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Introduction to Takaful &

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1 Introduction to Takaful &
MicroTakaful Partnering with people Capt. M. Jamil Akhtar Khan ACII, MCIT, Master Mariner Chief Executive Officer TAKAFUL PAKISTAN LIMITED

2 Contents Introduction Benefits of MicroTakaful The Takaful advantage
Global Landscape Takaful Products Prospects in Pakistan Initiatives by Takaful Pakistan

3 Introduction The word ‘Takaful’ has been derived from the Arabic root word ‘ Kafala’ meaning ‘mutual guarantee’. It is risk-sharing instead of risk-transfer. Takaful is a practical manifestation of the Quranic injunction for mutual co-operation and assistance for the common good/benefit. It encompasses the predominant elements of social good, brotherhood and solidarity – founded on the core Shariah principles. By doing so, one gets benefited – from cradle to grave and even in the Hereafter!

4 Introduction Micro-insurance defined:
“Risk-pooling products that are designed to be appropriate for the low-income market in relation to cost, terms, coverage, and delivery mechanisms”. MicroTakaful refined: “A mechanism to provide Shariah-based protection to the blue collared, under-privileged individuals at an affordable cost”.

5 Benefits of MicroTakaful
Helps people sustain their financial well being. Creates feeling of togetherness & security. Opens avenues for joint efforts for mutual benefits. Cooperative approach and outlook. Result s in migration of benefits at individual level. Ensures that Society benefits at large.

6 The Takaful Advantage WAQF S H A R E H O L D E R S’ F U N D (S.H.F.)
Wakalah Fee Investment Income Mudarib’s Share of PTF’s Investment Income Management Expense of the Company Profit/Loss Takaful Operator Investment by the Company WAQF Operational Cost of Takaful / ReTakaful Investment Income Claims & Reserves Surplus (Balance) Participant P A R T I C I P A N T S’ T A K A F U L F U N D (P.T.F.)

7 The Takaful Advantage “ … they seemed satisfied with the convenience and affordability of the policy, but some thought that the premium should be reimbursed if they do not file a claim”. Excerpt from The Demand for Micro insurance in Pakistan by ELIZABETH MCGUINNESS AND VOLODYMYR TOUNYTSKY MARCH 2006

8 Global Landscape Only eighty million out of the world's 2.5 billion poor are currently covered by some form of micro insurance. Only 3% of poor lives are insured in India and China. Only 0.3% of the poor are insured in Africa. In 23 of the poorest 100 countries in the world, there is currently no identified micro insurance activity.

9 International Product Offerings

10 Delta Life Insurance Company, Bangladesh

11 Vimo SEWA, India

12 People’s Insurance Company, China

13 MicroTakaful Products
Crop & Livestock Takaful Integrated Takaful Packages Health/Hospitalization Takaful Annuities/Endowment Property Takaful Personal Accident Life Takaful Most Complex Least Complex

14 Takaful prospects in Pakistan
97% Muslim population. Demand for insurance increasing with increase in per capita income. Personal lines insurance business (leasing, health, medicare) growing at a higher rate than the other conventional classes. Islamic banking on sound footing with support of the government. MicroTakaful.

15 Takaful Pakistan’s Initiatives
Coverage to over 100,000 low-cost houses. Synergy with NGOs. Students’ Healthcare/Campus Care Cover Factory workers’ & Daily wagers Crop & Livestock Takaful Credit coverage for Islamic Microfinance. Covers tailored for SMEs financing. All above at ‘no profit basis’

16 Conclusion Takaful defined Benefits & Advantage International scenario
Takaful Products Prospects in Pakistan Takaful Pakistan’s Initiatives

17 Thankyou

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