takaful in pakistan
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Takaful In Pakistan. Prepared by: Mohammad yasir iqbal Khan khaqan ahmed khan. Acknowldegement. Mr. Muhammad Farid Habib, Head of Underwriting and Claims “Takaful Pakistan Limited” Mr. M. Iftekhar Ahmed, Chief Operating Officer “Pak Kuwait Takaful Company Limited”. Insurance vs Takaful. - PowerPoint PPT PresentationTRANSCRIPT
PREPARED BY:MOHAMMAD YASIR IQBAL
KHAN KHAQAN AHMED KHAN
Takaful In Pakistan
Acknowldegement
Mr. Muhammad Farid Habib, Head of Underwriting and Claims “Takaful Pakistan Limited”
Mr. M. Iftekhar Ahmed, Chief Operating Officer “Pak Kuwait Takaful Company Limited”
Insurance vs Takaful
Insurance is not an unislamic concept Few elements make conventional insurance haram
Interest Gambling Uncertainty
Takaful emphasizes social harmony, collaboration and mutual coverage of people’s losses Tabarru Loss sharing
Takaful in Quran or Hadith
References available on risk management and mutuality in Quran
Takaful works on the secondary source of Islamic law called Ijtihad
System of ‘Aaqilah’ was a system of mutual help during times of Holy Prophet (p.b.u.h.)
‘Aaqilah’ also worked in the case of blood money Parts of Takaful contract
Protection Savings
Misconceptions
Takaful does not allow risk protection Narrated by Anas bin Malik when an Arab Bedouin asked Prophet
Muhmmad (PBUH), "Shall I leave my camel untied and seek Allah's protection on it, or should I tie it?" The Holy Prophet replied, "Tie your camel and then depend upon Allah (swt)." {as quoted by Sunan Al Tarmizi, 1981,}
Islam prohibits all sorts of insurance or Takaful because it involves elements of gambling Pure risk Speculative risk
Takaful Overtime
Starting from the days of first constitution of Madina, Takaful has evolved till current days
First model was framed in 1970s First Takaful company was launched in Sudan in 1979 There are now 105+ Takaful companies in over 30 countries
Takaful Models & Surplus Distribution
Mudarabah Wakalah Waqf
The Model being allowed to practice in Pakistan Operates under two roles
Operator/Manager Mudarib
Three ways of surplus distribution: Portion kept as reserve to mitigate future losses Portion distributed among the participants Portion utilized for charity
Pakistan Takaful
Incorporated in June 2006 Expertise with overseas ReTakaful operators Specialized risks and umbrella covers specifically for Islamic
banking operations Rating ‘A-’ by JCR-VIS ShariahBoard
Prof. Dr. Anis Ahmed – Chairman Mufti Mohammad Mohibul Haq – Member and nominee of Justice (R)
Muhammad Taqi Usmani Mufti Khalil Ahmed Aazami – Member
Launched BANCATAKAFUL in collaboration with banks Facilitation Desk, Islamic Financial Supermarket, Discounted Contribution,
Fast Turnaround Time, Attraction for Depositors, One-Stop for Clients, Synergy, Value Added Services
Pakistan Takaful
Agent Training Courses Workshops
Products (Consumer) Motor
Private Car Comprehensive Motorcycle Comprehensive Motorcycle third Party
Fire Takaful Householder’s Comprehensive Takaful
Marine Takaful Marine Cargo Policy
Burglary and Personal Accidents Takaful
Pakistan Takaful
Products (Corporate) Property Takaful
Fire and Allied Perils Shopowners Fire Consequential loss All sides of engineering
Motor accident Private Car Comprehensive Private car third party Commercial vehicle comprehensive Commercial vehicle third party Motorcycle comprehensive Motorcycle third party Marine Takaful Health Takaful
MicroTakaful
Waqf Model used by Pakistan Takaful
Pakistan Takaful
Advertising and Human Resource Does not have sufficient cash flows to advertise Pyramid at Defence Karachi Good human resource They have pioneers of takaful in their team
Pak Kuwait Takaful
It was incorporated Joint venture partnership between Pakistan, Kuwait, Malaysia, Saudia Arabia and Sri Lanka
Ratakaful arrangements are firmly in place Aim at adopting a proactive appoach to fill gaps in the market JCR-VIS assigned credit rating A- to Pak Kuwait Takaful It was incorporated before September 2005 but was advised
by SECP not to start operations until Takaful rules had been incorporated
Pak Kuwait Takaful
Investments Mainly in Sukok Bonds IGI investment bank signed a BANCATAKAFUL with
PKTCL Agent Training
Invests heavliy in training employees Shariah Board organizes Shariah courses for its agents
Waqf Model used by Pak Kuwait Takaful
Pak Kuwait Takaful
SECP has imposed a requirement of Rs 250mn paid up capital
This requirement was initially Rs 80mn Management at Pak Kuwait Takaful aims at increasing its
capital basesince it facilitates the business Does not offer products in rural areas Deals only on the Corporate side and ignores Consumer side
Products offered by Pak Kuwait Takaful
Fire Takaful Fire and Allied Peril Policy Householder’s Comprehensive Policy Shop Owner’s Policy
Marine takaful Motor Takaful
Tractor Takaful Engineering Takaful
Contractor’s All Risk Policy Contractors plant and machinery Policy Erection All risks Policy Machinery Breakdown Policy Electronic Equipments Policy Boiler and Pressure Vessel Policy
Products offered by Pak Kuwait Takaful
Miscellaneous Takaful Accidental takaful Policy Hajj & Umrah takaful Policy Money Takaful Policy Fidelity Guarantee Takaful Policy Third Party Liability Takaful Policy Workmen’s Compensation Takaful Policy Product Liability takaful Policy Plate Glass takaful Policy All Risks (Contents) Takaful Policy
Business at Pak Kuwait Takaful
Policyholders can be shareholder PKTCL extends its cooperation to islamic businesses but
many islamic banks still opt for conventional insurance Not heavily effected by Global Financial Crisis Intense competition since there are only three operators The share of Takaful companies is very limited Takaful operators have total 3% market share
66% share is with Pak Kuwait Takaful Most profitable products are Fire Takaful and Marine Takaful Car Ijarah is going under stress
Challenges & Competitive Edge for Pak Kuwait Takaful
Challenges No support provided by the government Conventional insurance companies are a big threat Economic downturn Efforts are made to have a represantative body
Competitive Edge for Pak Kuwait Takaful Have built good relations with customers overtime Human Reasource