Presentation on theme: "Introduction to Takaful &"— Presentation transcript:
1 Introduction to Takaful & MicroTakafulPartnering with peopleCapt. M. Jamil Akhtar KhanACII, MCIT, Master MarinerChief Executive OfficerTAKAFUL PAKISTAN LIMITED
2 Contents Introduction Benefits of MicroTakaful The Takaful advantage Global LandscapeTakaful ProductsProspects in PakistanInitiatives by Takaful Pakistan
3 IntroductionThe 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 FeeInvestmentIncomeMudarib’s Share of PTF’s Investment IncomeManagement Expense ofthe CompanyProfit/LossTakaful OperatorInvestment bythe CompanyWAQFOperational Cost of Takaful / ReTakafulInvestmentIncomeClaims &ReservesSurplus (Balance)ParticipantP 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 LandscapeOnly 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.
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 CoverFactory workers’ & Daily wagersCrop & Livestock TakafulCredit coverage for Islamic Microfinance.Covers tailored for SMEs financing.All above at ‘no profit basis’
16 Conclusion Takaful defined Benefits & Advantage International scenario Takaful ProductsProspects in PakistanTakaful Pakistan’s Initiatives