issues in takaful by pervaiz ahmed

7/29/2019 Issues in Takaful by Pervaiz Ahmed

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Issues in TakafulSECP Takaful Conference

Pervaiz Ahmed CEO Pak-Qatar Family TakafulMar. 14th, 2007 Sheraton, Karachi.


2/13

Takaful A

product

and

an

ideology

HumanResourceAwarenessMarketing/Distribution

Operationsand

Underwriting

ClaimsInvestments

Conclusion

Agenda


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Takaful- A product and an Ideology

Takaful

is

not

only

a

tool

to

mitigate

loss

or

to

make

halalprofits.Itisanideologywhichpromotes

Solidarityandjointguarantee

Selfrelianceandselfsustainabilityforcommunity

wellbeing

Assistancetothosethatneedit

Communitypoolingsystem


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Takaful- A product and an IdeologyTounderstandtheoperationalissues,itiscriticalto

understand

the

basic

difference

between

conventionalinsuranceandTakaful

RiskSharingVs.RiskTransfer

WakeelVs.Guarantor

AmeenVs.

Owner

TheconceptofWaqfbringsthefundamentalchangeinthenatureofinsurancebusinessandthecontractualrelationshipbetweeninsuredandthe

insurer.


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UnavailabilityoftrainedandcommittedHR

ANationwide

issue

Financialsector,especiallyIslamicinstitutions,arefacingthisissuewithgreaterseverity

Insurancehasnotbeenthecareeroffirstchoice.

Takafulcould

attract

insurance

practitioners

who

considerconventionalinsuranceasUnIslamic.Thesearesizableinnumber.

TraininganddevelopmentLack

of

training

culture

in

the

industry

Lackofqualitytrainingresources

HR Issues


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AwarenessTakafulisanewconceptsbothforthegeneralpublic

and

the

UlemaAwarenessamongstGeneralPublicLowliteracyrateMisconceptionsabouttraditionalinsurance

Lowinsurance

penetration

AwarenessinUlemaThereisaneedtopublicize/publishthe

proceedingsofIjma whichtookplaceinDarul

UloomKarachi

to

declare

Takaful

as

ashariah

compliantriskmitigatingtool.


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Marketing/Distribution

Bestpracticesisanissueforconventionalinsurersas

well.Relyingonexistingsalesforcecouldcausedamageto

theconcept.

Takafuloperatorsshouldfollowbestpracticeswithgreater

rigor

and

commitment.

DevelopingadistributionchannelwhichcouldconveytheessenceofTakafulandexploitthemarket

opportunitiesis

an

uphill

task.


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Marketing/DistributionTakafulshouldnotonlybemarketedtopeoplewho

do

not

buy

conventional

insurance

for

religious

reasonsorbuyincaseofdireneeds.Itshouldbepromotedasthetooloffirstchoiceforriskmitigating.

Alternate

distribution

channels

should

be

utilized

e.g.Bankatakaful.

ThroughTakaful,overallinsurancepenetrationcouldbeincreasedinthecountryandahuge

untapped

market

could

be

tappedPositiveresponsefromthemarket.Peoplearekeentoknow.


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Initial set-up and underwritingInitialsetup unavailabilityof

Shariahcompliant,

efficient

and

cost

effective

businesssystem

Timetestedprocesses.

UnderwritingandPricing

Takafuloperator

should

be

prudent

and

equitable

Wakalafeeandotheradmincharges

Fulldisclosure

Nohidden

charges


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Claims settlement

Claimsshould

be

settled

with

Speed

and

accuracy

Issueofexgratiaclaims

Legalissuesincaseofnonpaymentofclaims


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Investments

Limitedinvestment

opportunities

Uncertaintyregardingapplicationoflimitsoninvestmentsimposedbyregulators.

ItissuggestedtoissueseparateinvestmentguidelinesforTakafulcompanies.


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ConclusionTherearechallengesbuttheopportunitiesarefarmorethanthechallenges.TodojusticetotheTakafulconceptahigherlevelofcommitmentanddedicationisrequiredfromallstakeholders.

Takafuloperators

should

not

exist

to

make

profit.

Rathertheyshouldmakeprofittoexistandtheyshouldexistforthegreaterpurposewhichwouldbethewellbeingoffellowhumanswhentheyarein

need.


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Jazak-Allah khair

[email protected]

www.pakqatar.com.pk (launching soon!)

issues in takaful by pervaiz ahmed

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