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Introduction to
Takaful
&
MicroTakaful
Partnering with people
Capt. M. Jamil Akhtar Khan
ACII, MCIT, Master Mariner
Chief Executive Officer
Email: [email protected]
TAKAFUL PAKISTAN LIMITED
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
SHARE
H O L D E R S’
Share
Holder
Wakalah
Fee
Investmen
t
Income
F U N D (S.H.F.)
Mudarib’s
Share of PTF’s
Investment
Income
Management
Expense of
the
Company
Profit/Loss
Takaful
Operator
Investment by
the Company
WAQF
Participant
Operational
Cost of Takaful
/ ReTakaful
Investment
Income
Claims &
Reserves
Surplus
(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.)
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
Most Complex
Crop & Livestock Takaful
Integrated Takaful Packages
Health/Hospitalization Takaful
Annuities/Endowment
Property Takaful
Personal Accident
Life Takaful
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
Thankyou
[email protected]