
 
−
      www.pakqatar.com.pk  (launching soon!)
 
−
11th August 2007                            18
 

Revision as of 00:41, 21 September 2016