Capt. M. Jamil Akhtar Khan ACII, MCIT, Master Mariner Chief Executive Officer TAKAFUL PAKISTAN LIMITED Partnering with people Introduction to Takaful & MicroTakaful
Contents Introduction Benefits of MicroTakaful The Takaful advantage Global Landscape Takaful Products Prospects in Pakistan Initiatives by Takaful Pakistan
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!
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”.
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.
The Takaful Advantage Investment Income Operational Cost of Takaful / ReTakaful Claims & ReservesSurplus (Balance) 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.) Mudarib’s Share of PTF’s Investment Income Wakalah Fee Investmen t Income Management Expense of the Company Profit/Loss S H A R E H O L D E R S’ F U N D (S.H.F.) Participant WAQF Takaful Operator Share Holder Investment by the Company
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
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.
International Product Offerings
Delta Life Insurance Company, Bangladesh
Vimo SEWA, India
People’s Insurance Company, China
MicroTakaful Products Crop & Livestock TakafulIntegrated Takaful PackagesHealth/Hospitalization TakafulAnnuities/EndowmentProperty TakafulPersonal AccidentLife Takaful Most Complex Least Complex
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.
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’
Conclusion Takaful defined Benefits & Advantage International scenario Takaful Products Prospects in Pakistan Takaful Pakistan’s Initiatives